Out of the production of 12.48 million carats in the third quarter of 1998, nearly 11.87 million carats came from AK 1 pipe while 60500 carats were alluvial diamonds. This takes the AK 1 production for the first three quarters of 1998 to about 30.50 million carats compared with 25.63 million carats in the same period a year earlier.

Total alluvial production for the first nine months of 1998 has been of the order of 1.29 million carats, compared with 1.23 million carats in the same period of the previous year.

The overall increase in Argyle production reflects improved operating efficiency in itsprocess plant. The grades also improved leading to better performance by the mine.

Argyle has also succeeded in building on its record first-half sales with further strong sales results for the third quarter. This has led to consolidation of the price improvements achieved during 1998.

The main reason for strong Argyle sales, is the continuing demand for these stones in the USA and the benefit of "trading down" in the average value of diamonds purchased in other markets.

Ashton Mining (40.1 per cent partner of Argyle), however, feels that notwithstanding the strong sales by Argyle in the first three quarters of 1998, the growing concerns in relation to the world economic conditions, are having some dampening effect on overall demand. The general market conditions are expected to be more difficult in the last quarter of 1998.

The Central Selling Organisation (CSO) sights for the third quarter appear to have been around $1.1 billion. This means that the pattern of reduced sights that began since late1997 has continued so far. This approach has helped industry regain confidence in what has been a relatively difficult period.

Argyle's annual pink diamonds tender was conducted during September 1998. It offered 63 stones weighing 58.2 carats. Tender viewings were held in Sydney, Hong Kong, Tokyo London, Genevas, and for the first time in New York. There were 13 successful bidders.