Petra Diamonds will cut around 468 jobs at its Cullinan and Finsch mines in South Africa, as part of a restructuring driven by operational and market-related pressures according to The National Union of Mineworkers (NUM), which represents employees at both sites.
Operational and Market Pressures
The union stated that Petra cited weak global diamond market conditions, underperformance at the mines, upcoming debt refinancing, and the need to reduce operating costs as reasons for the layoffs.
The NUM alleges that Petra plans to replace many of the affected permanent roles with contract labour, which the union claims is a cost-cutting measure.
The NUM criticised the decision, stating:
“The NUM believes these justifications are pretexts to sacrifice workers and shield executives for accountability for operational failures.”
To avoid the job cuts, the union submitted a cost-saving proposal which it says would have saved the company ZAR 6 million (approximately $329,682). According to the NUM, Petra rejected the proposal.
Terms for Affected Workers
Petra has signed a memorandum of understanding (MoU) with the union that includes a ZAR 10,000 (around $549) relocation allowance for employees who need to move as a result of the redundancies. The agreement also includes a 12-month recall clause, giving former employees priority if the company rehires during that period.
The NUM has called on the South African government to hold urgent discussions with mining companies and unions, describing the situation as a “crisis” for the country’s diamond industry.
Industry Implications
Petra’s decision reflects ongoing challenges in the diamond supply chain, such as lower consumer demand and pricing pressure. A shift towards contract labour may also affect workforce stability in the upstream segment.
Jewellers sourcing from South African producers should be aware of potential disruptions to production and supply due to restructuring and labour issues. Further developments are expected as Petra proceeds with its restructuring and stakeholder engagement.
