De Beers lowers diamond prices to boost sales

De Beers lowers diamond prices to boost sales

In December, De Beers closed its Snap Lake diamond mine in Canada's Arctic. (Image courtesy of De Beers)

Anglo American’s De Beers is said to have reduced the price of its diamonds in its first sale of the year, in a fresh attempt to counter weakening demand.

Citing three people “familiar with the process,” Bloomberg reports that De Beers cut gem prices by as much as 7% at the Jan. 18 sale.

The company, the largest supplier of rough diamonds by value, has poured millions of dollars into advertising in the US and China, trying to boost jewellery sales as part of a strategy to unclog the manufacturing pipeline and lift demand and prices for rough diamonds.

De Beers lowers diamond prices to boost sales

Rough diamond prices declined last year. (Graphic provided by Moody's Investors Service)

Last month, De Beers said it had pushed down rough prices by 15% during 2015 and cut output by about 12% to try to support prices. The miner also closed two operations in 2015 — Snap Lake in Canada’s Northwest Territories and Damtshaa in Botswana.

Several analysts, including Moody’s, have warned that diamond miners would likely have to cut prices further this year in order to lift demand.