De Beers has decided to halt production at its Namaqualand diamond mine in South Africa in the first quarter following a decline in demand for diamonds.

The South African diamond producer will halt production at the site on the west coast for the foreseeable future.

The Namaqualand operation mines diamonds from deposits in river channels and old gravel beaches.

This year, De Beers has slashed production by nearly 50% compared to 2008.

De Beers MD Gareth Penny said that diamond sales were nearly 47% of the level in 2008.