Diamond giant De Beers is halting production at its flagship Venetia mine in South Africa for two years, according to BBC; this decision comes as global demand for diamonds continues to fall due to changing consumer habits, particularly in China. Prices have dropped across the industry. With increased competition from lab-grown gems that are significantly cheaper.

Industry Struggles with Demand and Competition

De Beers said it needs to cut costs and cut operations given the depressed state of the world diamond market. The Venetia mine. Located in the far north of South Africa, accounts for more than 40% of the country’s diamond production and employs over 4,000 people; the mine’s closure could have a major economic impact on the region and the broader South African economy.

Workers’ unions have previously warned against job losses in South Africa’s mining sector, which employs almost half a million people and accounts for more than 4% of national GDP. The suspension of operations at Venetia may increase pressure on the government to address employment concerns in the sector.

De Beers’ Parent Company Seeks Strategic Shift

De Beers is majority-owned by Anglo American, which is reportedly trying to sell the company and shift focus to the growing copper market, fueled by the recent AI boom. At the Venetia mine. De Beers has pledged to use the two years of downtime to make infrastructure more efficient and increase capacity, ready to reopen production once market conditions improve.

De Beers famously launched the advertising tagline ‘A Diamond is Forever’ in 1947, seeking to cement the idea that a diamond ring was an essential part of getting married. The campaign later inspired a James Bond novel and the song recorded by Shirley Bassey for the film franchise. However, consumer habits have since changed, and the industry is now facing significant challenges.

The International Diamond Consultants’ rough diamond price index has almost halved since 2022. Lab-grown diamonds have gained in popularity in recent years as consumers express ethical concerns about miners’ pay, working conditions, and environmental damage. Yet, De Beers and other established firms have also cashed in on these changes by producing their own lab-grown versions at a fraction of the price of natural diamonds.

Historical Legacy and Current Challenges

De Beers is not the first large producer to scale down operations in recent years, but it holds a unique place in the public imagination due to its long history dating back to 1871. Its founder was Cecil Rhodes, the English colonist whose forces dispossessed indigenous Africans of their land and denied them basic rights. He became a millionaire in the process and justified racial segregation, stating before Cape Town’s Parliament several years later that ‘the natives are children… they are just emerging from barbarism.’

Rhodes’ legacy in southern Africa has become a lightning rod for discussions about ‘decolonising’ institutions that continue to bear his name. This includes universities with statues of him and scholarships founded on his wealth, such as the UK’s University of Oxford, whose past Rhodes Scholars include former US President Bill Clinton and former Australian Prime Minister Malcolm Turnbull.