No Plans To Shut Down Damtshaa Mine - Debswana

By Edgar Tsimane
Correspondent | Monday December 8, 2008 00:00

'We are not planning to close down the mine,' the company's spokesperson Esther Kanaimba told the Monitor on Friday.

'We are analysing the current situation to see how best to position the company.'
 A not-so-glittery picture of the diamond industry was again painted last Thursday by financial services firm RBC Capital Markets, which warned there would be little hope of any significant improvement in the price of diamonds until well into 2009, according to Mining Weekly online.

Debswana appears thus far to have left those jittery about the future of its newest operation to delve into the economic murk that is the global financial crisis for answers.

It is unclear how the company plans to keep Damtshaa Mine afloat under prevailing turbulent circumstances. But the company has said it is 'fully prepared to reduce production to be consistent with the prevailing level of demand for new rough diamond supply'.

RPC said it expected further output cuts to be made, especially by junior miners.
 RBC also reported that junior producer DiamondEx had been 'forced into a government-guaranteed loan following lower-than-expected price indications'. RBC said De Beers was believed to be talking to the government about curtailing output following Gem Diamonds' announcement of output cuts in Australia and Indonesia.

Damtshaa Mine lies 20 kilometres east of the Orapa kimberlite pipe.
It came into operation in 2003 and is expected to produce some five million carats in the next 31 years.

Diamond prices have declined by between 30 and 50 percent owing to the global recession that began in the US nearly a year ago.