Lesotho’s largest diamond mine, Letšeng, has laid off 240 workers, representing a fifth of its workforce, in response to a prolonged slump in global diamond prices. This comes after the diamond mine posted on Thursday that it had met its production target for the first six months of the year, despite global uncertainties and demand reductions.
The parent company, Gem Diamonds, announced on Thursday, the job cuts as part of a broader effort to reduce costs and protect shareholder value amidst weak demand and an uncertain global economic environment.
Clifford Elphick, Chief Executive Officer of Gem Diamonds, said it was a necessary measure to lay off 240 workers as to protect the company from further unsustainable losses.
“H1 2025 production targets were achieved, however, revenue decreased significantly. In response, key decisions to adapt the mine plan to reduce costs, necessitated the unfortunate retrenchment of 240 employees at Letseng. While deeply regrettable, these actions position Letseng to operate sustainable” He said in a statement, seen by Thinkbusiness Africa.
Diamonds are a critical component of the South African nation’s economy, contributing up to 10% of its GDP and serving as a major export commodity alongside textiles and clothing.
The layoffs at the Letšeng mine, which is renowned for producing some of the world’s largest and most valuable gems, highlight the severe impact of the current market conditions on Lesotho’s economic stability.
According to Gem Diamonds, the decision to scale back operations and cut jobs was driven by “sustained pricing pressure, softer demand in key markets, ongoing macroeconomic and geopolitical uncertainty, and tariff uncertainties.”
The company reported a half-year Revenue of $45.4 million a significant decrease from $78.0 million
Recorded the previous year.
Also, loss of $11.7 million, a stark contrast to the $2.1 million profit from the previous year, with revenue plummeting by 42%. Shareholders also took a Loss of 8.4 US cents per share.
The difficult trading conditions are not limited to Letšeng. Other mines in Lesotho are also facing similar challenges, with reports of layoffs and temporary closures at sites like Mothae Diamond Mine, which recently announced it would be retrenching all employees and transitioning to a care and maintenance program.
The downturn in the diamond sector is further compounded by a weakened US dollar and pressure from the growing market for lab-grown diamonds. These factors have created a difficult environment for natural diamond producers, forcing companies to implement drastic measures to conserve cash and adapt to the new market realities.
