More Diamond News!!!!

[Michael Alexander]

Johannesburg - De Beers MD Gareth Penny has refused to specify the amount by which the firm will cut production this year, but market speculation is that the group's 2009 diamond output could be 35% to 40% down.

That would drop production to about 29m carats from the 48.1m carats the group has reported for 2008.

The speculation is backed up by the fact that all the mines owned by Debswana, the 50/50 joint venture between De Beers and the Botswana government which controls the group's main producing mines in Botswana, are currently on care and maintenance

In reply to a question posed during the Anglo American results presentation in London, Penny said production would be "significantly reduced" but that the actual extent was still "work in progress".

Diamond mining industry sources had indicated De Beers has already taken drastic action in Botswana and South Africa to chop production, with output at the huge Jwaneng and Orapa mines halted as well as at the Venetia mine in South Africa.

A Debswana spokesperson confirmed that all Debswana mines are on care and maintenance until further notice.

The spokesperson said: "Debswana is currently in consultation with various key stakeholders about mitigation actions resulting from the global downturn and the necessity to reduce production during 2009 to align with demand, conserve cash, protect employment and maintain readiness for an eventual upturn in the market. Once all these consultations have been concluded, the media will be informed accordingly."

De Beers spokesperson Tom Tweedy said the firm was not prepared to respond to production queries on a mine by mine basis.

The De Beers results for 2008 were published on Friday, as part of the overall annual results presentation from Anglo American. That is a sharp break from the previous tradition, in which De Beers always presented its numbers individually ahead of the Anglo presentation.

Tweedy said the change had been made at Anglo's request, given that it is the largest shareholder with a 45% stake.

The results showed De Beers is in a dire financial situation - but just how dire only emerged in response to questions from analysts.

Interest-free loan

The results statement noted that the three De Beers shareholders - Anglo American, the Oppenheimer family and the Botswana government - had agreed to provide $500m in loans to the company in 2009 in proportion to their shareholdings.

It only emerged through follow-up questions that the shareholders had already put up $300m in loans during 2008 and that the latest $500m loan would be interest-free for two years, after which it would revert to market pricing,

"If the shareholders are prepared to provide interest-free loans, you have to wonder why they did not simply put in more equity funding. The answer could well be that one of the three shareholders may not have been prepared to commit more equity to the business.

"The other point to consider is that perhaps De Beers' financial situation is so bad that it cannot afford to pay any interest on the extra loans, given that it already has net interest-bearing debt amounting to $3.6bn," said an industry source.

Penny said: "We have taken steps to significantly reduce production levels, costs and capital expenditure across all operations. These actions, together with the business restructuring initiatives already completed, have positioned De Beers to weather this tough economic environment."

Last year's production of 48.1m carats was 6% down on the 2007 production level of 51.1m carats. The main drop came from South Africa, where production fell to 12m carats (2007 - 15m carats) mainly as a result of the sale of the Cullinan mine and the closure of the Oaks mine.

Production from Debswana was marginally down at 32.3m carats (33.6m carats) while the only growth came from Canada, where the newly-opened Victor and Snap Lake mines produced 1.6m carats (81 000 carats).

Rough diamond sales for 2008 were virtually unchanged at $6.9bn ($6.8bn), but that will be altered dramatically this year.

RBC Capital Markets analyst Des Kilalea said: "Rough diamond sales are likely to be 40% to 50% down in the first half of the year. There may be some recovery in the second half, but sales of $3.5bn to $4bn look a reasonable target for the full year."

[Michael Alexander]

"TORONTO (miningweekly.com) – Diamond-miner De Beers Canada will lay off 128 employees and 90 contractors at its Snap Lake mine, in Canada's Northwest Territories, as it slows production to meet weakened demand for rough diamonds, the firm said on Tuesday.

The company has already reduced production at Snap Lake, as well as the Victor mine, in Ontario, and reduced capital spending at the operations.

However, the measures taken in 2008 "are no longer enough to keep ahead with the current condition of the market", said senior vice-president for operations Chantal Laoie.

