Posted on 07/14/2026 1:18:08 PM PDT by Red Badger
De Beers: Venetia diamond mine
=======================================================================================
DE Beers is preparing to shutter South Africa’s largest diamond mine for two years, threatening thousands of jobs and removing roughly two-fifths of the country’s diamond production as the industry’s most famous company battles one of the worst downturns in its history.
The move is intended to cut costs, while production will be increased elsewhere, enough to leave its overall output guidance unchanged.
It’s an especially striking decision because Venetia, in Limpopo, is not an ageing operation being allowed to gracefully expire. And De Beers has already spent about $2.2bn converting the former open-pit mine into an underground operation intended to continue producing into the 2040s. Production at Venetia, in fact, rose 53% to 740,000 carats in the first quarter of 2026 as greater volumes of underground ore were processed.
However, “if you want to cut back supply, you close Venetia”, says James Allan, a mining consultant and former top-rated diamond analyst, who argues that it’s more than a simple ranking of which De Beers mines were most expensive.
The company’s average production cost in South Africa – where Venetia is its only operating mine – was $110 a carat in 2025, compared with $38 in Botswana, $51 in Canada and $244 in Namibia, according to figures supplied by De Beers.
In other words, while Venetia is a relatively high-cost operation, it’s not the group’s most expensive source of diamonds.
The political angle
Allan believes the ownership structure of De Beers’ operations was likely to have played an important part in the move. That’s because the Botswana mines are operated by Debswana, a 50-50 partnership between De Beers and the Botswana government, while its major Namibian operations are also run through equal partnerships with the state. Venetia is operated by De Beers Consolidated Mines, in which De Beers has a controlling interest alongside empowerment shareholder Ponahalo.
De Beers had already curtailed production in Botswana, Allan says, but any further reductions there would require negotiation with one of the company’s most important shareholders and commercial partners.
“With Venetia, they don’t have to sit down and talk to anybody other than labour. There was more pressure to keep those other mines open.”
The observation points to the political economy behind De Beers’ production decisions. Botswana owns 15% of De Beers itself as well as half of Debswana, and diamond revenues remain central to the country’s finances. Namibia is similarly invested in maintaining production through its joint ventures.
South Africa, by contrast, is likely to carry a disproportionate share of the group’s next supply reduction.
Venetia produced 2.2 million carats in 2025, representing about 10% of current De Beers’ production and about 40% of South Africa’s annual diamond output. De Beers’ own website says the mine employs about 4,400 employees and contractors, though some reports put its direct workforce closer to 3,500.
South Africa produced about 5.8 million carats in 2024. Venetia’s suspension follows the placement of Petra Diamonds’ Finsch mine into business rescue, leaving Cullinan as the country’s principal remaining large-scale kimberlite operation. The result is a sharp contraction of an industry on which South Africa’s modern mining economy was founded.
Not closing for good, just for now
For now, De Beers says it can’t yet quantify the number of jobs that would be lost because this would depend on the outcome of consultations. However, it acknowledged that “a significant number of roles” were expected to be affected.
Says Allan: “It is not like a deep-level gold mine where you are spending a fortune on pumping, hoisting and ventilation. They will have to spend some money to mothball it. They’re not shuttering it for good. They’re just saying they’re not going to be mining.”
In the meantime, De Beers said it would continue investing in “critical infrastructure” intended to increase the future capacity and efficiency of the underground operation. It also promised to maintain community programmes and its social and labour plan obligations.
However, the longer-term significance of the decision will depend on what happens to rough diamond prices and to De Beers itself during the next two years.
The global natural diamond industry has been under pressure since the end of the post-pandemic luxury boom. Weak Chinese consumer demand, excess inventories, economic uncertainty and the rapid expansion of much cheaper lab-grown diamonds have pushed rough prices down sharply.
In the first quarter of 2026, De Beers’ average realised price fell 19% to $101 a carat, while its rough diamond price index declined 17%. The group nevertheless maintained annual production guidance of between 21 million and 26 million carats.
An advertising own goal
De Beers insists there are early signs of recovery, particularly in the US market and among higher-value natural diamonds. It’s removed more than $100m in annual overhead costs since 2024, disposed of non-core assets and increased spending on marketing campaigns intended to restore the appeal of natural stones.
Allan, however, argues that De Beers and Anglo American allowed the industry’s central marketing proposition to weaken during the period in which lab-grown diamonds became a mass-market jewellery product.
“You used to see De Beers advertising for diamonds all over the place,” he tells Currency. “In the last decade, there has been nothing.”
He believes De Beers should have responded to synthetic diamonds by investing much more heavily in the emotional distinction between natural stones formed over billions of years and factory-produced alternatives.
Instead, De Beers tried to launch its own ‘Lightbox’ lab-grown jewellery range to lend legitimacy to a category that subsequently undercut natural diamond prices. It has since changed course, closing Lightbox and repositioning its synthetic-diamond subsidiary, Element Six, towards industrial uses, including semiconductors and high-performance computing.
The Venetia decision also comes at an awkward point for Anglo American CEO Duncan Wanblad, who is attempting to sell or separate the miner’s 85% stake in De Beers as part of a restructuring that will leave the mining group focused on copper, iron ore and fertiliser.
