De Beers believes it will soon be operating again in Angola, a move that would ease the shortage of diamonds facing the world's largest producer as the global diamond jewelry market expands quickly.

 

"We are on a good roll in Angola," Gary Ralfe, group managing director said. "We are more confident," he told Britain’s Financial Times.

 

De Beers’ operations in Angola ended in 2001 following the collapse of an agreement with state-owned diamond company Endiama, a large producer of high-quality diamonds. Talks with the government have stalled several times since then.

 

"We do not believe Lev Leviev's presence in Angola is a hindrance to us going back," Ralfe said, referring to the Israeli diamond magnate who is one of De Beers' main competitors. "He would not have anything against us prospecting there."

 

Leviev and Endiama officially opened a rough diamond selling company in Israel earlier this month, setting out their plans for a strategic marketing partnership of Angolan diamonds and an Angolan diamond brand.

 

There was no indication from Ralfe about a date for the miner to resume operations in Angola.

 

Meanwhile, Ralfe said De Beers also plans to resume prospecting in the Kasai region of the Democratic Republic of Congo soon, after closing its offices in 1999 in response to increasing market and consumer concerns over conflict diamonds. The DRC is a member of the Kimberley Process, charged with eliminating trade in conflict diamonds.

 

"Negotiations with the DRC authorities are going well," Ralfe said.

 

In wide-ranging comments, Ralfe also said De Beers will start building the first of three new mines in Canada next year. By the end of the decade, they will produce $500 million worth of rough diamonds annually.

 

"We need more," Ralfe said. "We need to find large supplies of diamonds" to meet the needs of expanding markets such as China and India and continuing strong demand in the U.S., the U.K. and France.

 

De Beers has raised prices of rough diamonds by 14 percent in the past year as production has declined and diamond jewelry sales have grown.

 

"Prices are rising at a steady and sustainable rate. The fundamentals are good to very good and I can see no red flashing lights at all," Ralfe said.

 

He identified synthetic diamonds as the one "important threat" facing De Beers.

 

To counter the threat, De Beers is planning a marketing campaign that will emphasize the natural aspect of diamonds and stress the ‘forever’ mark, visible only under a microscope, as an "icon of confidence" for consumers.

 

The aim is to show consumers they can decide whether they want "nature's greatest treasure, over 1 billion years old, or something manufactured two weeks ago," Ralfe said. "The real threat is synthetic coming to be regarded as a substitute for natural diamonds."