De Beers has taken a decision to suspend operations at its key mine in South Africa as part of its strategy to
reduce costs amid prolonged slump in the diamond market. The diamond miner said in an update that it was
also setting out a number of planned portfolio and organisational changes to ensure an efficient cost base that strengthens resilience in the near-term.
De Beers also stated that global rough diamond production is now decreasing, with rough diamond trading
conditions expected to remain challenging in the near-term due to cyclical and industry-specific factors.
Therefore, it said consistent with recent actions to improve business resilience, production at the Venetia mine
in South Africa will be paused for two years to reduce costs while also rephasing capital expenditure on its
underground project.
“This will involve critical infrastructure investment to enhance the capacity and efficiency of the mine, with the
intention to support future production growth as business and industry conditions improve,” the company said.
“De Beers is engaging with stakeholders in accordance with relevant requirements and the company’s values
as it moves through this process, and will both support impacted employees and continue to invest in its
community and Social and Labour Plan commitments,” it added.
The move will follows a decision made earlier this year to pause the Tuzo Phase 3 expansion project at the
Gahcho Kué mine in Canada.
Meanwhile, the company plans to reconfigure its global operating model to refocus and prioritise resources on the core operational businesses and reduce its central corporate cost base.
De Beers Group CEO, Al Cook, stated that the move is to ensure greater business resilience in the near-term,
while supporting long-term value creation.
“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,” he said.
“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.”
Since 2024, De Beers has been streamlining its business in line with its Origins strategy to reduce costs, divest
non-core assets and prioritise investment in activities that create the most value.
The company said significant progress has been made, with more than $100 million of annual overhead costs
removed from the business, the sale or closure of a number of non-core assets and significant capital and cost
reconfigurations to asset expansion projects.