De Beers to reduce diamond production

South African diamond mining major De Beers will produce 28-30 million carats of rough diamond in 2012, lower than last year's production of 31.3 million carats, a senior company official said.

"We expect to produce around 28-30 million carats (of diamonds) this year. Last year it was higher. We have reduced the production due to lesser demand," Stephen Lussier, executive director of De Beers and the CEO of the company's Forevermark brand, said here late Friday.

In 2011, De Beers produced 31.3 million carats of diamonds - down from 33 million carats produced in 2010.

In the first half of 2012, the company produced 13.4 million carats of diamonds - down from 15.5 million carats produced during the corresponding period of 2011.

"The demand for diamonds during the first half of 2011 was strong while in the second half it was flat," Lussier said.

According to the Forevermark chief executive officer, the global financial crisis of 2008 and 2009 forced consumers to buy less in Europe and Japan and De Beers had even closed some mines.

Subsequently, the demand grew by 10 percent from China, India and the US and in 2011 the diamond prices went up by 30 percent.

He said globally the demand growth is around 3-4 percent.
On industrial diamonds, he said De Beers earned around 5-6 percent of its revenue from the segment but it was the consumer segment that was more profitable.