De Beers announces 2008 results

Notes only a 1% increase in annual sales
De Beers announces 2008 results

A press release from De Beers informs that in the year 2008, the mining giant has seen a slight 1 percent increase in its total sales of natural rough diamonds over the sales of 2007. In 2008, sales amounted to US$6888 million, while the previous year they figured at US$6836 million. The company noted the first three quarters of the year to perform better, as sales were supported with a buoyant demand and the resultant increased prices. The fourth quarter was hit with the economic slowdown and the fall in commodity prices. The sales figures for the year included those for the DTC.

The global economic crisis is having a significant impact on sales of retail diamond jewellery liquidity, in turn affecting demand for rough diamonds in the cutting centres. As a result, there has been a reduction in sales of rough diamonds by the DTC. “We expect trading conditions to remain challenging throughout 2009. We have taken steps to significantly reduce production levels, costs and capital expenditure across all operations. Recent market research from the US and China confirm that consumers’ desire for diamonds remains strong. As economic conditions improve, emerging demand, coupled with the decline in long-term diamond supply, will form a positive foundation for future growth in diamond prices.” said Gareth Penny, Group Managing Director, De Beers.

De Beers and its joint venture partners produced 48.1 million carats (2007: 51.1 million carats) in the entire year. For the first time in its history, De Beers opened three new mines in one year - Victor Mine in northern Ontario- Canada, Snap Lake Mine in the Northwest Territories and Voorspoed Mine in South Africa.

The company has noted a 17 percent fall in its cash available from operating activities, which has amounted to US$700 million, while in 2007 the cash available was US$844 million.

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