Gem Diamonds Expects Higher H2 Profit

Gem Diamonds expects a better profit during the second half after posting a 31% fall in the first half pf 2009.

The company also noted that they do not expect a dramatic increase in the diamond prices, therefore the company is not expecting to restart mining at any of its closed mines. The closed mines are under “care and maintenance”. All Gem Diamonds mines were closed in February 2009 except the Letseng  mine in Lesotho and the “pipe mine” in Australia.

According to Bloomberg, the Chief Executive Officer of Gem Diamonds, Clifford Elphick said “There will only be a “clear view” of 2010 after seeing the results for Christmas”. He also noted that it is difficult to predict the US sales during the thanksgiving and christmas holidays. The USA which makes up about 40% of the demand for diamond is badly affected by the economic downturn. The demand for diamonds is expected to grow in China.

Elphick added that there was strong demand for diamond wedding jewelry in  Asia, Middle East and in the United States.

Gem Diamond’s shares was up 2% at 265 pence at 11:00 GMT at the London Stock Exchange.

De Beers restarted mining operations in Namebia. The Russian state owned ZAO Alrosa resumed diamond sales in May as demand for diamonds improved slightly. ZAO Alrosa is expected to sell more than US$ 196 million worth of diamonds this month.

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Reuters

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