Despite cautions of an economic downturn in the U.S. in 2008, De Beers has been able to boost rough diamond prices by 16% on the back of strong demand. De Beers’ marketing unit, The Diamond Trading Company (DTC), has managed this through incremental raises throughout this year.
The latest cumulative figure includes a further hike in August, a July price increase of 5% on top of previous price hikes of 8.5% this year. According to Mahiar Borhanjoo, Executive Director, DTC, Sales and Client Services, so far this year, the DTC has seen strong and continuing consumer demand for most categories of polished diamonds, especially in the larger goods. He said that the marketing unit took a long-term, sustainable view on its pricing, and decisions were influenced first and foremost by demand for polished gems.
Slumping U.S. retail sales have only put a damper on cheaper, mass-marketed items that utilize lower-quality gems. Buoyant growth in China, India, Russia, and the Middle East is helping to even out some of the U.S. impact. De Beers, the controller of around 40% of the rough diamond market, posted a 10% rise in first half rough diamond sales to $3.3 billion.
Dubai’s diamond business is also benefiting from the skyrocketing diamond demand. The Dubai Diamond Exchange (DDE) reported that the total trade in rough diamonds in Dubai grew 36% to $3.03 billion in the first half of 2008, compared to the same period last year. The value of Dubai’s rough diamond imports rose 23% to $1.15 billion, while exports surged 44% to $1.88 billion. Dubai exported $2.82 billion worth of rough diamonds last year, while imports for the same period stood at $2 billion.
While exports in terms of carats grew marginally in the first half of the year, the price of diamonds rose by 10% and helped push the overall trade to high levels. For the first half of the year, Angola, India, Europe, and China were the top diamond trade partners for the Gulf emirate. Together, they accounted for around 85% of total trade volume. Retail diamond jewellery turnover in the GCC is worth about $2 billion a year and is expected to see a significant increase this year, the Dubai Chamber of Commerce and Industry said. The DDE plans to hold rough diamond sales weeks every month, starting from August 24. The DDE is the only exchange in the region to service the diamond trade from mining to retail.
India has banned import of rough diamonds from Venezuela after it pulled out of a UN-approved system that ensures that blood diamonds are not traded and used for financing the rebels’ wars across the world. The import of rough diamond from Venezuela has been prohibited in view of voluntary separation of Venezuela from the Kimberley Process Certification Scheme (KPCS) and to cease certification for export of its diamonds, according to a statement by the Directorate General of Foreign Trade in the Commerce Ministry (DGFT). KPCS was established in 2000 with the backing of the UN. It is an international process designed to certify the origin of rough diamond from sources which are free of conflict. It assures consumers that by purchasing KPCS-certified diamonds they were neither financing rebels’ war nor abetting the human rights abuse.
Venus Resources Limited has joined forces with Seaward Holdings to search for diamond-bearing lamproite pipes north of the Argyle Diamond Mine, over tenement E80/3359. Under the terms of the joint venture, Venus Resources may earn 70% equity in the tenement by completing a bankable feasibility study on any diamond deposit found. Until completion of the bankable feasibility study, Venus Resources will have no interest in the tenement. There is no minimum expenditure commitment (except to keep the tenement in good standing) and Venus Resources may withdraw from the joint venture at any time. Tenement E80/3359 is located 20 kilometers from the Argyle Diamond Mine and covers an area of approximately 21 square kilometers. Work on the tenement over the last 15 years has been non-existent due to Aboriginal land right issues. The solid relationship established between Venus Resources and the traditional family groups has now facilitated access and exploration.
