JOHANNESBURG (Reuters) - De Beers, the world's top producer of rough diamonds, said total sales for 2008 rose 1 percent to $6.9 billion after a sharp slowdown in demand in the last quarter of the year, while output fell 6 percent.
De Beers said in a statement on Friday the global economic crisis was having a negative impact on sales of retail diamond jewelry, liquidity and demand for rough diamonds, which had hurt the sales of rough diamonds.
"We expect trading conditions to remain challenging throughout 2009," De Beers, 45 percent owned by mining group Anglo American
De Beers said its marketing unit, the Diamond Trading Company (DTC), had posted record sales in the first nine months of last year, but sales tumbled in the fourth quarter at the onset of the economic slowdown.
De Beers said production fell to 48.1 million carats from 51.1 million carats in 2007.
De Beers, which controls around 40 percent of the rough diamond market, said the drop was seen in Botswana, Namibia and South Africa, where output fell sharply after it sold its Cullinan mine and closed The Oaks mine.
"Over the first nine months, the DTC achieved record sales of natural rough diamonds as buoyant demand translated into increased prices," De Beers said.
"Fourth quarter sales slowed significantly as a result of the onset of the global economic downturn and the subsequent liquidity squeeze in the key global cutting centers."
To cope with the expected slowdown in its business this year, the company said it would significantly reduce production levels, costs and capital expenditure across all its operations.
It said the actions would help it weather the tough times.
(Reporting by James Macharia)
