Few Producing Mines.
Some untapped diamond deposits are too dangerous to develop, adding to a shortage. Disputes over access to the gems have sparked violence in Angola and in the resource-rich Democratic Republic of Congo during the civil war that has killed more than 4 million since 1998.
Diamond investments will enjoy ``above-average'' returns in the next several years, according to Trevor Steel, who manages $600 million in natural-resource assets at Baker Steel Capital Managers in London.
``Prices of diamonds and precious metals generally are more resilient to the short-term effects of an economic slowdown compared with base metals.''
W.H. Ireland's Picton says falling production, led by declines at the biggest producers, including Rio Tinto Group's Argyle mine in Australia, the world's largest, will leave $10 billion of demand unfulfilled. The drop will occur even after Botswana boosted output 17 percent last year. The nation, the world's biggest producer of diamonds, accounts for 25 percent of the gems.
Shares of Gravity Diamonds Ltd., a Melbourne-based company that explores in Congo, have slumped 45 percent in the past year. European Diamonds Plc of London, which explores and mines in Finland and Lesotho, southern Africa, is down 60 percent in the past year.
GRN
gravity diamonds limited
