De Beers cutbacks could push up diamond prices

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Mining company scales back production as diamond supply diminishes.

De Beers is cutting back on production to extend the life of its mines, according to reports.

De Beers, which generates 40 percent of global rough diamond sales, plans to cut production to 40 million carats in 2001. In 2008, the mining company produced 48 million carats of diamonds.

Analysts have forecast that such a reduction in mining could boost the price of diamonds by 5 percent.

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De Beers managing director Gareth Penny told the Financial Times: "Do we want to ramp production back up to 48m carats, given the lack of availability in the future?"

There have been no major new diamond mine discoveries in the past two decades. De Beers owns the world’s two largest mines in Africa.

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