De Beers Says Demand to Exceed Supply on U.S. Rebound

By Ron Derby

Feb. 10 (Bloomberg) -- De Beers, the world’s largest diamond producer, said demand is likely to exceed supply for much of the next decade, helped by a strong rebound in U.S. economic growth.

The U.S. historically “rebounds strongly from recession,” said Executive Director Stephen Lussier in a speech at the Mining Indaba conference in Cape Town today. Increased demand is also expected from Brazil, Russia, India and China, he said.

Prices of diamonds and other commodities have slumped as economies in the U.S., Europe and Japan slipped into recession. The U.S. accounts for about half of world demand.

De Beers revised mining plans in South Africa and announced jobs cuts at its mines there due to the slowdown in the global economy, while BRC DiamondCore Ltd. last month said it would extend a shutdown at its operations in the country because of “depressed” prices.

Gem prices have “virtually halved” since mid-July, and prices of “bigger” stones have been affected “heavily,” Petra Diamonds Ltd. Chief Executive Officer Johan Dippenaar said on Jan. 22.

De Beers is 45 percent owned by Anglo American Plc, 40 percent by the Oppenheimer family and 15 percent by Botswana’s government.

To contact the reporter on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net