The two Canadian mines were De Beers' first operations outside the Southern Hemisphere.

"This is a very difficult, but necessary business decision, as we respond to the changing client demand for diamonds in the short term," De Beers Canada president and CEO Jim Gowans said in a statement.

De Beers announced in January that it plans to cut as many as 1 415 positions across the group, and Debswana, which is a joint venture between the diamond giant and the government of Botswana, said on Monday it would halt all operations until at least April 14, to conserve cash and try align supply with slowing demand."

[Michael Alexander]

De Beers back to its old tricks
Feb 27 2009 16:10


Johannesburg - So much for the "new" De Beers with its more open and transparent way of doing business. When push turned to shove, the current management showed itself to be true descendants of the old cartel.

I am referring to the devious way in which the group handled the release of its financial results for 2008 and, in particular, the manner in which management did its best to minimise publicity on production cutbacks at the De Beers mines.

Despite being delisted, De Beers has traditionally published its results separately from those of parent Anglo American.

This year the De Beers results were put out as part of the overall Anglo American presentation on February 20. The official reason is that Anglo requested it to be done this way because it is the major shareholder.

The real reason? That's straight out of the doctrines of one Niccolò Machiavelli and his advice to the Medici family, which ran the Italian city state of Florence in the 16th century.

In his famous work The Prince, Machiavelli held that if there was a lot of dirty work to be done, it should be executed all at the same time to avoid drawing out any lingering negative reaction from the victims' relatives and allies.

So, if you have a ton of bad news to deliver, combine it and swamp the news services. Who would be concerned about what's going on at De Beers after Anglo has passed its dividend?

Then there was the refusal by De Beers MD Gareth Penny to elaborate on production cutbacks on the group's mines.

Diamonds and Debswana

The official comment in the documentation was that "De Beers has taken steps to significantly reduce production levels, costs and capital expenditure across all operations".

Asked to be more specific at question time during the Anglo results conference, Penny replied he could not because this was still "work in progress".

But phoning around that afternoon produced a statement from Debswana that all its mines had been placed on care and maintenance until further notice.

That was a huge piece of news because Debswana accounts for about 67% of De Beers' total diamond production. In 2008 this amounted to 48.1 million carats, of which 32.3 million carats came from the Botswana mines.

According to De Beers, the reason for Penny's reticence was that due process had not been completed with the unions and employees in Botswana.

"One cannot have employees read about their future before the agreements and understandings about mitigation steps, and the actual process involved in reducing costs, have been fully discussed by the directly affected parties," said a De Beers spokesperson this week.

So the final nuts and bolts with the Botswanans were put in place in the two hours following the Anglo presentation?

An alternative suggestion from a diamond industry source was to ponder whether the Botswana government - a 50-50 joint venture partner with De Beers in Debswana - had a different agenda and decided to be more forthcoming than Penny for its own reasons.

Getting information about the situation on De Beers' South African mines turned out to be as hard as pulling teeth.

The first reaction from the De Beers spokesperson was a refusal to provide information on a "mine-by-mine basis". That was in response to a query whether Venetia - the largest De Beers producer in SA - had been shut down along with the Debswana mines.

Then came a follow-up email to clarify the situation, which stated:

Forever Precious at the Oscars

"De Beers Consolidated Mines is operating all six mines in South Africa on mine plans appropriate to the demand for new production. This level might change in the course of this year and this possibility has been included in our planning."

The general opinion in the diamond market is that there's very little demand for new production" at the moment, so I published an article containing the speculation that Venetia had been shut down.

All of a sudden De Beers WAS prepared to provide information on specific mines. Miningmx received an immediate denial that Venetia had been closed and an accompanying statement which said:

"Venetia has not ceased production. Production continues on all De Beers mines in South Africa, and Venetia continues as our largest mine with three shifts operating five days a week mining and treating ore and recovering diamonds."

So why could they not have said that in the first place? Does it have something to do with the fact that the Botswana government might not be too happy that its mines have been shut down but the SA mines remain in production?

Finally, neither the statement about Debswana nor a subsequent one about retrenchments at the Snap Lake mine in Canada had been placed on the De Beers group website as of midday, February 26.

