De Beers Mothballs Mines in Botswana

Jwaneng Diamond MineDe Beers has suspended mining operations at four mines in Botswana because of a reduction in diamond demand, the Financial Times reports

The mines, source of half of the group’s supply of rough diamonds and nearly a quarter of the world’s by value, sold no diamonds in November and “very little” in the subsequent two months, Sheila Khama, chief executive of De Beers’ Botswana business, told the U.K. business publication.

The four mines that make up the Debswana Diamond Company (a joint venture between De Beers and the government of Botswana) have been out of operation since the start of the year, Khama told the newspaper. The mines include Jwaneng, the world’s richest by value, and Orapa, the biggest by volume.

The home page of the Debswana Web site reads that “it is unavailable due to maintenance.”

Khama could not say when production would return but estimated that diamond demand may not return until 2010, according to the newspaper.

Global sales of diamonds have fallen to a standstill, the newspaper reports, primarily because the U.S., which normally consumes as much of half of any year’s diamonds, is in recession. Diamond cutters are weighed down with debt and stock they cannot move to retailers.

The mines, the country’s largest private-sector employer, had not yet cut its 6,300 work force, the newspaper reports. However, workers at Botswana’s downstream operations had had their hours cut.

The southern African country of 1.8 million people depends on diamonds for four-fifths of the foreign exchange it earns and about a third of gross domestic product, the newspaper reports.