De Beers annual diamond sales total US$4.17b

Annual sales of rough diamonds by the Central Selling Organization (CSO) of De Beers totalled US$4.17 billion last year, up 2% from US$4.09 billion in 1989, the company reports. The 1990 sales figure confirms earlier CSO forecasts which anticipated a year of consolidation following record sales achieved in 1988 and 1989. The CSO spends about $3 million annually on diamond advertising in Canada — the company’s fifth largest market.

De Beers has a virtual monopoly on the world diamond market which is by far the most strictly controlled of the world’s commodity markets. About 85% of gem and natural industrial diamonds are marketed through De Beers.

Last May, the company formed a new unit called De Beers Centenary, based in Lucerne, Switzerland, to head up its non-South African assets which account for about 80% of its total assets. The Centenary unit includes De Beers’ mining interests in Botswana, Namibia and its international trading activities.

The first tangible offshoot of Centenary’s formation was the signing last July of a US$6-billion diamond purchase agreement with Glavalmazzoloto, the Soviet Union’s department of precious metals and minerals.

The Soviet deal calls for De Beers Centenary to purchase US$62Dbillion worth of diamonds from the USSR over the next five years.

In another recent transaction, De Beers Centenary negotiated a US$100-million deal to extend and improve Angola’s diamond mining industry. A total of US$50 million will be spent to improve alluvial production from Angola’s Cuango area while another US$50 million will go to prospecting and development of new kimberlite pipes in Angola over the next five years.

De Beers plans to spend a total US$60 million globally this year on prospecting for new diamond deposits in Africa, Australia, Canada and South Africa. Canada forms an important part of the company’s global exploration effort. Monopros , De Beers’ Canadian exploration arm, is currently conducting diamond exploration in Saskatchewan and Alberta.