De Beers halts South Africa’s flagship diamond mine

Mining giant De Beers has suspended production at the Venetia mine for two years – the only mine in the country that supplies more than 40 % of its natural‑diamond output.

The decision follows a steep decline in worldwide demand, driven by a drop in purchases in China and growing competition from cheaper lab‑grown diamonds. Prices across the industry have fallen, and the International Diamond Consultants’ rough‑diamond index has nearly halved since 2022.

De Beers told workers it needed to cut costs and streamline operations. The mine’s 4,000 employees will see their jobs at risk, adding strain to an already fragile South‑African mining sector that employs close to half a million people and contributes more than 4 % of the nation’s GDP.

The flagship mine, located in the far north of Cape Town, will use the downtime to upgrade infrastructure, making operations more efficient and increasing capacity when production resumes.

Lab‑grown diamonds, first introduced commercially in the 2000s, have gained popularity because of ethical and environmental concerns. De Beers has responded by launching its own synthetic products at a fraction of the price of natural stones, but the market still lags behind the premium natural diamond segment.

The company is majority‑owned by Anglo American, which is reportedly looking to divest the mineral business and pivot toward copper, a sector buoyed by the recent AI boom.

The Virgiana shutdown marks the latest scaling‑back move for a firm long tied to the controversial legacy of Cecil Rhodes. His name still surfaces as South Africa grapples with attempts to decolonise its institutions and business practices.

Industry analysts expect the market to recover slowly over the next few years, with demand returning as consumer sentiment realigns and synthetic diamonds seek to capture even greater market share.

Source: BBC News Africa