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De Beers announces 2-year pause at SA’s largest diamond producerSouth African diamond production has taken a major hit as De Beers announced a two-year production pause at Venetia, the country’s largest diamond producer. The mine produces more than 40% of the country's annual diamond output.  A De Beers store on Rodeo Drive in Beverly Hills, California. Image credit: Minnaert, CC BY-SA 3.0, via Wikimedia Commons The diamond producer says it decided to reduce costs while also rephasing capital expenditure on its underground project. Diamonds lose their shineENCA reports that Anglo American — which owns 85% of De Beers Group — is seeking to offload its stake as the natural diamond market faces intense pressure from laboratory-grown gems. “In line with our commitment to focus and streamline our business, we are making a number of changes to De Beers to ensure greater business resilience in the near-term, while supporting long-term value creation,” said Al Cook, CEO of De Beers Group. “We recognise the protracted challenging conditions as the diamond industry evolves, though we are encouraged by signs of consumer demand growth in the US and beyond, particularly in higher quality diamonds. “Global rough diamond supply is falling, bringing more support to the market. “The changes we are making to our business are focused on underpinning our efficiency now and into the future, favourably positioning De Beers in its leadership role.” This will involve critical infrastructure investment to enhance the mine’s capacity and efficiency, with the intention of supporting future production growth as business and industry conditions improve.  Workforce woesThe decision is expected to negatively affect the mine’s workforce, drawing criticism from the National Union of Mineworkers (NUM). SABC News reports that De Beers has commenced Section 189 retrenchment proceedings, thereby risking thousands of jobs. NUM national health and safety secretary and diamonds sector chief negotiator, Masibulele Naki, has criticised the diamond producer’s lack of communication. “It was deliberate for Venetia management not to communicate with the National Union of Mineworkers, which is the only majority union organising in the Venetia mine. “Because in the past, from our last wage negotiations — we were aware of the situation that is facing the diamond industry — even in all of Africa.” This latest production pause follows De Beers’ decision earlier this year to pause the Tuzo Phase 3 expansion project at the Gahcho Kué mine in Canada. |