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The value of world rough diamond production was estimated to be $7,204 million in 1995. The following table sets out world rough diamond production by country expressed in carats and by value for 1995.

Country

Production (million carats)

Average $ price/carat

Value ($m)

% world value

Botswana

16.8

95

1,596

22

Russia

10.5

135

1,418

20

South Africa

10.0

110

1,100

15

Australia

37.5

8

300

4

Namibia

1.4

315

441

7

Zaire

15.0

30

450

6

Angola

3.2

230

736

10

South America

4.2

95

399

6

Other Africa

2.8

130

364

5

Illicit

0.4

750

300

4

Miscellaneous

1.0

100

100

1

Total

102.8

70

7,204

100


THE C.S.O.

Approximately 80% of the world's annual production of rough diamonds, with a value of approximately five billion dollars are traded through the Central Selling Organisation (C.S.O.). The C.S.O. purchases diamonds from a consortium of diamond producers to market the stones with the intention of preserving an orderly market for diamonds. The C.S.O. purchases rough diamonds from producers, sorts them according to size, shape, colour and quality, values each stone and sells them to diamond cutters and dealers. The C.S.O. stabilises the price of rough diamonds by taking up those diamonds which are temporarily surplus to the market requirements. The C.S.O. thus accounts for the continuous growth in demand for diamonds which has enabled diamond producers to bring new mines into production. The C.S.O. is a subsidiary of De Beers Consolidated Mines Limited of South Africa.

MAJOR PLAYERS

De Beers controls production at the two richest diamond mines in southern Africa - Jwaneng (Botswana) and Venetia (South Africa). In addition, De Beers controls other key mines including Orapa (Botswana) and Finsch, Premier and Kimberley mines (South Africa). De Beers also produces diamonds in Tanzania and Namibia and purchases significant quantities of diamonds from Angola, Zaire and other African countries. Extensive commercial operations adjacent to the Pagvlei and Blue Diamond permit areas include those of Alexkor Limited, De Beers and the TransHex Group Limited. These operations extract reconcentrated alluvial diamonds from marine terraces, recent river gravels and ancient alluvial deposits.

GEMSTONE QUALITY DIAMONDS

The directors of Petra believe that more than 90% of the diamonds mined in the Northern Cape Province of South Africa, where the Group's mining permits are located, are of gemstone quality.

The jewellery market for diamond gemstones is huge: In 1995, in excess of 65 million pieces of diamond jewellery were bought by consumers spending $52 billion, of which diamond gemstones comprised $12 billion of the value.

The directors are confident that the global outlook for the gemstone diamond market remains extremely positive:

upward trends in world economic growth cycles;
stronger demand for higher quality gemstone diamonds;
strengthening C.S.O. sales;
prices of diamonds rising by an average of 3% in 1996; and
the vested interests of numerous key players in the industry.