South Africa: Hundreds of Lesotho diamond mining jobs to be axed following US tariff threats
The livelihoods of hundreds of miners at Lesotho's largest diamond mine, Letšeng Diamonds, are at risk as the company implements 'cost-saving measures'.
In a meeting with some of its 1,225 staff on Thursday, the company announced it would be retrenching between 250 and 300 permanent and contracted workers. This, it said, was as a result of a steady slump in global diamond prices, a weakening US dollar, and uncertainty over US trade tariffs.
Spokesperson for the mine, Tšepo Hlojeng, confirmed to GroundUp that the company had started consultations with staff. 'It is our plan to have all activities related to the implementation of the current scenario completed by the end of August 2025.'
Hlojeng said that employee benefits will be paid out to the affected employees.
While the news came as a shock to many of Letšeng's miners, the company, in a statement last week, said, 'While the company has met its production targets, it has not been immune to the sustained pressure on rough diamond prices and adverse exchange rate movements.'
The mine, situated high in the Maluti Mountains, will continue processing at existing levels. But waste mining in both the main and satellite pits will be drastically reduced for the next 12 months, said the company.
'This scale-back is part of a short-term strategy aimed at conserving cash and protecting the long-term viability of operations.'
CEO of Letšeng mine, Motooane Thinyane has reportedly estimated that the mine employed about 1,500 people in 2023, both directly and through contractors. Of these workers, 199 lost their jobs in November when the mine terminated its services agreement with one of its key contractors, Minopex Lesotho.
Letšeng Diamonds is jointly owned by Gem Diamonds Limited and the government of Lesotho. It is widely regarded as one of the country's most strategic economic assets. The mine is a key contributor to government revenue, foreign exchange earnings, and employment.
While expressing confidence in its long-term recovery, the mine admitted that current market conditions had left it with few choices. 'The measures being implemented will position the company for a strong recovery when market conditions improve,' the statement concluded.
Although the mine has not disclosed specific figures on how its bottom line has been affected yet, financial filings from its majority shareholder (70%), Gem Diamonds Limited, on the London Stock Exchange provides a clearer picture.
In its Full Year Results for the period ending 31 December 2024, Gem Diamonds reported revenue of $154.2m, an annual profit of $8.1m, and an attributable profit of $2.9m. This is a sharp improvement from its 2023 performance, when it recorded $140.3m in revenue, a much lower annual profit of $1.6m, and an attributable loss of $2.1m.
The positive momentum continued into early 2025. Between 1 January and 31 March, the mine achieved a record price of $26,441 per carat for a 67.50-carat white diamond. Two stones sold for more than $1m each, generating a combined revenue of $3.5m.
But this trend was short-lived.
In April, the US imposed 50% tariffs on Lesotho. Though these were later temporarily reduced to 10% with an additional 40% suspended until 1 August, its effects are already impacting the bottom line in the diamond trade.
In its April market update, Gem Diamonds noted that by the first quarter of 2025, the company's performance had begun to decline. It sold 20,470 carats, down from 26,356 in the last quarter of 2024, a 22% decrease. Revenues fell to $21.6m, compared to about $32m previously. The mine posted a quarterly loss of $10.6m.
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