In the first six months of 2009 De Beers’ diamond output dipped to mere 1.655 million carats (a 50% drop) bringing down all its major performance indicators (Table 1 and 2).
In the first six months of 2009 the company’s rough sales amounted to $1,429 million. Evidently, within this period De Beers was selling its rough stocks accumulated in the previous period and worth over $1.2 billion. The sharp decline in demand for rough diamonds pushed rough prices down. Diamond content in the ore was reported to be only 0.36 carats per ton.
In the first half of 2009 diamond output was significantly decreased due to the financial crisis (Fig. 1 and Table 3).
As we see, there was a slump in De Beers’ diamond output in the first quarter 2009 compared with the previous quarter – reaching 90%. In 2009, the De Beers Group’s output will drop by about 50%, which will result in losing its leader’s position to ALROSA in physical terms. However, the evident advantage of DTC’s sale system permits De Beers not only to preserve its global leadership in the diamond business, but to monopolize the international market of rough diamonds.
Yuri Danilov, Senior Research Fellow, Department of Rough and Polished Diamonds Complex Economy, Institute for Regional Economics of the North (Federal State Scientific Entity)
