LONDON (Reuters) - Demand for diamonds has started to stabilise, Sheila Khama, chief executive of De Beers in Botswana, told the Financial Times newspaper, adding that the company's flagship mines were operating at 80 percent of capacity.

"Consumption has not improved to anywhere near the levels that we are accustomed to ... but the abrupt rate at which it

was dropping has started to stabilise," she said.

The pace of recovery was picking up in rough diamonds, the paper said on Monday 19 October, citing Khama.

"We are seeing an improvement in the level of sales and the availability of finance to our clients," she added.

De Beers, which produces around 40 percent of the world's rough diamonds, was forced to shut down its Botswanan operations earlier this year in response to a slide in demand for the gem.