Job losses are looming if De Beers loses its luster

Diamond miner De Beers is about to embark on a major overhaul after a less-than-stellar performance.

There are growing fears of a “jobs massacre” as a result of plans being drawn up to cut costs at the group, a senior industry source told The Mail on Sunday.

De Beers, which recently appointed Kenyan actress Lupita Nyong'o as its first global ambassador, is the world's largest diamond producer by value and has 20,000 employees.

Earlier this month, Anglo scared the city when it said it had to cut spending across the company – including at De Beers.

Diamond prices have fallen due to lower demand, coupled with a huge increase in production of much cheaper lab-grown gemstones, which now represent about 18 percent of the market – up from just 0.3 percent in 2015.

The source said: “Senior management is being effectively interviewed with a view to cutting their jobs. Lab-grown diamonds are increasingly a threat.

If you're faced with a decision like an engagement ring, you can buy a lab-grown ring that looks exactly the same and is actually exactly the same, save the money, and then go on the world's greatest honeymoon.”

The source said there are fears of “significant depreciation” in the value of the stocks. De Beers will earn an estimated £2.9 billion from diamond sales in 2023 – more than a third less than in 2022.

The company told the MoS that prices have “stabilized” but expects improvements in trading to be “gradual.”

There are also concerns that a deal struck earlier this year with the Botswana government could damage De Beers' long-term finances.

The company mines the majority of its stones in the African country. The Botswana government and De Beers run the mines through a joint venture. But Botswana's leaders are not satisfied with the conditions.

Under an agreement reached in the summer, Botswana will own larger percentages of the bricks produced in the future, so De Beers could receive less money in the long term. The company is also committed to handing Botswana hundreds of millions of pounds over ten years to help develop its economy.

City analysts speculate that the group could become a takeover target or that it could split itself up.

De Beers boss Al Cook, who joined the company in February, said the group is “very satisfied” with the agreement with Botswana.

A De Beers spokesperson said: 'We have recently reviewed our strategic priorities as we focus on positioning De Beers for long-term success and maximizing sustainable value.'

The spokesperson added that “the optimal organizational structure” is being considered to ensure the business is “as effective and efficient as possible”.