The National Union of Mineworkers (NUM) has condemned Petra Diamonds for its decision to lay off over 200 workers as part of a cost-cutting strategy.
This decision comes in the wake of an extended downturn in the diamond industry, which has forced several companies, including Petra, to make difficult decisions regarding staffing, production, and pricing forecasts.
The layoffs specifically target employees at Petra’s Cullinan and Finsch mines in South Africa. Petra initially announced the layoffs in December 2023, along with a reduction in its rough-diamond price forecast.
In January 2024, the company further lowered its pricing guidance and sold its Williamson mine in Tanzania to address ongoing liquidity challenges.
NUM has expressed strong opposition to Petra’s decision, calling it “unacceptable” and warning that it will have devastating consequences for the affected employees, their families, and the wider community.
In a statement released Sunday, NUM further criticized the trend of mining companies replacing permanent workers with contract labor, calling it “capitalist barbarism.”
When questioned by NUM, Petra explained that the diamond industry is currently experiencing its longest slump in over 30 years, driven by global economic pressures and competition from the rise of lab-grown diamonds.
Masibulele Naki, NUM’s chief negotiator for the diamond sector, stressed that for South Africa’s economy to meet its projected annual growth targets, the focus should be on job creation, not job destruction.
“While we acknowledge the global challenges facing the diamond market, it is not justifiable to eliminate jobs in an already struggling sector,” Naki said.
Petra Diamonds is not alone in facing these financial pressures. Anglo American recently announced a 10-million-carat reduction in De Beers’ production plan and indicated potential further cuts to its valuation.
In December, Gemfields revealed it would suspend some of its operations and consider selling certain assets to cut costs.
Additionally, Lucapa Diamond Company saw a dramatic 71% drop in revenue due to an 80% decrease in average diamond prices, while Mountain Province reported a 20% revenue decline for 2024, largely due to weak rough diamond prices.
The ongoing challenges within the diamond industry underscore the pressures mining companies face as they attempt to navigate an increasingly volatile market.
