“If you look at the new consumer markets in China and India, there is a huge new demand pool that is coming into place,” MD Varda Shine said, adding “The real question is what will happen in the US because of subprime,” she said late on Monday, referring to the US housing crisis which has ignited fears of a recession that could set off a global economic downturn. The US is the world’s biggest market for diamond jewellery. “It will be a very challenging year in the States.”

De Beers, 45% owned by Anglo American, is the world’s biggest diamond producer, supplying about 40% of the world’s rough diamonds. DTC is De Beers’ London-based distribution and sales arm. Ms Shine said global diamond supplies will remain stable because of a lack of major new discoveries.

She said big polished diamonds would attract higher prices as the growing band of super-wealthy valued the rarity of the stones, rather like works of art. “The very rare diamonds, whether they are blues or pinks or big white stones, are going to continue appreciating,” Ms Shine said, adding “Those that are very rare are like pieces of art. The number of billionaires is growing.”

Shine said the ultra wealthy, whether American, Chinese or Russian, wanted exceptional stones. “Better quality, bigger sizes, all colours either whites or yellows or blues.” DTC, which sold $6.2 billion of rough diamonds in 2006, has recently joined forces with the governments of Botswana and Namibia in joint ventures that will sell about 30% of DTC’s turnover of rough diamonds by 2011.

The company is pursuing a strategy of “beneficiation”, which aims to boost incomes of communities in the countries where diamonds are sourced by training people in cutting, polishing, sales, marketing and other skills.

De Beers’ beneficiation programme in Botswana aims to create 10% of the country’s manufacturing jobs by 2010. The recent Hollywood movie ‘Blood Diamond’, starring Leonardo di Caprio and set in Sierra Leone in 1999, had not had any adverse effect on diamond jewellery sales, she said.

Consumers had learned that the Kimberley Process, an industry-backed international initiative introduced in 2003, had succeeded in halting trade in conflict diamonds, she added. All De Beers’ diamonds are guaranteed conflict-free.

Two-thirds of the world’s diamonds by value have come from Africa. “The movie gave us the opportunity to talk about all the great things that diamonds are doing for Africa,” Ms Shine said.

She denied reports in a section of media that DTC had singled out Indian clients or “Sightholders” when it cut the number of clients world-wide for the contract period until 2011. She said the company had applied rigorous and uniform standards when deciding whom to supply rough diamonds.

DTC had removed some Indian Sightholders from the list because rival Sightholders had been more competitive in applications for boxes of diamonds for the new contract period.

She rejected charges by industry that the cut in the number of Indian Sightholders could cost 150,000 jobs, but said, “Everyone who is losing his supply is going to be upset.” She said the total supply to Indian Sightolders was expected to be similar to the previous contract period. “We are actually going to sell the same or more to India.”