Petra Diamonds, owner of the famous Cullinan diamond mine in South Africa, said that diamond prices fell nearly 9% in the last six months.
Its CEO said that prices for rough diamonds have tailed off because banks have tightened lending to the sector.
Many diamond cutters and polishers are small family-owned operations which need bank loans to buy rough diamonds. The loans are repaid when the finished jewels can be sold.
Many of the loans came from specialist banks, but with the expected closure of one of the major lenders, Antwerp Diamond Bank, credit for diamond buyers is likely to evaporate.
Petra said it did not expect that prices would recover in the near future. It lowered its price expectations from the Cullinan mine from $152 a carat to $130.
The diamond miner is investing in huge expansion projects at the Finsch and Koffiefontein mines, as well as Cullinan, to extend production. Both Finsch and Cullinan are mature mining areas.
The Cullinan mine produced the Great Star of Africa, the largest polished white diamond in the world, in 1905. It is now mounted in the head of the Sceptre with the Cross, part of the British crown jewels.
