WINDHOEK (AFP) — Net profits from Namibia's largest diamond producer, Namdeb, a subsidiary of DeBeers, dipped almost by half last year despite slight increase in production, the company said on Friday.
"Net profits for the year 2007 came to 143 million Namibian dollars (18.4 million US dollars) compared to 305 million Namibian dollars (39.3 million US dollars) in 2006," Namdeb, jointly owned by the Namibian government and the DeBeers, said in a newspaper advertisement.
Diamond production in 2007 was 2,176 carats, four percent up from 2,085 carats the previous year, with half of the diamonds found on land and from marine mining in the Atlantic Ocean.
"Sales of carats were five percent lower than 2006 as a result of production schedules. Revenue earned from diamonds in 2007 came to 4.56 billion Namibian dollars (588 million US dollars), 15 percent less than the 5.36 billion Namibian dollars (691.5 million dollars) in 2006."
Sales dropped last year "as a result of a change in diamond mixes combined with effects of price correction for rough diamonds," Namdeb said.
Profits before tax amounted to 633 million Namibian dollars, down from 1.2 billion Namibian dollars in 2006.
"This is due to reduction in revenue, production costs partially offset by decreases in prospecting charges and other operating expenses," Namdeb explained.
"Production costs came under pressure during 2007 due to higher than anticipated fuel prices, salary increases and maintenance work required at a sea wall because of adverse weather conditions."
Diamonds were first found in Namibia a century ago, in April 1908. Today Namibia is the world's sixth-largest diamond producer, and its precious stones are sought after due to their high clarity and quality.
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