Johannesburg - De Beers reported a 16 percent decrease in total sales to US7.3 billion (R63.5bn) in 2012, the diamond mining company said on Friday.

In the financial year ending December 31, 2012, De Beers' sales of rough diamonds also fell by 15 percent to US5.5bn (R47.8bn), it said in a statement.

Presenting the results in the United Kingdom, CEO Phillippe Mellier said between January 1 and December 31, rough diamond prices fell by 12 percent, in line with polished diamond prices.

De Beers diamond production totalled 27.9 million carats, while in 2011 production stood at 31.3mn carats.

However, the company enjoyed a strong cash flow of US697mn (R6.06bn).

Net debt was reduced to US722mn (R6.3bn) excluding shareholder loans.

Mellier said migration of the London-based sales function to Botswana continued ahead of schedule, with relocation of aggregation, quality assurance, and other preparation activities during 2012.

Construction of the Jwaneng mine Cut-8 infrastructure in Botswana was complete, he said.

The Venetia underground project in Limpopo had received final regulatory clearances and would commence in 2013.

Stores licensed to sell the company's Forevermark diamonds grew by 40 percent to more than 900 independent jewellers worldwide.

Mellier said another major development in 2012 was that Anglo American plc completed its acquisition of a further 40 percent interest in De Beers, bringing its total shareholding to 85 percent.

“In 2012 demand for diamond jewellery in the key markets of the US, China and Japan grew, albeit at a slower pace than in 2011,” Mellier said.

“This, together with higher polished stock levels, resulted in a decline in polished prices, particularly in the third quarter of 2012.”

He said the decrease in rough diamond sales was largely a result of diminished demand, changing product requirements from sightholders, and reduced availability of some goods.

Sales of rough diamonds via De Beers’ auction platform decreased to US356mn (R3.09bn) in 2012 from a previous US405mn (R3.52bn) in 2011, due to subdued buyer activity.

Debswana produced 20.2mn carats, down 2.7mn carats, mainly as a result of the Jwaneng mine slope failure.

In Canada, production remained relatively steady at 1.6mn carats.

De Beers recovered 4.4mn carats in South Africa.

Mellier said the reduced output was partly due to the sale of the Finsch mine in the Northern Cape, completed in September 2011, which contributed 0.9mn carats in 2011.

A total of US59mn (R513.3mn) was spent on exploration work programmes in Angola, Botswana, Canada, India, and South Africa. - Sapa