Diamond prices are stabilising and volatility has dropped said Vikram Merchant, manager of Rio Tinto Diamonds, India office. But he added the rider that in the long run it will move upwards, Times of India reported.
"Following collapse of Lehman Brothers in 2008, diamond prices fell sharply. Then again in 2010 it recovered quite a bit. We have seen volatility in diamond prices in recent times. But now it has stabilized and there will be no volatility in the short term," he said. He was here to launch Nazraana collection of diamonds of the company.
Rio Tinto Diamonds is a fully-owned subsidiary of Anglo-Australian mining giant Rio Tinto Ltd. It is a diamond producer with 100% control of the Argyle mine in Australia, 60% of the Diavik mine in Canada and 78% interest in the Murowa mine in Zimbabwe. These three mines allow Rio Tinto to supply a broad range of diamonds for all market segments.
Merchant added: "In the long term prices will rise as the demand for diamond worldwide is increasing and there is less supply as there is no new mine in sight."
Talking about its Nazraana brand through which it will sell affordable diamonds in India, Merchant said the company is planning similar business opportunity in China and the US as well. In India the company will sell its diamond jewelleries through local leading independent jewellery stores. But in the US and China it has tied up with big retail chains through which it will sell its products.
"In the US and Canada there are many big retail chains, but in India we do not have any such huge retail chains. Hence, here the business model is different," Merchant said. He clarified that the company has no plans of retailing.
On the company's project in Bundelkhand in Madhya Pradesh, he said: "We are conducting a feasibility study. It will determine the commercial viability of constructing the mine and at the same time and at the same time we are looking at getting various approvals from the state and central government which is required to proceed with mining lease. So currently the exploration lease has to be converted into mining lease. We have got the in-principle approval of the mines ministry to proceed with requisite approvals."
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