Gem Diamonds Lays Off 240 Workers at Letseng Mine Amid Falling Prices and U.S. Tariff Pressures
Gem Diamonds is laying off 240 workers—about one-fifth of its workforce—at the world-famous Letseng mine, in a move that underscores the mounting strain on Lesotho’s diamond-dependent economy.
The company reported a half-year loss of $11.7 million, a sharp reversal from a $2.1 million profit a year earlier, after revenue plunged 42% due to weak global demand and sliding diamond prices.
Letseng, renowned for producing exceptional stones such as the 910-carat “Lesotho Legend,” has been forced to scale back operations and revise its mine plan.
Gem Diamonds CEO Clifford Elphick cited “sustained pricing pressure, softer demand in key markets, ongoing macroeconomic and geopolitical uncertainty, and tariff uncertainties in respect of India” as key reasons for the cuts.
According to Reuters, the company booked a $10.7 million impairment on Letseng and reported an average diamond price of $1,008 per carat in the first half of 2024—a 26% drop compared to the same period last year. Production also slipped to 47,125 carats, down from 55,873 in the first half of 2023.
The Zimnisky Global Rough Diamond Price Index shows that rough diamond prices have fallen nearly 35% since early 2022, pressured by shifting consumer preferences and the growing popularity of lab-grown alternatives.
Lesotho’s trade with India, its third-largest diamond market after Belgium and the UAE, has been particularly hard hit. In 2023, the country exported $85.8 million worth of rough diamonds to India, but rising tariffs and global trade tensions are now discouraging Indian firms from importing Lesotho’s gems.
Adding to the pressure, U.S. President Donald Trump earlier this year imposed sweeping tariffs on Lesotho’s exports—initially as high as 50% before being partially rolled back. A 10% levy on U.S.-bound goods remains in place, creating uncertainty for exporters.
National Economic Impact
For Lesotho, which depends heavily on diamonds and textiles for export revenue, the downturn has far-reaching consequences. Lower diamond earnings mean reduced foreign exchange inflows, weaker trade balances, and mounting job losses.
The Lesotho government has declared a national state of disaster, citing rising unemployment and warning of worsening social pressures, particularly for the country’s youth.
With diamonds and textiles as its economic backbone, Lesotho now faces the dual challenge of collapsing gem revenues and escalating trade frictions—exposing its deep vulnerability to global economic shocks.
