Monday, August 17, 2009

Are diamonds still a girl's best friend? Gem's premier miner De Beers sees its profits slump 99%





De Beers is the premier name in diamond mining and celeb favourite
Diamonds have lost their sparkle. De Beers, the world's top miner of the gems, today said its half-year profits plunged 99 per cent from £192million to £1.83million.
Diamond sales have tumbled at the fastest pace since at least 1974, said the world’s largest supplier. Sales of untreated diamonds slumped 57 per cent for De Beers, a favourite of celebrities including supermodel Iman, (pictured below), after its major markets in the U.S., Europe and Japan slid into recession.
Although the firm has London jewellery stores in the Royal Exchange, Westfield and Harrods and on old Bond street, it makes most of its money by selling rough diamonds to jewellers and polishers.
Prices for the untreated stones fell by about 50 per cent between October and mid-March, and have since made up only about 30 per cent of their value, according to analysts.
De Beers, which is 45 per cent-owned by mining giant Anglo American, slashed its production levels by 73 per cent to 6.6million carats.
It cut costs by more than half, including axing 23 per cent of its staff and mothballing mines in South Africa and Canada.
Shareholders gave the group a $500million interest-free loan during the period
But the second quarter was much better than the first, and the company said the outlook is sparkling.
De Beers said: 'With no major new diamond discoveries in more than a decade, and with worldwide reserves at an all-time low, diamonds will become more scarce.
'As demand grows in emerging markets, it is likely that sales will outpace forecast diamond supply for many years to come.'

By Daily Mail Reporter
Last updated at 10:50 PM on 24th July 2009


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