Gem Diamonds has revised the mine plan at its Letšeng operation in Lesotho, shortening the projected life of the mine from 2039 to 2035. The change follows cost-saving measures taken in response to ongoing weakness in rough diamond demand and pricing.
Mine Plan Changes and Workforce Reduction
The revision to the mine’s lifespan results from a decision to reduce waste mining activities in the main pipe’s cut 4 area. This limits access to deeper sections of the orebody and is intended to reduce operating costs. The company stated that the life of mine could be extended again in the future if market conditions improve.
As part of its cost reduction strategy, Gem Diamonds has laid off 240 employees at Letšeng. Other measures included salary reductions and a US$10.7 million asset write-down.
CEO Clifford Elphick said, “The industry continues to face significant challenges. Sustained pricing pressure, softer demand in key markets, ongoing macroeconomic and geopolitical uncertainty, and tariff uncertainties in respect of India, combine to create difficult trading conditions.
“H1 2025 production targets were achieved, however, revenue decreased significantly. In response, key decisions to adapt the mine plan to reduce costs necessitated the unfortunate retrenchment of 240 employees at Letšeng. While deeply regrettable, these actions position Letšeng to operate sustainably.”
Financial Performance and Market Conditions
In the six months to 30 June 2025, revenue fell 42% year-on-year to US$45.4 million. The decline was driven by both lower sales volumes and weaker average prices. Sales volumes fell 22% to 44,360 carats, and the average price realised per carat declined 26% to US$1,008, down from US$1,366 during the same period in 2024.
The company posted a net loss of US$11.7 million, compared with a profit of US$2.1 million in the first half of 2024.
Production and Recovery Figures
Output at Letšeng dropped 16% to 47,125 carats for the reporting period. The decrease was attributed to a higher proportion of lower-grade ore, which made up 68% of production. Four rough diamonds exceeding 100 carats were recovered during the half-year, compared to eight during the same period in 2024. The highest price achieved for a white diamond was US$26,441 per carat for a 67.50-carat stone. Since the end of June, the company has since recovered three further stones over 100 carats.
Implications for the Sector
The developments at Letšeng highlight the impact of sustained market pressures on mining operations. Softer demand, pricing volatility and uncertainty around international trade tariffs, particularly in India, are prompting operational adjustments across the sector. This may affect the availability of large stones and influence price trends in the short term.
