Operational Update on Cempaka

Gem Diamonds Limited
11 April 2008

11th April 2008

                              GEM DIAMONDS LIMITED

                       ('Gem Diamonds' or the 'Company')

                         OPERATIONAL UPDATE ON CEMPAKA



Gem Diamonds is an 80% shareholder, in partnership with PT Aneka Tambang, a
company controlled by the Government of Indonesia, in the Cempaka alluvial
diamond mine. Cempaka is located in a low lying coastal swamp area of the South
Kalimantan Province in Indonesia.



Gem Diamonds has temporarily suspended mining to investigate various concerns
recently raised by the regional Government of the South Kalimantan Province on a
number of environmental matters.  The Company's' own environmental consultants
have advised that they believe these concerns to be without merit.  However, in
line with the Company's commitment to best practice environmental issues
management, a thorough investigation by both independent environmental
consultants from the University of Lambung Mangkurat as well as the Provincial
Environmental Monitoring Group for South Kalimantan has commenced.



Mining is expected to resume following these investigations and findings from
both Provincial authorities and independent consultants.



Whilst the duration of the suspension cannot presently be determined, it is not
anticipated to have a material impact on the financial performance of the
Company, given Cempaka's relatively minor contribution to the forecast
consolidated results for 2008.



Cempaka has operated as an alluvial mine in partnership with the Government of
Indonesia since 2004, subsequent to being awarded a Contract of Work by the
President in 1998 that runs for 35 years.  It is the first commercial mine in
the area where artisanal mining has been ongoing for over 1 000 years.



A further update will be provided in due course.


For further information:

Gem Diamond Technical Services
Angela Parr
Tel: [phone]

Pelham PR
James Henderson
Tel: [phone]

Charles Vivian
Tel: [phone]



About Gem Diamonds



Gem Diamonds Limited (LSE: GEMD) is a global leading diamond producer that is
pursuing an accelerated growth strategy through targeted acquisitions and the
development of existing assets.  Gem Diamonds portfolio comprises producing
kimberlite, lamproite and alluvial mines, development projects and exploration
assets.  Operations are situated in Angola, Australia, Botswana, the Central
African Republic, the Democratic Republic of Congo, Lesotho and Indonesia.  Gem
Diamonds produces some of the world's most remarkable white diamonds from its
Letseng Mine and rare fancy yellow diamonds from its Ellendale Mine and an array
of coloured diamonds from its Cempaka Mine.



Established in July 2005, Gem Diamonds listed on the main board of the London
Stock Exchange in February 2007 raising US$635 million.  It is currently
capitalised at approximately US$1.1 billion and had US$175 million of cash on
its balance sheet at 2007 year end.



For further information about Gem Diamonds visit www.gemdiamonds.com.






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