Could it be that the almighty De Beers feels threatened by the Canadian diamond rush? In an uncharacteristic move last month, the diamond kingpin announced that the market for rough stones looks shaky. According to De Beers, Angolan prospectors are exacerbating the effects of a weak global economy by flooding the open market with alluvial diamonds. The monopoly says the alternative supply is reducing demand for stones from its Central Selling Organization.
Is De Beers simply doing the right thing by warning its shareholders of weaker earnings in the months ahead? Or is there an ulterior motive? An attempt, perhaps, to stamp out the feverish diamond rush in Canada, which, if fruitful, could pose a challenge to the giant’s stranglehold on the diamond market.
“The real issue is how do you market the product,” said BHP Minerals chief executive Jerry Ellis when questioned about the Lac de Gras diamond play by an Australian reporter. “On that, we have an open mind.”
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