They went up that afternoon, shortly after queries were emailed to the De Beers spokesperson asking about Penny's response and why the announcements were not on the website.

Up until that time, anyone visiting the site could have been forgiven for thinking all was just fine in the diamond business while reading about the Forever Precious mark collection and diamonds at the Oscars.

[Michael Alexander]

TORONTO (miningweekly.com) – Diamond giant De Beers is running its Snap Lake diamond mine, in Canada's Northwest Territories, at around 30% to 40% of design capacity, De Beers Canada CEO Jim Gowans said on Tuesday.

A second operation, Victor, in Ontario, is operating just below 100%, at some 90%, he said, in an interview on the sidelines of an event hosted by MineAfrica.

The first six months of the year will be "a challenge", as the financial crisis and slowing economic activity results in depressed sales for the precious gems, Gowans said.

The De Beers group has announced production cutbacks and job cuts at its operations around the world, and said last week that it would lay off 128 employees and cut 90 contractor positions at Snap Lake, as part of the restructuring.

In Botswana, the world's biggest producer of diamonds, the Debswana joint venture between De Beers and the government has announced a temporary production halt across all mines, until at least mid-April, while the group's South African mines are also running below capacity.

Despite the changing market conditions, there has not been a lot of movement in diamond prices, Gowans said.

"It's just that people stop buying; if there is uncertainty in the market, they sit on their money," he added.

De Beers Canada, like the rest of the group, is trying to match production to sales levels, and will continue to change output levels as conditions shift, particularly at Snap Lake.

"It's basically been changing every week, as we monitor the industry and the sights."

The high margins at Victor will mean that cash-flow from the mine is better protected than at lower-grade mines.

The Snap Lake and Victor operations, which De Beers officially opened in July 2008, are the group's first producing mines outside the Southern Hemisphere.

According to the mine plans, Snap Lake is expected to produce 1,4-million carats a year for 20 years, and Victor is expected to deliver 600 000 ct for a life-of-mine of 12 years

[Michael Alexander]

Johannesburg - Diamond producer Trans Hex has ended negotiations over the acquisition of De Beers' Namaqualand division, citing "current uncertain global economic and industry conditions".

The company started negotiations with De Beers in September 2008, but the diamond market has undergone a severe contraction since then as the demand for rough gems collapsed because of the global financial crisis.

This has resulted in De Beers shutting down its Botswana mines until May 2009, and making unspecified production cuts on its South African mines.

The Trans Hex share price - already under pressure because of difficult operating conditions at its Angolan mines - has set a series of new lows, dropping from 380c in November to 150c.

According to a diamond industry source a key issue in the negotiations concerned the environmental liability at the Namaqualand division, which has carried out extensive surface mining since the 1920s.

De Beers had previously disposed of its Koffiefontein and Cullinan mines to Petra Diamonds through deals in which Petra took over the environmental liabilities at these operations.

The source said: "The environmental liability at Namaqualand is enormous, and estimated at around four times the value that Trans Hex actually put on the business."

Trans Hex company secretary George Zacharias said: "The environmental liability was one of the major negotiating points, but the main problem was the uncertainty created by the economic climate which made it impossible to agree on issues fundamental to the valuation of the transaction."

De Beers spokesperson Tom Tweedy said: "The environmental liability at Namaqualand was a factor in the negotiations, but it was not a deal breaker because there was an understanding between the parties on the rehabilitation issues."

Production has been cut back at the Namaqualand division, but Tweedy refused to provide specific numbers for current output. The division has produced up to 300 000 carats annually in the past.

Tweedy said employment levels at the Namaqualand division had dropped steadily over the past four years from about 2 000 to the current level of about 550 mineworkers. "

here's a few of the replies.....

"JapieDownUnder
Mar 06 2009 02:11

And people still think De Beers is committed to SA? Wake up people - De Beers aways talks the talk but they are disinvesting as quickly as they can. They should have made provision for rehabilitating the coastline of the West Coast many years ago but the initial estimated costs were staggering so it was quietly swept under the carpet. I am really not surprised they tried to offload the responsibility onto some other poor unknowing operator - typical De Beers MO.

