Top world diamond producer De Beers posted a 6 per cent fall in 2006 rough diamond sales today due to reduced Russian supply and a sluggish market and warned 2007 sales would also be held back by supply constraints.
De Beers, 45 per cent owned by mining group Anglo American, said rough diamond sales in 2006 slid to $6.15 billion from $6.54 billion the year before.
Sales this year by marketing arm Diamond Trading Company (DTC) will be hit mainly by an anti-monopoly deal with European regulators to phase out its distribution of Russian diamonds.
"While DTC sales are likely to be constrained by availability in 2007 due to the reduction in Russian purchases as agreed with the EU, the De Beers Group will benefit from bringing new production on stream towards the end of Q3," a statement said.
Under the EU agreement, De Beers' purchases of rough diamonds from Russia's Alrosa will fall from $600 million in 2006 to $500 million in 2007, $400 million in 2008 and to zero in 2009.
De Beers said its contribution to underlying earnings of Anglo American was $227 million, down from $430 million in 2005.