Original article found on bloomberg.com
The biggest diamonds are holding their value as smaller gems slump, according to the miner that unearthed this century’s largest stone.
Prices for Gem Diamonds Ltd.’s stones that are larger than 10 carats have fallen about 3 percent in the first half of this year, Chief Executive Officer Clifford Elphick said by phone on Wednesday. That compares with declines of about 30 percent for smaller gems.
“The big stones seem to be holding up their value,” Elphick said.
The London-based company has mines that produce both large and small diamonds. Prices have slumped in the past 12 months as traders, cutters and polishers suffered from a credit squeeze and weaker-than-expected jewelry demand. De Beers, the biggest producer, has responded by cutting output and allowing its customers to defer pre-agreed purchases.
“This is really going to have a big impact,” Elphick said. “We’ve seen some indications at the bottom end that things are starting to turn.”
Gem Diamonds on Wednesday reported Wednesday first-half profit of $15.4 million that was down 22 percent from a year earlier. Sales declined 21 percent to $118 million.
The company’s Letseng mine is famous for the size and value of its stones, including the 603-carat Lesotho Promise, the largest unearthed this century. Its Ghaghoo mine produces smaller and lower-quality items.