De Beers is set to suspend production at South Africa’s Venetia diamond mine for two years, putting approximately 3,500 jobs at risk and reducing output from an operation that accounts for about 10 per cent of De Beers’ production and roughly 40 per cent of South Africa’s diamond output.
The suspension comes after rough-diamond prices fell by approximately 50 per cent from their 2022 peak. Weaker Chinese demand has affected the market, while the continued expansion of laboratory-grown diamonds has placed additional pressure on prices in lower-value segments. De Beers has already taken steps to reduce its cost base, cutting approximately $100 million in annual overheads since the beginning of 2024. The Venetia decision represents a further reduction in operating activity as the company responds to weak market conditions.
Venetia investment faces prolonged production halt
The Venetia mine has received approximately $2.2 billion of investment in underground development and had been expected to remain operational until around 2045. The planned two-year suspension comes relatively soon after that major capital programme. Production will therefore be paused while the mine retains its longer-term operating potential, rather than continuing at full utilisation under current diamond-market conditions.
The scale of the workforce affected makes Venetia one of the most significant operational consequences of the downturn for De Beers. The suspension will also reduce South Africa’s domestic diamond production base, given the mine’s contribution of approximately 40 per cent to national output.
Diamond weakness increases pressure on De Beers disposal
The production halt adds another complication to Anglo American’s planned disposal of De Beers. The mining group recorded an additional $2.3 billion impairment against its diamond business in February 2026. That charge represented the third consecutive writedown of more than $1 billion for the business. The proposed sale must now be assessed against lower rough-diamond prices, reduced operating capacity at Venetia and uncertainty surrounding the recovery of Chinese jewellery demand.
The deterioration in market conditions has changed the financial backdrop for the disposal. A potential buyer would be assessing De Beers while the business faces weaker diamond pricing and a temporary suspension at a major producing operation.
Supply reduction comes amid synthetic-diamond competition
Removing Venetia’s production could contribute to tighter supply, but the suspension alone cannot eliminate existing inventory pressures or reverse competition from laboratory-grown diamonds. The decision instead reduces operating expenditure during a period of depressed diamond prices while retaining the longer-term value of the mine. The resulting reduction in production does not, by itself, provide a mechanism for restoring prices to their previous levels.
For Anglo American, the suspension leaves the disposal of De Beers exposed to the continuing weakness in the diamond market. The combination of lower prices, suspended production capacity and uncertain Chinese jewellery demand could affect both the valuation achievable in a sale and the timing of the transaction.
