De Beers to cut output, jobs on weak demand

Fri Jan 16, 2009 12:00pm GMT
 

By Eric Onstad and James Macharia

LONDON/JOHANNESBURG (Reuters) - De Beers, the world's top diamond producer, will cut production, capital spending and jobs this year as the global recession hits demand for luxury goods, officials said on Friday.

"In the first half of 2009, we will reduce production across our mining portfolio and adjust that as we go based on client demand," Director of Communications David Prager told Reuters in an interview.

"Suffice to say, the reduction in production will be significant," spokeswoman Lynette Gould said in an email.

De Beers, 45 percent owned by mining group Anglo American Plc, will also cut capital expenditure and exploration, but has no plans to shut down any mines, Prager added.

Consultation on job losses has begun at mines in Botswana, South Africa, Namibia and Canada as well at the head office in London, Prager added.

The job cuts in South Africa would be less than 1,000 out of a total work force of 3,500, Gould added.

Sales of diamond jewellery during the key holiday season fell in line with expectations, Prager said. "Most sectors are experiencing a decline in sales ... luxury products, diamonds included, are not immune."

RESILIENT DIAMONDS   Continued...

<p>The logo of the world's top diamond producer De Beers is seen on their boutique in Beverly Hills, California, August 5, 2008. REUTERS/Fred Prouser</p>

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