Industry News
De Beers Keeps Namaqualand Diamond Mines Open, Seeks Buyer
22/03/2009
By Polished Prices
De Beers is going to keep Namaqualand Diamond Mines open, though at a reduced level, and will try to sell it when market conditions improve, the company stated, Business Day reported.
Talks between Trans Hex and De Beers on a possible deal were terminated two weeks ago. “The company is confident that in normal diamond trading conditions, and with few known new diamond resources on the horizon, and the likely growing demand for diamonds in the future, Namaqualand Mines remains an attractive alluvial diamond deposit to an investor,” media relations manager Lynette Gould told Business Day. “The company will carefully consider the best route forward when the circumstances are more conducive.”
The global diamond industry has been hit hard not only by pressure on consumers but also by tight credit conditions, as the diamond pipeline depends on bank financing. Industry monitor PolishedPrices’s index of (polished) diamond prices is 14.2% lower than it was a year ago, the report said.
Polished Prices said this week the Diamond Trading Company (DTC), De Beers’ marketing arm, was offering any sightholder doing business of more than $40 million in the next two sights a substantial discount on the next $20 million of business it concluded.
Gould said that in response to feedback from sightholders and “in light of surplus availability for which demand has otherwise been exhausted,” the DTC was targeting high volume business but the terms remained strictly confidential.
Although De Beers remained vague about how much diamond operating capacity would be suspended this year, it is likely to peak at over 70% with temporary closures in Namibia and Botswana. Those two diamond operations together contributed 34 million carats of total group production of 48 million carats of diamonds last year, according to the report.
De Beers’ two new Canadian diamond mines, Snap Lake and Victor, closed for a fortnight last December and will close for another two weeks this December.
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