The world’s premier miner and marketer of diamonds is confident it can manage the type of threats to price stability that occurred in 1992, should they recur this year.
“Our first three diamond sales this year have been very satisfactory,” Andrew Lamont, head of North American communications for De Beers Centenary AG told The Northern Miner in a wide-ranging interview in Toronto. The company, which controls 80% of world diamond production, will soon report sales figures for the first half of 1993.
Last year, the Central Selling Organization (CSO) — the diamond marketing arm of De Beers — spent about US$750 million purchasing diamonds from one country, Angola, to stabilize a volatile market.
“In a normal year, we purchase diamonds from Angola totaling about US$200 million,” Lamont explained. But last year, individual miners could safely gain access to mining areas because of a United Nations-enforced ceasefire in the 16-year-old civil war there. This resulted in millions of carats’ worth of diamonds being smuggled out of the country and into buying offices. “We bought about two-thirds of the `unofficial’ production from Angola, or about US$550 million, in 1992,” Lamont said.
He said it is uncertain how long De Beers can maintain this level of buying. “De Beers has a strong balance sheet.”
The CSO has survived a world war and a major economic depression and “we accept the responsibilities of maintaining a stable diamond market,” he added. Last year, the company spent US$160 million on advertising, double the amount spent 10 years ago. (Between 1980 and 1990, demand for diamonds doubled.) When asked about recent diamond exploration in Canada, Lamont said he could not recall the same level of enthusiasm for other discoveries as he is seeing in North America. “We are watching developments with great interest.”
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