De Beers reports 15% drop rough sale, overall sales drop 16% to $6.1 billion

Diamond mining giant De Beers posted a 15 percent plunge in rough diamond sales to $5.5 billion in 2012, while the company saw a 16-percent fall in total sales last year to $6.1 billion.

Prices of rough diamond declined by 12 percent in 2012 which in line with polished diamond prices falls, De Beers reported.

The miner's diamond output fell to 27.9 million carats last year from 31.3 million carats in 2011.

"After an exceptional first half of 2011, the macroeconomic uncertainty that triggered difficult trading conditions in the fourth quarter of 2011 continued, as expected, into 2012," the firm commented in a media release.

"Demand for diamond jewellery in the key markets of the US, China and Japan grew, albeit at a slower pace than in 2011. This, together with higher polished stock levels, resulted in a decline in polished prices particularly in the third quarter of 2012.

"Although rough diamond prices remained broadly stable in the first half of 2012, a combination of weaker polished prices, high levels of cutting centre stock and tightening liquidity in the midstream resulted in a rough diamond price correction during the third quarter.

"By the end of 2012 however, rough diamond prices stabilised, reflecting a modest improvement in consumer demand during the holiday sales season in most major diamond jewellery markets," the company added.

The decline in rough diamond sales was mostly a result of weaker demand, however it was also caused by a change in sightholders' requirements and a decline in availability of some types of stones De Beers said.

Rough diamond sales via its auction channel dropped to $356 million from $405 million the previous year.

The ongoing relocation of London-based sales personnel and operations to Botswana is ahead of schedule, with relocation of aggregation, quality assurance and sight preparation activities in 2012. De Beers will finalize the transfer to Gaborone by the end of 2013.