Debswana, the world's biggest diamond producing company by value, will temporarily shutdown its operations and suspend production at two of its mines for the remainder of 2009, the company said on Monday.
Debswana, a 50/50 joint venture between the government of Botswana and De Beers Group, said it would shut operations from Feb. 25 to April 14.
After the shutdown, production at its Damtshaa mine and Orapa No. 2 plants will be suspended for the rest of the year and said production would also be reduced at other operations.
These actions are being taken to mitigate the effects of the global downturn by reducing production during 2009 to align with demand, conserving cash for the company, protecting employment and maintaining readiness for an eventual upturn in the market, it said.
Debswana said the suspension of production will impact 580 of its workers. The company plans to redeploy the employees within the company, along with offering staff voluntary early retirement and other incentive packages.
The company said the medium and long-term fundamentals of the diamond industry are strong and said it expects demand growth to continue in the long term. (Reporting by Moabi Phia, Writing by Agnieszka Flak)
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