De Beers trusts talks will avoid strike at Venetia mine

Venetia underground mine shafts. (Image courtesy of De Beers.)

De Beers, the world’s largest diamond producer by value, said on Friday that it trusts ongoing negotiations with the National Union of Mineworkers (NUM) will prevent a planned strike over wages at its Venetia mine in South Africa.

The Anglo American unit said it has handed workers this week a five-year salary offer, which should provide greater job certainty as the company ramps up Venetia’s underground operations.

“We are confident that through continued engagement with the union and our employees we will reach a sustainable settlement with the NUM,” De Beers said in an emailed statement.

De Beers stopped mining at Venetia open pit in December last year to transition operations underground, as planned more than a decade ago.

Venetia open pit was South Africa’s largest diamond mine. Its $2.3 billion underground section produced its first diamonds in July and targets annual production of 4 million carats. The figure represents 12% of the De Beers’ forecast output for 2023.

Underground mining is expected to extend Venetia’s productive life to at least 2045.

The 135-year-old diamond producer, along with the rest of the global diamond sector, is facing headwinds from falling diamond prices and a loss of market share to synthetic diamonds. 

First half profits decreased by more than 60% to just $347 million, with its average selling price falling from $213 per carat to $163 per carat. De Beers’ recent August sale was the smallest of the year so far.

The diamond producer inked in July an agreement with Botswana, the world’s no. 1 diamond producer by value, in which the country’s government gradually increases the share of rough stones it gets from their joint venture Debswana over the next decade to 50%.