TORONTO (miningweekly.com) – Diamond giant De Beers is running its Snap Lake diamond mine, in Canada's Northwest Territories, at around 30% to 40% of design capacity, De Beers Canada CEO Jim Gowans said on Tuesday.
A second operation, Victor, in Ontario, is operating just below 100%, at some 90%, he said, in an interview on the sidelines of an event hosted by MineAfrica.
The first six months of the year will be “a challenge”, as the financial crisis and slowing economic activity results in depressed sales for the precious gems, Gowans said.
The De Beers group has announced production cutbacks and job cuts at its operations around the world, and said last week that it would lay off 128 employees and cut 90 contractor positions at Snap Lake, as part of the restructuring.
In Botswana, the world's biggest producer of diamonds, the Debswana joint venture between De Beers and the government has announced a temporary production halt across all mines, until at least mid-April, while the group's South African mines are also running below capacity.
Despite the changing market conditions, there has not been a lot of movement in diamond prices, Gowans said.
"It's just that people stop buying; if there is uncertainty in the market, they sit on their money,” he added.
De Beers Canada, like the rest of the group, is trying to match production to sales levels, and will continue to change output levels as conditions shift, particularly at Snap Lake.
“It's basically been changing every week, as we monitor the industry and the sights.”
The high margins at Victor will mean that cash-flow from the mine is better protected than at lower-grade mines.
The Snap Lake and Victor operations, which De Beers officially opened in July 2008, are the group's first producing mines outside the Southern Hemisphere.
According to the mine plans, Snap Lake is expected to produce 1,4-million carats a year for 20 years, and Victor is expected to deliver 600 000 ct for a life-of-mine of 12 years.