De Beers Gets $500 Million Loan
The other day I questioned whether a diamond investment fund was a good idea and now here's more news that suggests you might not want to put your money in diamonds right now. The grandaddy of all diamond companies, De Beers, has announced plans borrow $500 million from Anglo American Plc and other shareholders to bulwark itself against a falling gem market. The loan is a preventative measure in response to the fact that jewelry sales are plunging around the world. Diamond prices have already dropped, some say by as much as 50 percent and exports are down across the globe. De Beers has already cut the amount of rough stones it is offering to clients by half until April and has enacted production slowdowns at several of its mines. It is being predicted that diamond demand might not rise until the end of 2010 and even that may be optimistic.