Why Has De Beers Halted Work at Its Flagship South African Diamond Mine?

After a century and a half of digging beneath Limpopo, the company that once controlled 90% of the world’s rough diamond trade has gone quiet at the mine that built its reputation, a retreat driven by cheap lab-grown stones, a collapsing balance sheet and a corporate parent racing for the exit

JOHANNESBURG – For more than three decades, the machinery at Venetia rarely stopped. Diggers pulled diamond ore from an open pit and, more recently, from tunnels bored deep beneath the bush of South Africa’s Limpopo province, feeding the country’s largest diamond mine and, with it, roughly forty percent of South Africa’s total diamond output.

On July 13, De Beers told workers that was about to change. The company said it intended to pause production at Venetia for two years, idling its only mine in South Africa and putting more than a thousand jobs at risk.

The announcement landed hard in a country where mining still underpins entire towns and a meaningful share of gross domestic product, but its roots lie far from Limpopo, in a global diamond market that has come apart at the seams over the past five years.

De Beers, once the most powerful company in the history of the diamond trade, has become the most visible casualty of an industry being remade by cheaper synthetic stones, softer demand from China and a corporate parent eager to walk away from the business altogether.

WHAT DE BEERS SAID

In a statement announcing the pause, De Beers said it needed to reduce costs while also rephasing capital expenditure on its underground project, and warned that trading conditions were expected to remain challenging in the near term as producers worldwide cut output and the pool of diamond buyers keeps shrinking.

The company framed the decision as consistent with recent actions to improve business resilience, a reference to a broader retrenchment already underway across its operations, including an earlier decision to suspend an expansion project at its Gahcho Kue mine in Canada.

Venetia is not a marginal asset. The mine, which sits near South Africa’s borders with Botswana and Zimbabwe, has been run by De Beers for more than thirty years and typically supplies close to a tenth of the group’s total output worldwide.

It is also the site of a 2.3 billion dollar underground expansion that began in 2015, a project De Beers now says it needs to slow rather than accelerate, even though the deposit had been expected to keep yielding rough diamonds into the 2040s.

THE NUMBERS BEHIND THE DECISION

De Beers has not been quiet about the scale of its troubles. Its majority owner, Anglo American, has taken three separate writedowns on the diamond unit since 2023, totaling 6.8 billion dollars, and De Beers’ own underlying earnings loss widened sharply, from 25 million dollars in 2024 to 511 million dollars in 2025. Rough diamond production fell 12 percent last year to 21.7 million carats as the company tried to bring supply in line with a shrunken pool of buyers, and De Beers has repeatedly cut the prices at which it sells rough stones to its sightholders, the roughly eighty companies licensed to buy directly from the group.

THE DIAMOND MARKET, BY THE NUMBERS

De Beers underlying EBITDA loss, 2025	$511 million (up from $25 million in 2024)
Anglo American writedowns on De Beers, 2023-2026	$6.8 billion
Venetia jobs at risk	1,214 (1,134 at the mine, 80 at DBSSSA)
Venetia share of South African diamond output	About 40 percent
Natural 1-carat diamond price, 2026	~$4,200, down from ~$6,000 in 2021
Lab-grown 1-carat diamond price, 2026	~$750 to $1,000, down ~74 percent since 2020

WHY NOW: THE LAB-GROWN COLLISION

The larger force reshaping Venetia’s fate sits far outside Limpopo, inside factories that grow diamonds under heat and pressure in a matter of weeks rather than the billion years nature takes. A decade ago, a lab-grown one-carat stone cost only modestly less than its mined equivalent.

That gap has since become a chasm. Wholesale prices for lab-grown diamonds have fallen by roughly three-quarters since 2020, and synthetic stones now account for close to 45 percent of engagement ring purchases in the United States, up from about 5 percent in 2019, according to TheStreet.

De Beers tried, for a time, to compete on those terms itself, selling a lab-grown jewelry line called Lightbox at a fraction of natural diamond prices. Under chief executive Al Cook, who joined the company in 2023 from the oil and gas industry rather than the diamond trade, De Beers reversed course, shut down Lightbox and bet instead on convincing shoppers that mined stones carry an emotional and provenance based premium that a factory-grown diamond cannot replicate.

So far that bet has not been enough to offset a natural diamond price that has itself fallen 25 to 30 percent from its 2021 peak, squeezed by cheaper synthetic competition on one side and weaker luxury demand out of China on the other.

Some market analysts argue the natural diamond trade is not disappearing so much as splitting in two. Large, rare stones above three carats have held their value comparatively well, even posting quarterly gains this year, while the everyday, commercial grade diamonds that once anchored mass market engagement rings have been hit hardest by lab-grown competition. Venetia produces largely commercial grade output, which helps explain why De Beers chose to pause that mine specifically rather than spread cuts evenly across its portfolio in Botswana, Namibia and Canada.

A PARENT RACING FOR THE EXIT

Layered on top of the market’s troubles is a corporate one. Anglo American, which owns the large majority of De Beers, has spent more than a year trying to sell or spin off the diamond business entirely as it refocuses its portfolio on copper and other metals tied to the energy transition.

