Namakwa Diamonds posted a narrower full-year pre-tax loss, driven by higher diamond prices and improving demand in its key markets, and said it expected robust demand from India and China in fiscal 2011, Reuters reported.

The diamond producer, which operates in South Africa, Botswana, the Democratic Republic of Congo (DRC) and Israel, also forecast total production for fiscal 2011 at about 316,000-317,000 carats, said the report published yesterday.

Diamond producers were hit hard during the global economic meltdown, but a rebound in demand has encouraged producers to step up exploration for gems in order to maintain output, it said.

Earlier this month, De Beers, which controls around 40% of the rough diamond market, said it expected to boost output in South Africa by nearly 50% this year as global demand for diamonds recovers.

For the year ended August 31, pre-tax loss at Namakwa was $30.5 million, compared with $89.8 million a year ago.

Revenue tripled to $82 million, while production climbed 77% to 82,925 carats.

Namakwa's shares, which have risen about 29% since the diamond company bought Congo miner Kasai Resource Mining Ltd in December, closed at 41.25 pence on Wednesday on the London Stock Exchange.