Rough Diamond Prices “Too Low”

Prices of rough diamonds are to low to cover some diamond producers’ costs, according to RBC Capital Markets. The firm said the London Mines & Money conference concluded with the message, adding that a further drop in prices and demand is expected before any improvement would be seen.

While production cutbacks by De Beers and possibly Rio Tinto - aimed to limit sales - are expected to aid the diamond market, liquidity and cash flow issues are impacting the diamond centers.

The sharp drop in rough diamond demand and prices brought Rockwell to recently announce it will extend a halt in production. Gem Diamonds is reviewing Australian operations as is Petra while BHP Billiton is reviewing a number of exploration projects.