JOHANNESBURG (miningweekly.com) – Canadian-based diamond producer BRC DiamondCore said on Wednesday that it would maintain the suspension of bulk sampling at its projects in South Africa’s Northern Cape province, and that it would start consultations with labour unions and employees over jobs.

The JSE-listed company's share price plunged to R1,50 a share on the news, down 44% on Tuesday's closing price of R2,69 a share. By 11:00, shares were trading slightly higher at R1,40 a share. 

BRC DiamondCore said it would be shutting down its Paardeberg operations for the immediate future, and would be scaling down its Silverstream bulk sampling operations from three shifts to one shift.

This was in a response to “persistent depressed diamond prices and the deepening economic downturn”.

BRC DiamondCore stated that by maintaining a single shift at Silverstream, it retained flexibility and could rapidly resume an increased level of production, if justified by market conditions, while maintaining the benefits of a downsized operation.

“Management deems these steps as essential owing to the ongoing need to conserve cash in the light of persistent adverse market conditions. Wen neverthelessn still anticipate a recovery in rough diamond prices in 2009,” said BRC DiamondCore president Mike de Wit.

He added that the company maintained the view that the recovery in diamond prices, along with a stronger US dollar exchange rate against the company’s operating currency, as well as lower energy costs, would position it more favourably in the year ahead.

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