De Beers returns to profit in boom year for diamonds

11th February 2011, Comments 0 comments

Diamond mining group De Beers reported a return to profit Friday, saying a boom year in diamonds in 2010 had made it "highly cash generative and profitable."

The world's largest diamond company reported sales of $5.9 billion dollars (4.3 billion euros) in 2010, up from 3.8 billion dollars the year before, and a profit of 638 million dollars, up from a loss of 32 million dollars in 2009.

"2010 was an extraordinary year that saw De Beers rapidly move from stabilisation to strong recovery," the company's directors said in a statement.

"The price of rough diamonds has recovered strongly as confidence returned to most parts of the diamond pipeline."

De Beers credited "extraordinary" growth in China and India and a better-than-expected retail performance in the United States during the holiday season with driving the rebound.

But the London-based company, which is owned 45 percent by Anglo American, 40 percent by the Oppenheimer family and 15 percent by the government of Botswana, warned the diamond trade had not completely bounced back from the global financial crisis.

"The industry is not back to pre-recessionary levels in terms of production or sales and a high degree of global uncertainty remains," it said.

The company said rising demand had driven production, with 33 million carats mined in 2010, up from 24.6 million in 2009.

It predicted another good year in 2011, although not a repeat of last year's boom.

"While the directors remain cautious about the diamond market in 2011, continued positive growth is expected, albeit at a lower rate," it said.

© 2011 AFP

0 Comments To This Article