De Beers Plans Cutbacks

Diamond mining firm plans to reduce production, expenditures.

LONDON – De Beers SA is reducing its rough diamond production levels significantly, cutting costs and slashing capital expenditures in the face of a “challenging” 2009.

The diamond mining company said its fourth-quarter sales had slowed “significantly” after nine months of buoyant growth.

Total sales for the year ended Dec. 31 rose 1.5 percent to $6.9 billion, or $10.15 billion, while net profit was $90 million, or $132.4 million, compared with a loss of $521 million, or $766.6 million, due to one-off items during the previous year. Dollar figures are converted from euros at average exchange rates.

“The global economic crisis is having a significant impact on sales of retail diamond jewelry, liquidity, and demand for rough diamonds in the cutting centers,” the company said. “This, in turn, has resulted in a reduction in sales of rough diamonds by the Diamond Trading Company.”

For complete coverage, see Monday’s WWD.