Blood Diamond fails to taint retail demand
February 8, 2007
By Antony Sguazzin
Cape Town - Retail demand for diamond jewellery had been "reasonable" and unaffected by the film The Blood Diamond, De Beers managing director Gareth Penny said yesterday.
Increased sales of gems by retail outlets would drain the bloated stockpiles of diamond cutters, Penny said at a press conference on the sidelines of the Mining Indaba.
De Beers, the world's largest diamond company, last year expected The Blood Diamond to hurt the image of the industry because it showed a link between illicit diamond sales and the financing of wars in Africa.
Sales of rough, or uncut, diamonds also have weakened as three US Federal Reserve interest rate increases in 2006 dented demand, creating a surplus of the gems.
Interest rate increases also "had a very serious impact", he added. "The problem has been liquidity."
Penny said De Beers was committed to the Kimberley Process, an agreement between companies, governments and non-governmental organisations to crack down on illicit diamond trade.
Necessary steps were being taken after the World Diamond Council, an industry group, complained about alleged diamond smuggling from Zimbabwe, he said.
By 2009, De Beers would comply with an agreement to move its diamond sorting and valuing operations from London to Gaborone, he said.
Botswana is the world's biggest diamond producer and the source of most diamonds processed by De Beers.
De Beers, based in Johannesburg, is 45 percent owned by Anglo American, 40 percent by the Oppenheimer family and 15 percent by the Botswana government.
Shares of Anglo rose 0.52 percent to R347 on the JSE yesterday, while the general mining sector gained 0.92 percent. - Bloomberg
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