Peter
Mar 05 2009 21:00

The rehabilitation of the mining area in Namaqualand will never happen. 80 years of mining (@ 300 000 carats p.a.) and their pockets are filled but they don`t have funds for the rehab... Of the 550 remaining workers, another 300 received notice that their services won`t be needed longer. Out of a class of 28 only 3 children returned at the begining of the year. De Beers exploited Namaqualand and now they run away taking every last cent with them, hoping a tsunami will do the rehabilitation."

[Gordon Brown]

Most upsetting Mike especially to De Beers' cheerleaders and apologists. When they going to wake up to the stark realities of the mining business. De Beers is not a benevolent society. They will be the first to admit this.
Best regards
Gordon

[Michael Alexander]

There were early indications of some diamond dealers in Antwerp buying up good quality diamonds cheaply and holding them as a store of value in preference to gold, Trans Hex company secretary George Zacharias told Mining Weekly Online on Thursday.

"We think that, as soon as confidence returns, the diamond market will probably turn fairly quickly," Zacharias said, following the lifting of a cautionary signalling the end of the JSE-listed company's lengthy discussions on the possible acquisition of De Beers' Namaqualand Mines.

"Some say it's going to take three years for the market to turn and others in Antwerp say that there are already indications that the diamond market for good quality stones is turning.

"People who are experts in the industry and who know diamonds, those in Antwerp, see diamonds as a tremendous store of value, and better than holding gold," he said.

Until recently, there was insufficient confidence, but confidence appeared to be returning at certain levels of the business.

"There are early indications of people coming back into the market, diamond players who know diamonds well and instead of buying them like they normally would and sending them for polishing immediately, they are now buying them and holding them, because diamonds are cheap now. In some instances they are 50% cheaper than they were six months ago," he said.

On the ending of the Trans Hex-De Beers negotiations on the purchase of Namaqualand, Zacharias said that, had current diamond prices been at mid-2008 levels, it would have changed the situation fundamentally and the deal might have gone through.

But the risk factors had increased to an extent that made it difficult to agree terms, "but we have no doubt that the long-term demand for Trans Hex's diamonds will be very strong because of the extent of the cutback", Zacharias added.

[Michael Alexander]

Downturn, debt dull diamond sector sparkle


It wouldn't be fitting to mount a barrage of "sale" and "special offer" signs in the windows of jewellers crowded into Antwerp's diamond square mile. But traders, cutters and retailers say business is terrible.

Just a handful of diamonds can be worth a fortune, so the diamond industry -- centred since the 16th century on the Belgian port city of Antwerp -- has for years depended on debt. Now plunging demand, falling prices and lender reticence have left it looking uncomfortably overdrawn.

The global industry's debt, which peaked at $14-billion to $15-billion in mid-2008 according to banks and industry groups, plays a crucial role in financing about $50-billion to $60-billion of trade in cut and rough stones.

"It's one big holiday ... There's just no appetite to buy," said broker Joseph in the well-policed core of Antwerp's diamond district, a multicultural hive with a large core of Jewish and Indian merchants.

He said trade was about one-tenth of usual levels.

Producers De Beers, Russia's Alrosa, Rio Tinto, BHP Billiton and Harry Winston Diamond have come together to discuss plans for an unprecedented joint marketing effort.

De Beers used to foot the bill for generic advertising: "A Diamond is Forever" was its most memorable slogan. "Fewer, better things" is, tellingly, the message for this downturn.

Some experts and insiders predict company failures and a major industry shake-up, that could force greater transparency and might draw in outside investors.

"Some players may not be around. Some big players may not be as strong. The market will be smaller and debt will have to fall," said Victor van der Kwast, international diamond and jewelry group head at ABN AMRO, one of the main names in the business.

He said a 30% to 40% market contraction was possible.

So far only a couple of houses have failed, in Israel. In India, the centre of manufacturing, about half a million of some 800 000 workers have been laid off.

