De Beers' production down 90 percent in 1Q

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De Beers' production down 90 percent in 1Q

May 01, 2009

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Increased production at De Beers' mines for the rest of the year, including the recently reopened Jwaneng Mine in Botswana pictured here, is expected to offset the sharp drop in first-quarter 2009 production.

London--Production for diamond-mining giant De Beers declined nearly 91 percent in the first quarter of 2009, as the company slowed production due to a sharp drop in worldwide demand for diamonds.

According to an interim management report released this week by Anglo American plc, the London-based mining company that is the largest shareholder in De Beers, De Beers recovered 1,082 carats in the first quarter of 2009, ended March 31.

That represents a 90.8 percent drop from the first quarter of 2008, when the mining company brought 11,774 carats out of the ground.

"In light of lower market demand, De Beers reduced production at all its mines through a combination of production holidays and reducing shifts worked, allowing sales from existing inventories in order that sales demand was met," the report states.

Earlier, De Beers spokeswoman Lynette Gould told National Jeweler that the De Beers Group as a whole planned to reduce production by a total of 40 percent in 2009.

On Friday, she said that the 90 percent decline in the first quarter would be offset by increased production throughout the year.

De Beers recently restarted production at three out of its four mines in Botswana, which it operates through Debswana, its partnership with the government of Botswana.

The major Debswana mines accounted for more than 65 percent of De Beers' total production in 2008.

"Moving forward, we have seen increases in both demand and sales, Debswana has already returned to work and we expect higher production level to prevail for the remainder of the year," Gould said.

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