London, England — MININGREVIEW.COM — 03 February 2009 – Gem Diamonds Limited – a global diamond producer pursuing an accelerated growth strategy through targeted acquisitions and the development of existing assets – is expecting a better performance this year after a cost-cutting exercise.
In a statement issued here, the company, which has mines in Lesotho, Australia and Indonesia, said it had conducted a review in response to the global economic downturn that has hurt the diamond sector, having warned in November that it might make a loss in 2008.
“Every single asset was reviewed, exploration and long-term development expenditure was significantly reduced and, wherever possible in the producing assets, costs were substantially cut,” the statement said.
“The economic crisis has caused management to adopt the remedial measures outlined above, which should significantly improve the cost base and improve performance in 2009,” it added.
Gem Diamonds revealed that diamond prices at its flagship Letseng mine in Lesotho had held up well during the fourth quarter, despite the global economic crisis that hit overall diamond values.
Prices for diamonds at Letseng – renowned for producing large and high-quality gems – rose 37 percent to $2 139 per carat, compared with the third quarter, bringing them back in line with the average of $2 123 per carat for the whole of 2008.