Key facts
- De Beers is halting operations at its Venetia mine in South Africa for two years.
- The mine is the country's largest diamond producer, responsible for over 40% of its output.
- Falling consumer demand and competition from lab-grown diamonds are cited as reasons for the suspension.
- The rough diamond price index has fallen significantly since 2022.
Diamond giant De Beers is suspending production at its flagship Venetia mine in South Africa for two years, citing a significant drop in demand and increased competition from lab-grown diamonds. The mine, located in the northern part of the country, accounts for more than 40% of South Africa's total diamond production and employs over 4,000 people.
The global diamond market has faced challenges, with the International Diamond Consultants' rough diamond price index nearly halving since 2022. This downturn is attributed to shifting consumer preferences, including a move towards more affordable lab-grown diamonds, which are also gaining traction due to ethical and environmental concerns associated with traditional mining.
De Beers, which has a history dating back to 1871 and was founded by Cecil Rhodes, is implementing cost-cutting measures and streamlining operations in response to the depressed market conditions. The company, like other established players, has also entered the lab-grown diamond market, offering its own versions at a lower price point than natural stones.