De Beers revenue surges 14% on US, China and India sales
September 30, 2005
By Stewart Bailey and Antony Sguazzin
Johannesburg - De Beers, the world's biggest diamond company, said
revenue from the first seven of 10 annual sales surged 14 percent to the
highest in a decade as consumers in the US, India and China bought more
Earnings were $4.77 billion (R30.34 billion) compared with $4.18 billion
last year, Varda Shine, De Beers' sales director, said yesterday. The
eighth sale, known as a sight, would be "very healthy", she added.
Prices in the $8.2 billion market for uncut, unpolished diamonds had
jumped more than a third since 2003 as discoveries failed to keep pace
with demand, according to US consulting company Rapaport Research.
Rising jewellery sales in China, where eight out of 10 grooms buy their
brides diamond rings, are adding to demand in traditional markets such
as the US. De Beers has raised prices twice this year.
Diamond sales rose 8 percent to $3.2 billion in the first half of this
year and would at least match those in the second six months, De Beers
said on July 25.
That target remains intact, even as oil prices, which reached a record
of $70.85 a barrel on August 31 in New York, cut disposable income among
Sales of diamond jewellery at the "lower end of the market", like at
Wal-Mart Stores, the world's largest retailer, might be affected by the
higher fuel prices, Shine said. The high end of the market would be
Gareth Penny, who takes over from De Beers managing director Gary Ralfe
next year, will lead the effort to boost demand for rough diamonds
bought by jewellers by 5 percent each year until 2009.
He would increase production from its mines by as much as 17 percent to
55 million carats by 2010, he said.
The company would focus on exploring for new diamond deposits in Angola,
the Democratic Republic of Congo, Russia and Botswana, Penny said. It
has mines in South Africa, Botswana, Tanzania and Namibia, and is digging a new one in Canada.
Anglo American owns 45 percent of De Beers. The Oppenheimers own 40
percent and the Botswana government 15 percent.
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