Diamond Demand to Slow in 2012 (AAUKY)

The world’s largest supplier of rough diamonds, De Beers SA, has forecast slower growth for diamonds in 2012, citing the poor global economy. In 2011, diamond prices rose 29% and demand grew by more than 11%.

Mining company Anglo American plc (OTC: AAUKY) expects to complete its $5.1 billion acquisition of another 40% of De Beers by the end of this year. Anglo American already owns 45% of the diamond miner and the government of Botswana owns the remaining 15% stake.

European demand for diamonds is particularly week, with sales now starting to pick up in the US and in southeast Asia. The US takes about half the world’s diamond supply, so weakness in the US economy reduces sales. De Beers plans to continue its focus on retail sales in China, but remains worried about weakness in that country’s economy as well.