News

June 16, 2008

African Diamonds Awaits The Outcome Of The Marketing Debate Between De Beers And The Botswana Government

By Charles Wyatt

In Rio Tinto’s recent annual review yesterday Bill Champion, managing director of the diamond division, emphasised the company’s long term commitment to diamonds and said: "Between now and 2016, even under the most optimistic supply scenario, demand will outgrow supply". Coming from whence it does, that is a strong statement and makes no concessions to the recession in North America, which may last longer than has been predicted by politicians and their lackeys. In fact Mr Champion deliberately emphasised that: "We must acknowledge the accelerating diamond jewellery sales in China, India and the Middle East. These emerging markets are set to provide some solid insulation from any volatility in the US".

Support from this view also comes from James Picton, arguably London’s most experienced diamond analyst, who’s now with BMO Capital Markets. He points out that rough diamonds are in increasingly short supply and prices rose by around 20 per cent last year.  He goes on to forecast that rough diamond prices will rise by 40 per cent on average across diamond categories by 2012, and that the increase will then accelerate as three mines, Ekati in Canada, Udachnaya in Russia, and Venetia in...