By Eric Onstad
"We are in an environment where the rough diamond market is strong," Managing Director Gareth Penny told a conference call.
He cautioned, however, that a rebound in the group's natural rough diamond sales -- which fell 3.7 percent to $5.9 billion in 2007 -- could hinge on the U.S. economy and a power crisis in South Africa.
"We put up prices several times through the back end of last year and again earlier this year. This has largely been driven by supply/demand -- there is just a shortage of rough in the market," Penny said.
Rough diamond sales by the group's marketing arm -- the Diamond Trading Company -- dipped largely due to an anti-trust deal with the European Union to phase out distribution of gems from Russian state diamond miner Alrosa.
CANADIAN IMPAIRMENT
The group's contribution to underlying earnings of mining group Anglo American, which holds a 45-percent stake in the group, rose 5.3 percent to $239 million.
It was confident, however, of the long-term future of the mine projects in the Arctic region of the country, which were due to start producing at the end of this year, De Beers said.
"Below this (90 percent) level the impact on production will be significant and could be in excess of 10 percent," De Beers said in a statement.
(Reporting by Eric Onstad; Editing by Anshuman Daga)
