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Lesotho's largest diamond mine reduces 20% of its workforce due to price slump

Letseng's largest diamond mine in Lesotho has cut 240 employees, or a fifth, of its workforce. The company is struggling with low gem prices, due to a weak global economy and persistently low demand.

Lesotho is a country with a population of just under 2 million, and diamonds are a vital part of the economy. The sector contributes up to 10% to the GDP of the nation. Lesotho exports diamonds, textiles and clothes as its main commodities.

Gem Diamonds announced that its Letseng Mine, which produces the largest and most valuable gemstones in the world such as the "Lesotho Legend" of 910 carats, had revised its plan and reduced jobs to cut costs.

In a recent statement, Gem Diamonds CEO Clifford Elphick stated that "sustained price pressure, softer demands in key markets and ongoing macroeconomic and geographic uncertainty combined with tariff uncertainties regarding India create difficult trading conditions."

Gem Diamonds reported a loss of $11.7m for the first half of this year, down from a profit of $2.1m a year ago. Revenues fell by 42% due to lower prices.

The weak diamond price caused a depreciation of $10.7 million on Letseng.

In the six-month period ending June 30, the company realized an average price per carat of $1,008 – 26% less than last year. The company's half-year output was 47,125, compared with 55,873 during the same time last year.

According to Zimnisky's Global Rough Diamond price Index, diamond prices have dropped by about 35% since early 2022 due to changes in consumer preferences and an increase in lab-grown gemstones.

The miners responded by reducing output, cutting positions and stopping projects.

(source: Reuters)