Lesotho’s largest diamond mine reduces its workforce by 20% due to ongoing price declines

The parent firm Gem Diamonds (GEMD.L) announced on Thursday that Letseng, the largest diamond mine in Lesotho, has laid off 240 employees, or a fifth of its workforce, as it struggles with consistently low gem prices brought on by sluggish demand and an unstable global economic environment.

With the diamond industry accounting for up to 10% of the nation’s GDP and employing thousands of people in a population of just over 2 million, diamonds are essential to Lesotho’s economy. Together with apparel and textiles, diamonds are Lesotho’s main export.

The Letseng mine, which yields some of the biggest and most precious gems in the world, including the 910-carat “Lesotho Legend,” has reportedly changed its mine plan and reduced employment in order to save money, according to Gem Diamonds.

Gem Diamonds CEO Clifford Elphick said in a statement that “continuing macroeconomic and geopolitical uncertainty, softer demand in key markets, sustained pricing pressure, and tariff uncertainties in respect of India, combine to create difficult trading conditions.”

Gem Diamonds announced a half-year loss of $11.7 million on Thursday, down 42% from a $2.1 million profit the previous year due to lower prices.

Because diamond prices were low, Letseng’s worth was impaired by $10.7 million.

In the six months ending June 30, the company’s average price per carat was $1,008, which was 26% less than the previous year. In comparison to the same period last year, when it produced 55,873 carats, its half-year production was 47,125 carats.

The Zimnisky Global Rough Diamond Price Index indicates that the rise of lab-grown gems and shifting customer preferences have caused diamond prices to drop almost 35% from their peak in early 2022.

In response, miners have stopped projects, reduced output, and eliminated employment.