Anglo’s chief executive, Duncan Wanblad, has said repeatedly that the company remains committed to divesting De Beers but has yet to name a buyer or a closing date, even as reported bidders have included sovereign and consortium interests tied to Botswana, Qatar and other parties, per Miningmx and National Jeweler.

Pausing production at Venetia fits a pattern Anglo has followed elsewhere in its portfolio, trimming costs and shrinking the balance sheet of assets it plans to sell rather than running them at full output through a prolonged downturn.

Whether that calculation makes De Beers more attractive to a future buyer, or simply underscores how far the company’s fortunes have fallen, is a question the industry has not settled. Botswana, whose government holds a stake in De Beers and controls a large share of its production through a joint venture, has separately pushed for greater ownership of the business, adding a layer of political complexity to any eventual sale.

Anglo’s other recent divestments offer a cautionary note about how messy these processes can get. An earlier agreement to sell the company’s steelmaking coal operations to the American miner Peabody Energy fell apart after a fire closed one of the mines involved, forcing Anglo back to the negotiating table on that deal even as it kept pushing forward on De Beers. Analysts tracking the diamond sale have pointed to that episode as evidence that operational disruptions, the kind a two year production halt is designed to avoid, can derail even far advanced transactions.

THE UNION’S CASE

Workers largely learned of the decision through headlines. The National Union of Mineworkers, the largest labor organization at Venetia, said De Beers issued a Section 189A notice, the formal opening of South Africa’s legal process for large scale layoffs, without adequately consulting the union beforehand. NUM said the move threatens 1,134 permanent jobs at the mine itself and 80 more at De Beers Sightholder Sales South Africa, the group’s diamond sorting operation in Johannesburg, according to a union statement.

Masibulele Naki, the union’s chief negotiator for the diamond sector, argued that the company was treating a long building, structural crisis as a sudden emergency in order to justify job cuts it should instead be trying to avoid.

Workers cannot be treated as disposable tools that are discarded whenever companies face economic pressures.
Masibulele Naki, National Union of Mineworkers

NUM has urged De Beers to consider retraining workers, temporary job preservation measures, cuts to non essential spending and a review of executive pay before any retrenchments proceed, and it has called on South Africa’s mineral resources and labor ministries to intervene directly in the dispute.

A REGION BUILT AROUND ONE MINE

The stakes extend well beyond De Beers’ own balance sheet. South Africa’s mining sector employs almost half a million people and accounts for more than 4 percent of national output, and Limpopo’s local economy around Venetia has grown up around the mine’s payroll, its contractors and the businesses that serve them. A two year freeze does not just remove miners from underground shifts, it ripples through trucking firms, caterers, small retailers and the municipal tax base of a rural province with few comparable employers waiting to absorb displaced workers.

De Beers has also built its entire commercial model around controlled scarcity, selling rough stones roughly ten times a year through invitation only events known as sights, where about eighty licensed buyers called sightholders purchase pre-selected parcels at prices the company sets.

That system, in place for most of a century, depends on De Beers projecting stability and discipline to buyers even as it cuts output elsewhere. Sightholders have already absorbed repeated price reductions this year, and any further volatility around Venetia’s status could complicate a distribution model built on predictability.

A COLONIAL ERA COMPANY CONFRONTS A NEW KIND OF DECLINE

De Beers occupies an outsized place in South Africa’s mining history, and in the country’s unresolved reckoning with it. Founded in 1888 by the British businessman Cecil Rhodes, the company built a near monopoly over the world’s rough diamond supply that lasted, in various forms, for more than a century, controlling as much as 85 percent of global distribution at its height. Rhodes’ fortune was built in part on the dispossession of land from Indigenous South Africans, a history that has made both the company and Rhodes’ name a recurring subject in debates over decolonizing institutions across southern Africa.

That history gives the Venetia pause an added charge locally, even though the company frames its decision in strictly financial terms. De Beers is far from alone in pulling back. Rough diamond production is falling industry wide as several producers close or idle mines, and De Beers’ Russian rival Alrosa has forecast a 14 percent drop in its own 2026 output as it too confronts a smaller, pickier pool of buyers.

WHAT HAPPENS NEXT

De Beers says the Venetia pause will let it redirect spending toward finishing the mine’s underground expansion, with production expected to resume once market conditions and the expansion timeline align. But the company is entering that two year window without knowing who will own it by the time work restarts. Anglo American has said only that it expects to provide an update on the sale process sometime in 2026, with earlier reporting pointing to a possible deal closing by the end of the year.

For Venetia’s workers, the more immediate test plays out over the coming weeks, as NUM and De Beers move through the Section 189A consultation process required before any retrenchment can become final. For the diamond industry more broadly, Venetia has become a proxy for a larger question, whether a natural diamond, mined at real human and environmental cost, can still command a lasting price premium over a chemically identical stone grown in a factory in a fraction of the time.

De Beers spent a century convincing the world that diamonds were forever. It is now trying to convince the world, and perhaps itself, that people still want to pay for that story.

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