Antwerp, once home to 25 000 cutters but now to only 1 000, has escaped that level of pain. But the city which handles about 80% of all rough diamonds and more than half of all cut stones for an annual turnover of $43-billion, is exposed.

Other centres, notably Dubai, are seeking market share.

Debt 'red flag'
Israel-based diamond expert Martin Rapaport says top-end demand from the rich and super-rich, such as Russian oligarchs or Arab sheikhs, has dried up completely and only smaller gems for engagement rings are keeping the market alive.

The sector's debt is a "clear red flag", bearable with current low interest rates, but not if they creep high.

"It's wait and pray," he said, adding equity positions of diamond companies were "technically wiped out".

Whether or not that is the case diamond jewellery sales in the United States, which accounts for about 45% of the world market, fell by 20% in the traditionally strong Christmas season.

"Manhattan was horrible. It was supported by a lot of foreign buyers, but now that too has dried up," said Dilip Mehta, head of Rosy Blue, a diamond group with $1,7-billion in annual sales.

The collapse is amplified back along the chain, Mehta said, with demand for cut stones predicted to fall by as much as 30% and requirements for rough diamonds likely to drop by up to 60% in the year from October.

Even though some traders hope diamonds can acquire the lustre of gold as a relatively "safe" bet, consumers now need convincing to buy a diamond.

Cut and rough prices have fallen by about 15% and 50% respectively from mid-2008 peaks so anyone holding diamonds as prices collapsed would face problems.

"Nearly everyone with stock has lost as much as 30% to 50%. The big players have lost even more," said small trader David outside one of the about 1 800 diamond businesses in the area.

Many say business is at its worst at least since the early 1980s when a speculative bubble burst, prompting a wave of bankruptcies.

Andre Gumuchdjian, whose family has been in the diamond trade for over a century, said the sector itself faced greater problems in 1981-82, although the mood now was possibly as bad.

"The rest of our investments have fallen as well," said Gumuchdjian, who is president of the Belgian Polished Diamond Traders Association. "We are wondering what will happen."

Christian Van der Veken, sitting in his upmarket jewellery store, noted one key difference: interest rates in the early 1980s were above 10%. Where servicing debt was the main problem then, now the struggle is maintaining credit.

Banks battling with credit problems of their own have had to take a closer look at debt, particularly in view of reports that traders are selling at substantial losses.

"That's when they start hesitating," said Philip Claes, spokesperson for the Antwerp World Diamond Centre. "Everyone is cautious about business today. You have to ensure you get paid."

Follow gold?
Van der Kwast of ABN AMRO said banks had not aggressively lowered limits for clients, but added that it was in no bank's interest to finance losses for a customer.

The biggest firm in the industry, De Beers -- which sold about two-thirds of all rough diamonds at the turn of the century and handles about 40% now -- last month received a two-year $500-million interest-free loan from shareholders including mining group Anglo-American. The company did not respond to inquiries for this article.

But not all can access such funds.

Debt has tailed off and Rosy Blue's Mehta believes it will drop to some $10-billion with a smaller, leaner market.

However, Charles Wyndham, diamond consultant and founder of industry website Polished Prices, said turnover had fallen by much more than had the debt used to finance it, meaning the relative level of debt had risen.

Van der Kwast thinks the downturn may persuade institutional investors to put money into diamonds, and said some pension funds are looking at them as a possible safe haven.

And experts point out diamond prices have held up relatively well compared with most metals and stock markets.

Gumuchdjian also draws attention to the steady recovery of gold prices this year: "I think prices are more poised to go up than down. Diamond prices have always followed gold."

Wyndham argues a sector shake-up may clip the wings of some bigger players and force the sector to accept change, such as adopting clearer pricing.

"I hope for a huge increase in transparency ... If the industry is going to grow it needs to become transparent so as to attract outside funds," he said.

Van der Veken, who sells jewellery priced up to €100 000, believes the market has calmed since a calamitous final quarter of 2008. Optimists talk of a pick-up late this year. But many feel the recovery will not happen until 2010.

