JOHANNESBURG – Mining company De Beers announced on Monday it will pause production at South Africa’s largest diamond mine for two years to reduce costs as trading conditions remain challenging.

The Venetia mine, which lies near the borders with Botswana and Zimbabwe, accounts for more than 40% of the country’s annual diamond production and is the largest producer by value. It employs about 4 400 staff.

De Beers, majority-owned by British mining giant Anglo American, said “rough diamond trading conditions are expected to remain challenging in the near-term” with production decreasing and several producers closing mines.

“Consistent with recent actions to improve business resilience, De Beers intends to pause production at the Venetia mine in South Africa for two years to reduce costs while also rephasing capital expenditure on its underground project,” the company said in a statement.

The natural diamond market faces intense pressure from laboratory-grown gems, prompting Anglo American to seek to offload its stake in De Beers.

The De Beers group has run Venetia for more than 30 years. In 2012, the firm started digging beneath the surface, seeking to reach gems at a depth of more than 1 000 metre. De Beers previously said the facility would produce about four million carats of diamonds annually.

The action at the Venetia mine follows a decision earlier this year to pause the Tuzo Phase 3 expansion project at the Gahcho Kué mine in Canada.

Chief executive Al Cook said the company was making a number of changes to ensure greater business resilience while supporting long-term value creation.

“We recognise the protracted challenging conditions as the diamond industry evolves, though we are encouraged by signs of consumer demand growth in the US and beyond, particularly in higher quality diamonds,” he said.

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