De Beers’ rough diamond sales through the Diamond Trading Company rose to $3.25 billion during the first six months of 2006, up from $3.2 billion a year earlier. Overall it will add $238 million to the profit of owner Anglo-American.
The results were slightly lower than analysts had expected. They attributed the drop to rising interest rates and oil prices that have hurt demand for diamonds. But most were optimistic about the long-term demand for diamonds.
In a conference call, Managing Director Gareth Penny said that De Beers is unlikely to raise prices of rough diamonds in the second half of 2006. He noted that the “rough market is under pressure. There’s quite a lot of indigestion in the pipeline, which is putting pressure on the trading centers.”
Still, he said that “the polished and the retail market have gone reasonably well in the first half of the year. We think probably something like three to four percent increase and we expect at least that for the year as a whole.”
De Beers is also investing heavily in new production, which is hopes to increase by 10% to 55 million carats over ten years.