"Personally, I wouldn't be surprised if we are among the last to recover," said the AWDC's Claes.

[Michael Alexander]

MITFORD Mundell, General Manager of Namdeb, has told workers to remain positive and help the company survive the economic crisis.

In an internal staff memo leaked to The Namibian, Mundell wrote: "It is time for all of us to stand up to the 'rotten apples' – those that spread their negativeness [sic] amongst us, trying to pull the whole business down and consuming some of our positive energy."
He was referring to those who had criticised the various cost-saving options outlined during meetings with staff last week. Namdeb Managing Director Inge Zaamwani-Kamwi and members of Namdeb and De Beers management toured the mining area to discuss the effects of the global financial crisis on the industry.
It was during these sessions that the possibility of a three-month 'production holiday' was raised. The temporary production halt is expected to save the company up to N$200 million.
"Who are our enemies? During the engagement sessions there were people that openly attacked every initiative and good intention. A common thread from all these attacks is that it comes without any form of positive alternative initiative or suggestion. My question to you is: Why do we tolerate these negative people?" Mundell wrote, inviting feedback and suggestions on the issue.
When The Namibian contacted Mundell for comment on the content of the memo, questions were referred to Namdeb's Manager for Corporate Communications, Ndeshi Hangula-Shikwambi, who said that "the GM's comments in the internal brief were directed to people who were trying to instil negativity towards the company, and this is uncalled for in these trying times".
She said this was made clear to workers who had tried to disrupt the meetings.
Reminding workers of what had been discussed during Zaamwani-Kamwi's visit, Mundell wrote that the "extraordinary economic times" had resulted in reduced demand for diamonds, and hence reduced income for Namdeb, necessitating cost-cutting measures.
"We have been proactive by putting a fit-for-purpose organisational structure in place, reducing production and our labour complement by half, and cutting out wastage (non-value adding cost and activities), resulting in cost reductions of more than N$800 million from 2008 to 2009."
But despite the lashing that the economic crisis has inflicted on the diamond industry, Namdeb remains positive about the future.
"We still have world-class ore bodies, giving us more than enough reasons to stay excited about the potential, and therefore the future of our business," wrote Mundell.
"You should be excited about being part of a team that is facing the storm well prepared, with energy and determination."
He said management hoped to conclude the arrangements for the production holiday by the end of this week.
Hangula-Shikwambi told The Namibian that Namdeb has been successful in its cost-cutting measures so far, with over 500 applications for voluntary separation having been approved and no forced retrenchments.
She also said that Namdeb planned to cut production by 50 per cent, from two million carats in previous years to one million this year.

[Michael Alexander]

Not exactly Diamond News, but has relevance in the bigger scheme of things...

"London - Mining group Anglo American Plc has sent out a request for proposals to banks for a loan of about $2bn, three banking sources close to the deal said on Tuesday.

Negotiations are at an early stage, the bankers said.

The mining sector has been hard hit by the global credit crisis, which has seen demand and equity valuations fall. However, copper prices saw an improvement in March.

Banks are already exposed to Anglo American after the company tapped the European syndicated loan market last year for a $4.45bn loan expiring in 2011, Thomson Reuters LPC data showed.

Anglo American is rated "A" by Fitch and "Baa1" by Moody's."

[Michael Alexander]

TORONTO (miningweekly.com) – The world's biggest diamond-miner, De Beers, has begun to see "signs of improvement" in the market, and expects the trend to continue for the rest of this year.

Demand for rough diamonds fell sharply in the fourth quarter of 2008, as cutters, polishers and retailers responded to the financial crisis by conserving cash and reducing inventory levels, instead of buying new rough stones.

The diamond-mining industry reacted quickly to the drop in demand, curtailing production and, in some cases, halting mines altogether.

De Beers, in which diversified miner Anglo American (Anglo) owns a 45% stake, has announced production cutbacks in South Africa, Botswana and Canada, and has also said it will cut jobs to lower costs.

In Botswana, mines owned and operated by the Debswana joint venture between De Beers and the government were temporarily halted for 50 days in February, although maintenance work continued on the assets during the stoppage.

