De Beers 2009 Production Expected to be Halved

De Beers produced 7.885 million carats in the third quarter ending September 30, bringing year to date production to 14.476 million carats, according to an Anglo American plc interim production report. The output is a 39.9 percent decline from the third quarter of 2008 and a 61.2 drop for the nine-month period.

Anglo American, which holds a 45 percent stake in De Beers, reported on Thursday that the diamond miner is on track for full year production to stand at 50 percent of 2008 levels.

Third quarter production is 43 percent higher than second quarter production. Since the second quarter, production has restarted at Orapa and Jwaneng in Botswana and operations have resumed in South Africa. Production from the Canadian operations - Snap Lake and Victor - was impacted in the third quarter by a production holiday taken in August.

Anglo American said that third quarter diamond production is “trending up from the first and second quarter of 2009 in line with stabilizing market demand.”

In 2008, De Beers recovered 48.132 million carats that sold for $6.89 billion. To achieve half of 2008’s production, 24 million carats, De Beers will need to mine about 10 million carats in the fourth quarter. Considering the rising demand and prices of rough, De Beers should be able to find a willing market for these goods.