De Beers lifted by China demand

Diamond producer De Beers said today more demand for bigger stones from booming China and India would help offset US sales woes this year.

The world’s largest producer of rough diamonds warned that poor US economic conditions would have an impact on sales during the first half of this year.

But the firm said it expected strong demand from China, India and the Middle East to help sustain prices for “larger and better quality” diamonds.

De Beers revenues dipped 3% during 2007, coming in at $6.8bn (€4.6bn). Underlying earnings grew 14% to $483m (€333m).

The stone producer, which is 45% owned by mining giant Anglo American, said demand for its rough diamonds remained healthy during 2007 but sales had suffered amid price falls at the start of the year.

Diamond jewellery sales were likely to be up 3% overall in 2007, De Beers added, with strong growth in China, India and the Middle Eastern markets offsetting a “disappointing” Christmas season in the US.

De Beers said: “The outlook for 2008 is tempered by a high level of uncertainty over world market conditions. The economic conditions in the US could continue to impact consumer diamond jewellery sales through the first half particularly at the lower end.

“Nevertheless, we expect strong demand from China, India and the Middle East to sustain pricing for larger and better quality diamonds.”

Shares in owner Anglo American were up more than 3%.