Anglo American H1 Diamond Profits Up 23% Due to Rising Prices

Anglo American, 45 percent owner of De Beers, reported record half-year underlying earnings of $3.5 billion for the first six months of 2008. Diamonds contributed to this figure an operating profit of $328 million, up 23 percent, principally due to rising diamond prices.

Diamonds’ operating profit increase was due to “strong demand [that] enabled the DTC to increase prices steadily during the first half of the year,” Anglo said in a release. Sales of rough diamonds (including those through joint ventures) were 10 percent higher over 2007, at $3.3 billion.

Underlying earnings from diamonds totaled $166 million, up from $156 million in the corresponding prior year period.

Anglo explains in its outlook that mass market retail and diamond jewelry sales have been impacted by economic issues in the U.S., while strong growth in China, India, Russia and the Middle East have helped to mitigate the impact of this situation.

“The overall retail market is likely to be challenging. Demand for high-end diamonds will likely remain robust, while the smaller low and medium qualities which are more dependent upon U.S. demand will remain subdued.

“Given the current level of supply availability, DTC distribution policies and current high levels of demand for rough diamonds from its clients, De Beers remains positive for the full year 2008,” the release stated.