De Beers announced that Debswana's Jwaneng, Orapa and Letlhakane mines restarted operations on Wednesday, while the smaller Damtshaa mine, and the Orapa No 2 Plant, will remain suspended until the end of 2009.

The first quarter of the year was "a challenging time", De Beers Botswana chairperson Stephen Lussier said in a statement on Wednesday.

However, there are signs of improvement in the market and De Beers expects this to continue as the year unfolds, Lussier said.

"The economic downturn has impacted on all stages of the diamond pipeline, and as retailers have lowered their level of purchasing it has taken time for inventory to work through the pipeline leading to a disproportionately negative knock-on effect on production."

Earlier this month, Canadian diamond-miner and high-end jewellery retailer Harry Winston Diamonds said that it had begun to see some improvement in the pricing and demand for the diamonds produced at its Diavik mine, in Canada's Northwest Territories, that it owns with Rio Tinto.

The market may have reached a bottom, CEO Robert Gannicott said at the time.

In the long term, economic growth in emerging markets will likely ensure that demand outpaces what are expected to be lower levels of demand supply, Lussier said on Wednesday.

In February, Anglo revealed that it, together with two other De Beers shareholders, the Oppenheimer family and the Botswana government,  had extended a $500-million loan to the diamond-miner, to help it get through the difficult economic climate.

[SandyB]

Read some of it in the papers .. lets hope  it continues a slow steady  upswing ... there  is  light at the end of the tunnel ...

[Michael Alexander]

Light at the end of the tunnel, From todays Namibian Paper...

"NAMDEB remains on track to end its production holiday on June 30 as diamond demand begins to show "encouraging" signs.

Daniel Kali of DeBeers says diamond demand has started to pick up slightly, though levels continue to remain significantly low.

"We are beginning to see some encouraging demand for some rough diamonds. However, demand still remains way below pre-crisis levels," he told The Namibian on Wednesday.
Following the onset of the financial crisis and poor trading conditions for the fourth quarter of 2008 and the first quarter of 2009, DeBeers had to undergo drastic cost-saving measures that included letting go of thousands of staff, reducing shifts, and cutting or halting production to meet demand levels.
Overall, DeBeers production almost came to a halt with a 90,8 per cent plunge in production in the first quarter of this year, compared to the December 2008 quarter.
In Namibia this entailed Namdeb imposing a three-month production holiday starting in April, following massive production cuts started in November, and coupled with a voluntary separation exercise that saw the mining giant shed 578 staff by the end of March.
However, despite a slight rise in demand for rough diamonds, De Beers isn't jumping for joy just yet.
"One of the very difficult aspects of this global economic crisis is that it continues to be fluid and unpredictable, and clearly an important aspect in all of this is consumer confidence, of which we are beginning to see a significant improvement. All in all, we are cautiously optimistic about the prospects for a recovery from this crisis," says Kali.
He adds that production will remain in line with demand, signalling that the end of Namdeb's production holiday will not necessarily mean a return to full production.
Dispelling speculation that the production holiday will be extended another four months, Hilifa Mbako, Manager for Corporate Communications and External Affairs at Namdeb, said plans for workers to return to duty on July 1 remain on course.
"The production holiday has definitely not been extended, and there has been no discussion about extending it," he said.
Production at mines in Botswana  resumed last month already, after a 50-day production halt.
Mbako also disputed claims that workers had not received their voluntary separation packages, saying that "all packages have been paid out, and everything is on track regarding the production holiday".
He added that once workers returned on July 1, they would undergo "a rehabilitation and retraining process" for three weeks to re-acquaint themselves with safety procedures at the mines before starting production.
Second quarter production for DeBeers is expected to pick up, with production having re-commenced in Botswana, which usually accounts for 65 per cent of DeBeers' production, but levels will nonetheless remain considerably low."

[Michael Alexander]

From last weeks NEW ERA newspaper, more diamond news...

[Gerda Cloete]

I work for a co that does Condition Monitoring. We have a monthly contract with Debswana and our guys are up there today for the first time in 4 months.