Online Reporter
Mass layoffs sweeping through Lesotho’s diamond sector have laid bare the country’s economic vulnerability as global trade tensions, particularly the escalating rift with the United States, intensify pressure on exports and threaten the livelihoods of thousands who depend on the industry.
Gem Diamonds’ decision to lay off 240 workers, representing one-fifth of the staff at its flagship Letseng mine, has highlighted the mounting strain on Lesotho’s diamond-dependent economy, already battered by US tariff uncertainty and weak global demand.
On Thursday, the company reported a half-year loss of US$11,7 million, a sharp reversal from a US$2,1 million profit a year earlier, as revenue plunged 42 percent amid falling diamond prices..
Letseng, renowned for producing some of the world’s most valuable stones including the 910-carat “Lesotho Legend,” has been forced to revise its mine plan and trim operations in response to weakening market conditions.
Gem Diamonds CEO Clifford Elphick attributed the cuts to “sustained pricing pressure, softer demand in key markets, ongoing macroeconomic and geopolitical uncertainty, and tariff uncertainties in respect of India.”
Reuters reports that the company booked a US$10,7 million impairment on Letseng and reported an average diamond price of US$1 008 per carat in the first half of 2024, a 26 percent decline compared to the same period last year.
Production also fell to 47,125 carats, down from 55,873 in the same period of 2023.
According to the Zimnisky Global Rough Diamond Price Index, rough diamond prices have plunged nearly 35 percent since early 2022, driven by changing consumer preferences and the growing appeal of lab-grown alternatives.
The decline in global diamond prices has been particularly damaging for Lesotho’s trade with India, one of its key buyers. —Business Insider Africa
