De Beers 2008 Rough Diamond Sales $5.93 Billion

Total De Beers Group sales in 2008 rose 1 percent to $6.888 billion, the company announced Friday. Natural rough diamond sales, including joint ventures, totaled $5.93 billion, rising a minute 0.17 percent from $5.92 billion. Production decreased sharply.

After nine months of rising prices, De Beers was hard hit by the decline in prices and demand for rough prices in the last quarter.

The company released the following figures:

Net interest bearing debt fell to $3.55 billion thanks to a stronger U.S. Dollar.

De Beers and its joint venture partners produced 48.1 million carats, a 5.8 percent decline from the 51.1 million carats produced in 2007. Production from Debswana was 32.3 million carats (2007: 33.6 million carats), Namdeb yielded 2.1 million carats (2007: 2.2 million carats), while the output from South African operations of De Beers Consolidated Mines (DBCM) fell to 12 million carats (2007: 15 million carats) due to the sale of Cullinan mine and the closure of The Oaks mine.

The Canadian Snap Lake and Victor mines produced 1.6 million carats (2007: 81,000 carats).

In its outlook, De Beers said the global economic crisis is having a significant impact on sales of retail diamond jewelry, liquidity and demand for rough diamonds, which resulted in a reduction in rough diamond sales by the DTC.

"We expect trading conditions to remain challenging throughout 2009. We have taken steps to significantly reduce production levels, costs and capital expenditure across all operations," the miner said. "These actions, together with the business restructuring initiatives already completed, have positioned De Beers to weather this tough economic environment."

Lab diamond maker Element Six recorded total annual sales of almost $500 million for the year and growth of 25 percent.

For the first time in its history, De Beers opened three new mines in one year. In Canada, Victor Mine in northern Ontario was completed and commissioned eight months ahead of schedule and under budget, while Snap Lake Mine in the Northwest Territories commenced commercial production in early 2008.

De Beers’ Voorspoed Mine in South Africa was also completed on time and commissioned ahead of budget, and was officially opened in November.

De Beers also completed the sales of Cullinan Diamond Mine in South Africa, and Williamson Diamond Mine in Tanzania.

"Recent market research from the U.S. and China confirm that consumers’ desire for diamonds remains strong. As economic conditions improve, emerging demand, coupled with the decline in long-term diamond supply, will form a positive foundation for future growth in diamond prices."