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De Beers Production to Stay Below 2008 Levels

Apr 26, 2010 8:10 AM   By Avi Krawitz
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RAPAPORT... De Beers is planning to keep its long-term diamond production well below the peak levels it achieved in 2008, before the global economic downturn set in, the Financial Times (FT) reported.

 

“Do we want to ramp production back up to 48 million carats, given the lack of availability in the future?” De Beers managing director Gareth Penny asked in an interview with FT. "Diamonds are a treasure of nature that should be properly protected because there will be less to sell. The reality is that supply cannot keep up and that will become very accentuated over the next 15 years.”

 

Penny added that the new Asian demand would accelerate the depletion of the world’s existing diamond mines. The article also noted that De Beers production will plateau at around 40 million carats in 2011. The company's output reached 48 million carats in 2008, but fell by 49 percent to 24.6 million in 2009 as a result of the slump in demand that characterized the downturn. This year, production is expected to rise to about 30 million carats. De Beers produced 7 million carats in the first quarter, according to a report released by Anglo American, which owns 45 percent in De Beers.

 

Often accused of holding back supply as a means to control prices, Penny stressed that De Beers is not looking to manipulate anything.

“But there is a natural supply-demand imbalance that is leading to certain realities,” he added.

 
LH

Tags: Avi Krawitz, Anglo American, Avi Krawitz, De Beers, Gareth Penny, Production
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