Namakwa Diamonds, vertically integrated diamond mining company, reported a loss of $76.7 million during the first half of its fiscal year 2009. The low diamond prices also caused Namakwa to preserve cash rather than pursue expansion as it had in 2008. The junior miner laid off 562 employees during the first half, which closed on February 28, 2009.
According to Nico Kruger, chief executive officer (CEO), “The impact of the global economic crisis on the diamond industry in the first half of this financial year has been substantial and has been the dominant factor over this period. There has been a considerable drop in both rough and polished prices, with most producers scaling back operations or shutting down their mines completely. In light of these conditions, Namakwa undertook a review of operations in November 2008, which resulted in it scaling back operations substantially by placing four mines on care and maintenance and implemented various cost-cutting measures to focus on preservation of cash and the maximization of value in the long run.”