De Beers, the worlds largest diamond group is to increase stocks of rough diamonds.
The De Beers Managing Director Gareth Penny noted that stocks of rough diamonds were down by 20-30 percent from 2008 peaks. This was disclosed in the first ever Antwerp Town Hall Meeting for diamonds.
The news was welcomed by the Antwerp diamond traders. The managing director also answered numerous questions from the audience. Some of the questions included possible price hikes. However Gareth Penny did not disclose if the prices will be raised at its upcoming Sight (A Sight is a regular purchase of rough diamonds by sightholders).
De Beers slashed production in the first quarter by 90% compared to the last quarte of 2008. However from April De Beers restarted the Debswana mines. The Debswana mines are now working at over 80% capacity. 45% of De Beers is owned by Anglo American PLC.
There is a mis-match between the fall in demand for rough diamonds (60%) and polished diamonds (30%) compared to mid-2008.
According to De Beers, consumer demand has increased in China while in other parts of the world it is down 10-15 %.
Mr Penny also noted that from the Christmas season 2009 will be much better than the Christmas season 2008 as stock markets are up and U.S confidence indices are increasing.
Penny also defended moving sorting operations to Botswana from London “London is expensive and the move makes economic sense”.
Later this month De Beers plans further meetings in Israel .In July De Beers also hopes to have a meeting in Mumbai.
De Beers was first established in 1888.