Diamonds No Longer De Beers Best Friend

Diamond behemoth De Beers has announced that it is shutting down all its mines, something that hasn’t happened since the Great Depression.

From the Telegraph:

Debswana, a joint venture between De Beers, the company founded by Cecil Rhodes, and the government of Botswana, produces a fifth of all the world’s diamonds – around half of de Beers’ global output – from four open-cast mines in the arid country.
Work will be suspended for the rest of the year at two of them, Damtshaa and Orapa No 2, while Orapa No 1 and Jwaneng, the planet’s single most valuable diamond mine, will stop activities until at least mid-April.

Production at the mines had already stopped in December, when the workers went on their Christmas break, and when they returned only care and maintenance was being carried out. Now several thousand of the firm’s 5,510 permanent employees will be sent home on extended leave on full pay from Tuesday, while 580 jobs will be slashed at the two mines facing long-term closure.

The shutdowns will be a crushing blow to the economy of Botswana, which has used its diamond wealth as the bedrock of one of sub-Saharan Africa’s most successful and stable countries. Diamonds account for 70 per cent of its exports and 30 per cent of government revenues.

Gem diamond sales over Christmas in America, the world’s biggest market for the rocks, were down around 25 per cent on last year.

“There won’t be any carats produced by Debswana,” said Lynette Gould, a spokeswoman for De Beers. The last time the firm completely shut down production at any of its mines was in the 1930s, during the Great Depression, she added.

Analysts said the move was “a major chunk of worldwide production”, but would bring demand and supply more into line.