(Updates with demand outlook in second paragraph.)
June 9 (Bloomberg) -- De Beers, the world’s largest diamond producer, said demand will surpass production for at least the next five years because no new mines are coming on stream.
“For the foreseeable future, five years, it seems to be the demand for diamonds is going to exceed the supply,” Chairman Nicky Oppenheimer said today in a speech at the Council on Foreign Relations in Washington. “That is simply because there are no new mines.”
Demand has recovered since De Beers, which is based in Johannesburg, slashed output in 2009 during the financial crisis. Prices rose 7.7 percent in May as retail sales in emerging markets improved, the Rapaport Group said today, citing its composite RapNet Diamond Index of certified, polished stones.
“We only have the existing mines,” Oppenheimer said. “Their production is level at best.”
“With China and India coming into the market, I think demand is going to exceed supply for the immediate future,” he said. De Beers, producer of about 40 percent of the world’s rough diamonds, posted 2010 net income of $546 million, compared with a year-earlier loss $743 million. The Oppenheimer family owns 40 percent of De Beers, London-based Anglo American Plc. has 45 percent and Botswana holds 15 percent.
“We’re seeing diamonds coming back into favor,” Oppenheimer said.
--Editors: Simon Casey, Steven Frank
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