| |
Diamond industry yet to see commodities bull run - Clyde Rossouw Investec
In an interview on Radio 2000 @ 18:30 on Thursday 19 July 2007
[miningmx.com] -- DIAMOND prices have yet to mirror the strong run up in other commodity prices and whatever gains might come from a supply deficit will be shortlived, said Investec Asset Management's Clyde Rossouw.
"I am not that optimistic about the diamond industry because unlike other commodities, the diamond price has not moved up significantly," Rossouw said on the Moneyweb Power Hour, a week-nightly radio broadcast.
"The South African producers are not really shooting the lights out, and if one looks at the De Beers' financial results for instance, you would see that they are not as positive as other mining companies."
However, Gem Diamonds CEO Clifford Elphick said on the same show demand for diamonds had outstripped supply and there were no producers coming on stream, which had pushed prices up.
Rossouw said the current strong price situation was only
temporary.
Gem Diamonds, which is listed on the London Stock Exchange and has assets in Lesotho, Botswana, Indonesia, Democratic Republic of Congo and Central African Republic, has bid $263m for Perth-based Kimberley Diamonds.
It still has some $200m on its books which could be spent on buying more assets, Elphick said.
"There are other acquisitions in sight but one can't give that information away as yet," said Elphick.
Kimberley owns the Ellendale mine in Western Australia. Gem will fund the transaction out of existing cash resources and hopes to finalise the deal by mid-September.
"So we would be accessing fantastic diamonds while meeting our objectives of broadening our geographical spread," said Elphick. "And we are trying to get hold of producing diamond mines such as this one."
| |
