De Beers to Raise Diamond Prices 5 Percent per Year

Bloomberg Businessweek reported that De Beers plans to raise diamond prices by 5 percent every year. That’s because Anglo American plc (LSE:AAL), which owns 85 percent of De Beers, wants its units to bring a 15-percent return on capital by 2016.

As quoted in the market news:

‘We know the long-term trend, we know demand is going to be bigger than supply,’ Chief Executive Officer Philippe Mellier, 58, said in an interview at Bloomberg’s London office. ‘One of the objectives is more stable prices and to drive volatility out.’

‘We have a plan to get there,’ Mellier said, adding De Beers returned 10 percent on capital last year. ‘My team is very focused. It’s our one objective, the objective.’

Click here to read the full Bloomberg Businessweek report.