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Gold/Mining/Energy : SOUTHERNERA (t.SUF) -- Ignore unavailable to you. Want to Upgrade?

To: Ron S. who wrote (2495)	2/23/1999 10:12:00 AM
From: Goalie	Respond to of 7235

De Beers Diamond Sales Rising This Year, Analysts Say London, Feb. 22 (Bloomberg) -- De Beers, the world's biggest diamond miner and marketer, sold more diamonds at its first two sales this year than last year as wars cut diamond supplies from Africa and demand rose in the U.S., analysts said. De Beers sold between $700 million to $750 million in diamonds at its first two industry sales this year, up from $550 million last year, according to analysts polled after the conclusion of De Beers' second 1999 sale last week. De Beers does not give details of individual sales, known as ''sights.'' Last year, the diamond industry had its worst year in more than a decade because of a plunge in Asian demand, which traditionally accounts for more than a third of diamond sales. De Beers' sales fell 28 percent last year to their lowest since 1987, and they remain far below historic levels. ''I don't see the turn happening yet,'' said Allan Cooke, an analyst at Rice Rinaldi Securities in Johannesburg. Sales are ''slightly better, but nowhere near 1997. They are close to half what they have been.'' Demand for diamonds in the U.S., the world's biggest market for polished diamonds, was stronger than expected during Christmas, analysts said. Meanwhile, armed conflict in the democratic Republic of Congo, Angola and Sierra Leone, the world's fourth-, fifth- and ninth-biggest producers by value, reduced diamond supplies. ''Demand for rough (diamonds) is up,'' said Robert Craig, an analyst at Merrill Lynch in Durban, South Africa. ''No doubt there has been a drying up of supply from these countries.'' De Beers, through its sales arm the Central Selling Organisation, controls about 70 percent of the world supply of rough diamonds. Reduced supplies from Democratic Republic of Congo, Angola and Sierra Leone would reduce supplies not controlled by De Beers, allowing the CSO to increase its own sales without damping prices. The sales have also been improved by stronger buying of rough diamonds by De Beers on the open market from producers which don't sell through the CSO, said analysts. An agreement between De Beers and Russia's RAO Alrosa, which means that most diamonds from Russia, the world's second biggest producer by value, are sold through the CSO, also helped, said Andrew Lamont, a CSO spokesman in London. Lamont said rough diamond prices were ''reasonably firm,'' though analysts have said prices have been falling in recent months. De Beers has been increasing the quality of diamonds, but not the price, sold from its stockpile, said Ross Gardiner, an analyst at SG Securities in Johannesburg. This equates to a reduction in prices, he said. There is no benchmark diamond price -- as many as 14,000 grades of rough diamonds are sold. De Beers was unchanged at 102.2 rand.