Gem Diamonds upbeat on sales, prices in 2013

Thu Jan 31, 2013 3:55am EST

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Jan 31 (Reuters) - Miner Gem Diamonds Ltd forecast higher sales for 2013 and said it has seen an improvement in overall rough diamond prices so far this year.

Gem Diamonds said there were reports of "reasonable" year-end diamond jewellery sales in the United States and lower supply, which contributed to an increase in demand and prices for rough diamonds in the last quarter of 2012.

"Although the factors that caused the volatility in the diamond prices will continue to persist for some time, prices in the first quarter of 2013 are expected to be more stable leading up to the Chinese New Year," the company said in a statement.

Rough diamond prices have been volatile over the past couple of years due to the euro zone crisis, a tougher lending environment, a weak Indian rupee, high diamond stock levels in the manufacturing sector and lower demand from emerging markets.

Gem Diamonds expects sales of between 110,000 and 125,000 carats for 2013 from Letseng, its only producing mine based in Lesotho. It sold 107,617 carats in 2012.

Last year, the company sold its Ellendale mine in Australia, which produced rare yellow diamonds.

Gem Diamonds shares were up 3 percent at 162.75 pence 0835 pence on Thursday on the London Stock Exchange. (Reporting by Brenton Cordeiro in Bangalore; Editing by Roshni Menon)

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