Elegano.com

De Beers is hoping its branded Forevermark diamond will stimulate sales in the Far East.

London--De Beers saw rough-diamond sales plummet 57 percent in the first half of 2009 as sightholders took less goods in an effort to clear out the pipeline and increase liquidity, according to financial results released by the company on Friday.

Sales of rough diamonds by De Beers' Diamond Trading Co. (DTC) fell from $3.74 billion in the first half of 2008 to $1.4 billion in the first half of 2009.

Despite the drop, De Beers noted marked improvement in the market as the year progressed, with sales climbing from $400 million in the first quarter to $1.311 billion in the second quarter.

Overall, De Beers reported sales of $1.71 billion in the first half of 2009, down from $3.74 billion in 2008.

As the global economic crisis worsened toward the end of 2008, De Beers took steps to cut costs in 2009, reducing its global workforce by 23 percent, including a 25 percent reduction in the United Kingdom.

In addition, the diamond giant slashed production in the first half of 2009, temporarily shuttering mines in Canada, South Africa, Botswana and Namibia.

Production in the first half of 2009 stood at 6.6 million carats, down 73 percent compared with the same period last year, according to the release. The reduction in production came mainly in the first quarter, when De Beers mined only 1.1 million carats, down 91 percent from 2008.

Since that time, all the mines except for one in Botswana have resumed operations, with production in the second quarter rising to 5.5 million carats.

De Beers anticipates production will be down 50 percent for the year overall.

During the first half of 2009, De Beers shareholders loaned the company an additional $500 million and, as of June 30, the shareholder loans totaled $817 million.

De Beers has begun discussions with lending banks regarding the renewal of a $1.5 billion term loan facility that is set to expire in March 2010. According to the release, discussions are ongoing, and De Beers plans to have reached a conclusion sometime in the second half of 2010.

Moving forward, the release states that De Beers is investing in three major initiatives to drive demand for diamonds in different parts of the world.

More at: http://tinyurl.com/kk5e46