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Business News

Diamonds are Anglo American's best friend as prices jump

Buy your engagement ring now? Diamond prices have gained 2% since the start of the year

Valentine's smoothies: buy your diamond rings for next year now because prices are on the up.

De Beers, the world’s largest diamonds group, says prices are set to rise. According to the company’s index of its own rough diamonds, prices have gained 2 per cent since the start of the year. Underlying profits for the business in 2013 were up more than a third.

The company, 85 per cent-owned by the mining giant Anglo American, predicted the economic improvement would strengthen jewellery sales this year, albeit only slightly as strong demand in the US and China looks set to be partially offset by weakened demand in India, where bank loans are becoming harder to get.

Full-year production of diamonds rose 12 per cent last year to 31.2 million carats from 27.9 million in 2012, highlighting the reason why Anglo upped its stake in the business the previous year.

Less sparkling was the rest of Anglo American, where new chief executive Mark Cutifani was unable to avoid a second year of straight losses. Strikes by its platinum miners in South Africa forced it to write down the value of its mines there by $1.9 billion (£1.1 billion).

Anglo’s 7 per cent fall in underlying profits to $2.7 billion was in stark contrast to its rival Rio Tinto, which earlier this week returned to profit.