Page last updated at 17:14 GMT, Monday, 23 February 2009

Botswana diamond firm shuts mines

Debswana will initially close four mines

Debswana, a diamond producing firm jointly owned by Botswana's government and De Beers, will close two mines for the rest of the year as demand falls.

Debswana's four diamond mines will close on 25 February, but two of them will resume work on 14 April.

Its Damtshaa mine and Orapa No 2 Plants will be closed till the end of 2009, directly affecting 580 employees.

These workers will be redeployed within the company or offered voluntary early retirement and other incentives.

"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," said De Beers.

Diamond giant De Beers, the world's largest diamond producer by value, said in a statement last week that it produced 48.1 million carats in 2008, of which Debswana produced 32.3 million carats, down 4% from 33.6 million carats in 2007.

The global financial and economic crisis forced even wealthy consumers to cut their spending on luxury goods, including jewellery.

Luxury-jewellery retailer Tiffany said in January its same-store sales for the holiday season fell by 24%.

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