Diamond Demand Drives De Beers Back To Profit

27 February 2011 | 02:55 Code : 20494 Geoscience events
Diamonds were firmly back in demand in 2010, with the "extraordinary growth" seen by...

Diamonds were firmly back in demand in 2010, with the "extraordinary growth" seen by De Beers signalling a recovery in fortunes.De Beers recovered 33 million carats of diamonds in 2010After two consecutive years of decline in the diamond market, the world’s largest producer saw pre tax profit soar to more than nine times the level seen in 2009, rising from £58m to £540m in 2010.Strong demand in India and China, and the better than expected retail performance in the US over Christmas, gave a 53% boost to sales and pushed up the price of rough diamonds to pre-recession levels.De Beers, which has mining operations in Botswana, Namibia, South Africa and Canada, recovered 33 million carats over the year.The bulk of this came from its Debswana site in Botswana.Production costs rose 42% to £644m but the company said its cost base was substantially lower than in 2008.De Beers Diamond Jewellers is a joint-venture with the French luxury brand LVMHDe Beers remains cautious about the year ahead.In a directors’ statement it said: "The industry is not back to pre-recessionary levels in terms of production or sales and a high degree of global uncertainty remains.""While the directors remain cautious about the diamond market in 2011, continued positive growth is expected, albeit at a lower rate," it added.The company is 45% owned by the mining giant Anglo American, 40% by the Oppenheimer family and 15% by the government of Botswana.

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