Diamonds in South Africa are losing their sparkle

Diamond mining in South Africa, historically pivotal to the economy and livelihoods of many across the country, faces challenges as production recently hit a decade low.

Despite this downturn, reinvestments by the one of the biggest diamond companies in South Africa, and some developments in the electricity and logistics sector, offers hope for a resurgence.

South Africa, renowned for its significant role in diamond production, has a rich history with the trade dating back to 1867 when diamonds were first discovered near the Orange River, leading to a widespread rush and solidifying its prominence in the global diamond industry.

However, a recent analysis by The Outlier shows that the country’s diamond production has taken a dip.

Before 2023, the country produced an average of 8.5-million carats a year, hitting a peak of 10.2-million carats in 2022 where sales amounted to R27.7 billion.

However, by 2023, production had dropped to 6.1-million carats.

There are numerous reasons given for the drop; however the key contributor for this is the fact that the De Beers’ Venetia diamond mine in Limpopo reached the end of its open-pit operations in December 2022.

According to the Mining Review Africa, until it ceased open-pit operations at the end of 2022, it contributed 40% of the country’s annual diamond production.

Source: TRADE FINANCE