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Rapaport reports world number two diamond producer De Beers estimates global polished diamond sales rose a mere 4% in 2012.
Philippe Mellier, De Beers chief executive, told an audience of investors on Friday that reasons for the pedestrian pace include slumping demand in India which was hurt by “high inflation and a volatile rupee” while in China the anticipated boost to consumer spending from the government stimulus program “didn’t materialize”:
De Beers forecasted that polished diamond sales in China grew 11 percent in 2012, compared with 25 percent growth recorded in 2011, while sales in India fell 1 percent after growth of 9 percent last year. Sales in the U.S. increased 4 percent during the year, the group estimated.
The company has maintained its mining operations focused on maintenance and waste stripping during the period of market weakness that began in the fourth quarter of 2011. Production fell 20 percent year on year to 19.824 million carats during the first nine months of 2012. Rough diamond sales to sightholders fell 23 percent to $3.98 billion during the same period, according to Rapaport estimates.
Anglo American (LON:AAL) in August completed its acquisition of a 40% stake in the De Beers Group from the Oppenheimer family, which has held a major ownership stake in the diamond mining, distribution and marketing company for more than 80 years.
The $5.1 billion deal, announced in November last year, increased Anglo’s stake in the diamond mining giant from the 45% to 85%, marking the end of Oppenheimer era at De Beers. The government of Botswana owns the remaining 15% of the company.
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