HomeDiamonds & GemstonesGlobal crisis hits Namdeb diamond output

Global crisis hits Namdeb diamond output

Mining Area 1 “’
one of Namdeb’s main
Windhoek, Namibia — MININGREVIEW.COM — 21 May 2010 – High global diamond stocks and lower consumer demand were mainly responsible for the drop in output and sales at Namdeb Diamond Corporation “’ the partnership between the Namibian government and diamond giant De Beers “’ last year, but the company says it expects a recovery in 2010. Namdeb managing director Inge Zaamwani-Kamwi noted that the global diamond industry, in line with most products in the luxury goods sector, had been severely affected by the global recession in 2009. Namdeb said in a statement issued here that diamond production in carats had declined by 56% in 2009 compared with the previous year, while sales had dropped by 25%, after demand was hit following the global economic crisis.

The company said that as a result it had aligned production levels and cost base with reduced demand, laid off some employees and shut some production units to curb costs.

“Consumer demand for diamond jewelry is beginning to recover, driven in part by the strength of the developing markets of China and India,” Namdeb said in its statement.

It added that its diamond sales revenue at N$3.37 billion was 40% lower than in 2008, partly due to lower sales and a decline in the rough diamond prices, but added that this was partially offset by an increase in the stone size recovered. “The difference in the reduction of sales and production was made up from diamond inventory carried forward from 2008,” it said.

The company, which made a loss before tax of N$555 million compared with a profit of N$983 million in 2008, said it would continue to take a cautious and prudent approach to production and sales in 2010, in view of the fragile global economy. It expected a gradual increase in output, sales and prices.