Diamond mining in Namibia is expected to record a growth rate of 18.8% in 2010, though it will contract by 0.1% in 2011, according to a report from the country’s Central Bank.

Some 929,006 carats of diamonds were recovered in Namibia in 2009, marking a 58.2% reduction from the production level of 2,200,000 carats in 2008. The reduction is not solely attributed to the financial crisis, but stems from the production holiday imposed by Namdeb during the first quarter of 2009, as well as the fact that Namdeb had already planned in 2007 to reduce production as onshore diamonds systematically began to be depleted.

The bank finds that diamond mining will continue to underperform in the short to medium term due to the depletion of onshore diamonds, though it reports that Namdeb is investigating expansion plans if global demand picks up.