Jwaneng ‒ one of the many De Beers mines in Africa

London, England --- MININGREVIEW.COM --- 08 March 2010 - De Beers Group ‒ the largest diamond mining company in the world – increased some of its rough diamond prices during the latest sight held in mid-February, but the group is still holding back on sales volumes.

Reporting this development, Miningmx quoted RBC Capital Markets analyst Des Kilalea, who estimated the size of the February sight at about US$530 million (R3.9 billion). This brings the total for the year to date to US$1.1 billion (R8.25 billion).

De Beers markets diamonds to the trade at 10 sights held in London during the course of the year. The next one will be held later this month.  

Kilalea pointed out while the US$1.1 billion (R8.25 billion) total was much higher than for the comparable period of 2009, it was still the second-lowest two-sight total on record since 1999

“With stronger demand and improving liquidity in cutting centres, De Beers appeared to have increased some of its prices,” he added.

“The litmus test for the rough market will come in the next two to three sights, with Russian producer Alrosa claiming sales in January and February totalling around US$700 million (R5.25 billion), and indicating that it would maintain a higher rate of sales than in 2009.

“At this stage we would expect De Beers to sell a similar amount at the next sight, with a first-half total in the region of US$2.25 billion (R16.8 billion) and an annual total of about US$4 billion (R30 billion).”

Overall, Kilalea said the strength in the diamond market was continuing, although at a more muted pace than in the second half of 2009. “We expect rough price increases to be tempered somewhat in the near term, though with De Beers and Alrosa showing restraint we do not anticipate any major weakness to develop,” he added.