TORONTO (miningweekly.com) – Diamond giant De Beers has cancelled a planned four-week December  shutdown at its Snap Lake underground mine, in Canada, because of improving market conditions, the company said on Tuesday.

"This is a good news decision in response to some positive trends we are seeing in the marke place," commented De Beers Canada CEO Jim Gowans.

Besides Snap Lake, in the Northwest Territories, De Beers also owns and operates the Victor mine, in Ontario.

After rough diamond demand plummeted in the fourth quarter of last year, the company cut employee and contractor jobs at Snap Lake and reduced output, first late in 2008 and then again in February this year, to trim costs and match market demand.

However, there are increasing signs that demand for rough diamonds has begun to recover, particularly from Asian markets.

Two weeks ago, Rio Tinto, which operates the Diavik mine, also in Canada's Northwest Territories, confirmed that the operation would not close in December, as had been previously planned, also citing improvements in demand and prices for rough diamonds.

"While we are optimistic about the improvements we are seeing in the global industry, we will continue to make decisions carefully with a focus on the long-term success for our new Canadian mines," Gowans said in a statement on Tuesday.

Earlier this year, De Beers responded to the drop in demand by slashing production at its operations around the world, even going as far as completely halting output from Debswana unit, in Botswana, in February.

Other producers, including Russia's Alrosa, also withheld production from the market, which helped support prices and resulted in a clearing out of stocks held by cutters and polishers and at the retail end of the business.

Miners have since started ramping up output and sales of rough diamonds are back up, but Robert Gannicott, the CEO of Harry Winston Diamond Corp, which owns a stake in the Diavik mine and also sells high-end jewellery in a separate business unit, said earlier this month that there were no signs yet of an over-supply weakness in the market.