Rough year for diamonds is over as producers look to Asia Telegraph.co.uk
A rough 2009 for the diamond industry is not that surprising. When people are worried about debts, job losses and their plunging investments, luxury goods purchases are not exactly the top of their priority list.
This grim time was reflected in the results of De Beers, the largest diamond producing company in the world. The company mines about 40pc of all diamonds produced globally. Poor sales last year meant that the group has had to go cap in hand to its owners to recapitalise its balance sheet through a $1bn (£650m) rights issue.
De Beers is 45pc owned by Anglo American, 40pc by the Oppenheimer family, with the government of Botswana owning the remaining 15pc. All three are taking up their rights in full.
The company's 2009 results showed a pre-tax loss of $32m compared with pre-tax profits of $279m in 2008. Importantly, sales improved as the year progressed – rising 24pc in the second half of the year when compared with the first half. Full-year sales fell to $3.84bn from $6.89bn and diamond production in 2009 slid 49pc to 24.6m carats.
Historically, the US has been the most important market for gems. About half of global sales were made in the country, but this is where the fallout from the recession has been felt the hardest. However, it is to Asia that diamond producers are now looking to give the industry a much-needed boost.
"Demand remained strong in India and China, with US Christmas trading results likely to show the first year-on-year increase since September 2008," De Beers said in its results statement.
