De Beers will suspend output at South Africa’s largest alluvial diamond mine in the first quarter after the world economic slump slashed demand for luxuries, Bloomberg reported.



The Namaqualand diamond operation will be suspended “for the foreseeable future,” Johannesburg-based De Beers said in an e-mailed response to questions by Bloomberg, without giving a reason. It previously forecast output of about 330,000 carats for last year at the site on the west coast, where diamonds are mined from deposits of old gravel beaches and river channels.



The world’s biggest diamond producer cut overall output by about half this year from 48.1 million carats in 2008, the Bloomberg report said.



De Beers shareholders Anglo American Plc, the Oppenheimer family and Botswana’s government also agreed in principle to inject about $1 billion into the diamond company to reduce its debt.



De Beers’s South African unit produced 6.37 million carats of diamonds in the first half, making it the second-biggest of the group’s production regions after Botswana.



The company, which accounts for about 90% of South African diamond output, didn’t give a percentage figure for its use of mining capacity in the country in the response to questions yesterday.



South African diamond production fell 43% in October from a year earlier, government statistics showed yesterday.



Trans Hex Group Ltd., a South African diamond producer, in March said discussions over Namaqualand with De Beers had ended because of the world economy. De Beers had begun talks to bring black owners into the mine, it said the previous September.



Diamond mining companies in South Africa are required to transfer ownership of some assets to black people disenfranchised by apartheid. De Beers sold South African mines including Koffiefontein and Cullinan to black investor groups.



Operations at Namaqualand were halted from 1932 to 1937 due to a recession in the diamond market, and again from late 1938 till 1943 during World War II, according to De Beers’ website.