Biggest diamond mine in the world, Mirny, Russia, East Siberia.
In what appears to be a blatant attempt at market manipulation, De Beers says it will reduce its production to extend the life of its mines. Taking into account the moderated output diamond prices could rise by at least 5 per cent a year for the next five years, according to Des Kilalea, a diamond analyst at RBC Capital Markets.
In 2008 De Beers produced 48m carats and the company will cut production to 40m in 2011. At the same time, the production of artificial diamonds has been skyrocketing.
In the last two decades the industry has found no new diamond deposit to match the two biggest mines in Africa, owned by De Beers, or the best Russian mines of Alrosa, the other big diamond producer.
Gareth Penny, managing director of De Beers, told the Financial Times: “Do we want to ramp production back up to 48m carats, given the lack of availability in the future?”
De Beers accounts for 40 per cent of global rough diamond sales.
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