Tuesday 13 December 2016 12:18 pm

De Beers’ diamond demand sparkles in 10th sales cycle despite slowdown as a result of Indian demonetisation programme

Anglo American's diamond-producing arm, De Beers, had a sparkling performance in its latest sales cycle as year-on-year growth outshone a slowdown from India's withdrawal of high-value bank notes.

In the 10th rough diamond sales cycle of 2016, De Beers provisionally raked in $418m (£331m), 41 per cent more than the $248m it brought in during the same cycle in last year, when commodity prices were tracking lower.

However, this fell from the ninth cycle of this year, when actual sales reached $476m. There are 10 diamond "sales cycles" each year, taking place roughly every five weeks.

The group has been hit by a slowdown in sales from India, a significant market for the group, following Prime Minister Narendra Modi's snap decision last month to withdraw 500 rupee and 1,000 rupee notes from circulation, in a bid to tackle corruption, tax evasion and black market trade.

Bruce Cleaver, De Beers chief executive, said:

We continued to see good demand for De Beers rough diamonds in our latest sales cycle.

While the trade in lower value rough diamonds is experiencing a temporary slowdown as a result of the demonetisation programme in India, demand across the rest of the product mix continued to be healthy and overall sales remained in line with seasonal expectations.

Pleasingly, sales were also significantly higher than those for the equivalent cycle in 2015.

Production at De Beers increased by four per cent to 6.3m carats in the quarter ending 30 September, up from 6m carats in the same period of last year due to "improved market conditions".

Anglo is angling to streamline its business, focusing on diamonds, platinum and copper, which will mean offloading non-core assets in thermal coal and iron ore.

Last week, consulting group GlobalData forecast global rough diamond to reach a pinnacle in three years before entering into a supply deficit by 2020.