“Of course it affects the price. You are buying a company that is producing fewer diamonds,” Allan says. “The longer Anglo holds on to it, the less they are going to get for it. That would appear to be what is playing out.”
De Beers’ official position is that Venetia retains a long future and will be restarted when market conditions improve. The investment continuing during the pause provides some support for that assertion.
Still, for Venetia to restart on schedule will depend not simply on engineering work underground, but on whether a new owner of De Beers can restore demand, rebuild the natural-diamond story and persuade consumers that rarity is worth paying for.
This article was first published on Currency. Currency and Miningmx are part of the Financial Mail Group.
Dear FRiends,
We need your continuing support to keep FR funded. Your donations are our sole source of funding. No sugar daddies, no advertisers, no paid memberships, no commercial sales, no gimmicks, no tax subsidies. No spam, no pop-ups, no ad trackers.
If you enjoy using FR and agree it's a worthwhile endeavor, please consider making a contribution today:
Click here: to donate by Credit Card
Or here: to donate by PayPal
Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794
Thank you very much and God bless you,
Jim
Occam's razor.
Diamonds are really rare and now that man made diamonds can fill the void much cheaper for industrial use, the cost will keep coming down.
That is diamonds are NOT really rare.
More interested in their expensive coffee and subscription habits than in buying rocks?
Probably for the same reason Da Bears left Chicago. Not worth it.
Gem-quality diamonds are as common as pearls. If it weren’t for deBeers strangle hold on supply they would be a relatively inexpensive jewelry item. Closing the mine is, at least in part, another move to limit availability.
A few years ago the Russians developed a very product mine yielding mostly <2 carat stones. DeBeers bought them all.
I used to own part of an operation that occasionally bought diamonds from some of De Beers direct customers. It was either “double keystone” or “triple keystone.” That is buying level as set by De Beers. Tripple keystone is third level below De Beers and essentially a wholesale level of which there are multiples. I sat in Kraus and Gross offices in the diamond district in NY chatting with a man dressed as a Catholic priest. He was a Jew who used the priest disguise to smuggle diamonds. (Hilarious story about having to give last rights to a guy who dropped dead in a train station in Europe.)
It is common knowledge in the diamond business that the only reason diamonds have value is because De Beers controls the quantity available. They are common as dirt. A couple of decades ago the Israelis decided they’d go into business on their own and De Beers crushed them. A couple of mines were running in South America without the De Beer’s sanction. De Beers bribed the neighboring military to kill all the miners. De Beers had warned the miners the simply weren’t allowed to mine. Period. When they did it anyway, De Beers acted. (Story per sitting in the office in NY.)
The Soviets started flooding the market with diamonds and De Beers explained what was going to happen to the price and then gave the Soviets a deal so the Soviet diamonds would run through De Beers keeping the price high.
The problem De Beers will have is the diamonds getting onto the market through back channels because closing this mine and keeping it closed are two different issues. Most likely, De Beers will use Russian mercenaries to “enforce” the closure. That’s what they’ve done in the past.
Countries that export diamonds through De Beers also use their police to enforce the exclusive agreement. That’s the “soft” way of handling the problem.
If you have to laser engrave a lab stone to distinguish it from natural.....
Half the cost, usually a lot more fire and other advantages make the myth of natural diamond value even more of a scam. Diamonds, an emotional promotion.
Unless you just want to blow the price of a very expensive new vehicle I have seen lab rings that put natural ones to shame. After all, it is just for show.
Probably for the same reason Da Bears left Chicago
Heh heh 😅 😉
Actually diamonds aren’t rare at all. DeBeers just mines them then stores them in vaults and doles them out to keep the price up. I wouldn’t waste $10 on a diamond.
My inlaws bought a $20 000 diamond ring and years later took it back to the store still with the price tag. They said we just sell diamonds and wouldn’t buy it back at any price. I’m not sure what happened to it but I could’ve bought it for a pittance but what would I do with it.
“Diamonds, that will shut her up”
Apparently the Chinese manufacture perfect diamonds much cheaper than what can be mined. The price of diamonds has collapsed and there is nothing De Beers can do about it.
https://youtu.be/qf78SpQj37o?si=7bBabGXqzKDiD_MU
AI
Lab-grown diamonds have significantly disrupted the global diamond market, challenging the traditional pricing and exclusivity of natural diamonds. Initially driven by affordability, ethical concerns, and technological advancements that allow production in weeks rather than millennia, synthetic stones now account for approximately 20% of the total diamond market. This surge in supply has forced major players like De Beers to invest heavily in detection technology and pivot their strategies, with some natural diamond prices dropping by as much as 40% due to falling demand.
However, the threat may be peaking as lab-grown diamond prices continue to crash—potentially declining another 50-80%—due to oversupply from producers in China and India. Industry leaders, including the World Diamond Council, note that this price collapse is undermining consumer confidence in synthetic gems, leading to a shift in preferences back toward natural stones. While lab-grown diamonds have successfully democratized access to diamond jewelry, their ubiquity is eroding their status as luxury items, potentially bifurcating the market where only exceptional, verified natural diamonds retain investment value.
If De Beers released all the diamonds in its possession, diamonds would be worthless.
One of the local diamond stores has tons of commercials promoting “natural diamonds”. I’m waiting for “if he gives you a synthetic diamond engagement ring, he’s going to be a wife beater”.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.