Diamond demand to exceed supplies: BHP

BHP Billiton, the world's largest mining company, said supplies of diamonds won't keep pace with the growth in forecast demand.

Prices will rise in 2007, Alberto Calderon, president, BHP Billiton's diamonds and specialty products unit, said today at a presentation in London. The US is expected to be the dominant market, with growth in China, India and the West Asia, the Melbourne-based company said in the presentation.

BHP has joined De Beers, the largest diamond company, in forecasting a production shortfall because of a lack of deposits that can be mined. Both companies are exploring in African nations such as the Democratic Republic of Congo and Angola to find diamond-bearing rock formations called kimberlites.

Production revenue at BHP's Ekati mine may reach almost $600 million for fiscal 2007, it also said. Output at the Koala pit at Ekati, which is located in Canada's Northwest Territories, is due to start in December.