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De Beers to reduce purchase of rough diamonds from Russia

12 Feb '07

2 min read

Due to reduction in purchases of rough diamonds from Russia and a slow-moving market, De Beers, world's top diamond producer saw a six percent fall in 2006. With this the marketing arm of De Beers, Diamond Trading Company (DTC) sales are likely to be constrained by availability in 2007.

Sources revealed the rough diamond sales in 2006 fell to US $6.15 billion ($A7.88 billion) from $6.54 billion ($A8.38 billion) in 2005.

The DTC sales this year will be hit by an anti-monopoly deal with European regulators to phase out its distribution of Russian diamonds.

Under the EU agreement, De Beers' has consented to reduce its purchases of rough diamonds from Russia's Alrosa. In 2006 the company purchased $600 million of rough diamond, in 2007, the purchase will be $500 million, in 2008 it will be $400 million, and to zero in 2009.

De Beers' group production took a leap of 4.1 percent to a record 51 million carats, mainly due to strong output from Botswana the world's top diamond-producing country.

Its joint venture in Botswana has increased production by 7.5 percent to an all-time peak of 34.3 million carats.

The Chinese and Indian market was buoyant showing a strong sales growth and the biggest retail market in the United States increasing in line with broad economic growth.

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