Lesotho’s largest diamond mine, Letseng, has laid off 240 workers, representing 20% of its workforce, as it struggles with persistently weak diamond prices caused by subdued demand and global economic uncertainty, parent company Gem Diamonds announced on Thursday, according to Reuters.
Diamonds remain a crucial pillar of Lesotho’s economy, contributing up to 10% of GDP and employing thousands in the country of just over two million people.
Alongside textiles and clothing, they form the backbone of the nation’s exports.
The Letseng mine, renowned for producing some of the world’s largest and most valuable stones, including the 910-carat “Lesotho Legend,” has revised its mine plan and reduced jobs in a bid to cut costs.
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“Sustained pricing pressure, softer demand in key markets, ongoing macroeconomic and geopolitical uncertainty, and tariff uncertainties in respect of India, combine to create difficult trading conditions,” said Gem Diamonds CEO Clifford Elphick.
The company reported a half-year loss of $11.7 million, compared with a $2.1 million profit in the same period last year, after revenue fell 42% due to weaker prices.
It also booked a $10.7 million impairment on the value of Letseng, reflecting the challenging market.
During the six months to June 30, the company achieved an average selling price of $1,008 per carat, down 26% year-on-year, with production totaling 47,125 carats compared with 55,873 carats in the same period last year.
According to the Zimnisky Global Rough Diamond Price Index, diamond prices have fallen about 35% since peaking in early 2022, driven by shifting consumer preferences and the growing popularity of lab-grown alternatives.
In response, miners worldwide have scaled back output, reduced jobs, and suspended projects.
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Image Credit: Reuters
