Diamond producer De Beers said full-year sales have dipped in a challenging wholesale market but added consumer demand for diamond jewellery remains strong.
The world's top diamond producer reported 2007 sales of $6.8 billion (£3.4 billion), a three per cent drop compared to last year's sales of $7 billion (£3.6 billion).
De Beers blamed the wholesale market for the decrease, where prices for rough diamonds have weakened.
The Johannesburg-based company said strong consumer sales of diamond jewellery in China, India and the Middle East were offset by a disappointing Christmas season in the US market, as American consumers reined in spending amid a worsening economic environment.
De Beers invested $1.12 billion (£0.5 billion) in expansion capital during the year, principally for construction at the Snap Lake and Victor mines in Canada, the Voorspoed mine and SASA offshore mining vessel in South Africa.
Once in operation, the company believes these will contribute approximately 3.3 million carats and $700 million (£359 billion) to De Beers' annual production capacity.
In a statement De Beers said: "The outlook for 2008 is tempered by a high level of uncertainty over world market conditions.
"The economic conditions in the US could continue to impact consumer diamond jewellery sales through the first half particularly at the lower end.
"Nevertheless, we expect strong demand from China, India and the Middle East to sustain pricing for larger and better quality diamonds."
The company also cited the ongoing energy crisis in South Africa as a concern going forward, as the country has been experiencing electricity shortages and rolling blackouts.
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