In absolute terms, Argyle pushed up its sales in the first half of 1998 to $229 million from 194.9 million in the same period of the earlier year. Incidentally, this surpassed its own earlier record $220.6 million established in the first half of 1996 when it was marketing nearly 78 per cent of its production through the single marketing channel of De Beers' Central Selling Organisation.

When Argyle took the momentous decision to market its rough diamonds independently of the CSO's selling system from July 1996, some critics had observed that this experiment might not survive beyond end-1997. But Argyle has proved these pessimists wrong by not onlymaintaining its production, but by lifting up its sales beyond the level of first half of 1996 when it was still in the single channel marketing system.

The success in sales particularly in the half of 1998, is attributed to a strong shift towards demand for lower value added products over the past six to nine months. Also while the Asian markets have been weak, there has been a continuously strong demand in the USA which is the key market for small inexpensive stones from Argyle. Furthermore, Argyle had the benefit of "trading down" evident in the traditionally higher value markets of Japan and parts of South East Asia. Argyle also benefited from the reduced supplies from CSO and Russia.

Enthused by the growing demand for its diamonds, Argyle has stepped up its production in the first half of 1998-99 to 19.3 million carats from 16.4 million carats in the same period a year ago. It expects full year production of about 39 million carats in 1998.

After announcing its decision recently on the first stageexpansion of AK 1 pit, Argyle is now studying the second stage expansion. Meanwhile, the potential of underground development has been kept in abeyance as an option to be considered after the full potential of the open pit is realised.

While Argyle represents the largest diamond mine in the world, India is the largest manufacturer in the world using mostly Argyle stones.

It may be recalled that when Argyle Diamonds first started marketing its roughs in the last decade, several countries and agencies had tried to dub these as junk, unsuitable for the jewellery industry, apart from being too hard to work upon. However, the hard-working Indian cutter achieved remarkable breakthrough in cutting and polishing these hard stones. Since then, India has been absorbing most of the output of Australian roughs. Realising this, Argyle has been carefully nursing the Indian market. Besides, it has been actively organising periodical exposure of the Indian jewellery, studded with such diamonds, to the US market which isthe world's largest consuming centre in the world. This has been greatly beneficial to both the sides.