De Beers H1 Rough Diamond Sales +10% to $3.3 Billion

De Beers benefited from rising rough diamond prices, resulting in a 10 percent increase in sale to $3.3 billion in the first half of 2008. However, the company was hit by tax increases, which dragged down net income 9.7 percent to $316 million.

Total sales by the company rose to $3.74 billion in the six-month period.

During a press conference Wednesday morning, De Beers CEO Gareth Penny expressed pessimism for sales of lower-quality diamonds in the U.S. in the second half of the year, expecting them to be “flat.”

The economic woes of the U.S. are matched, however by growing wealth in India and China, markets that are becoming main consumer markets likely to compensate for declining U.S. sales this year.

While demand for the goods is growing, especially for bigger diamonds, production declined 4.1 percent to 24.2 million carats. Power shortages in South Africa were cited as the main cause for the lower production.

Annual production is predicted to reach some 50 million carats, short of the 51.1 million carats mined in 2007.