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Diamond giant De Beers likely to cut jobs after Covid-19 hit

Diamond mining giant De Beers is likely to have to cut jobs, its chief executive said on Thursday, as it outlined plans for an overhaul of its business after the coronavirus hit jewellery demand.

De Beers, a unit of Anglo American, earlier reported plunging earnings in the first half of 2020 as a drop in rough diamond sales and prices hurt margins.

Underlying earnings before interest, tax, depreciation and amortization (EBITDA) were just $2 million in the period, down from $518 million in the first half of last year.

De Beers CEO Bruce Cleaver told Reuters official consultations with workers will begin on August 11. He said the business overhaul “is likely to lead to some job losses, but I can’t tell you at this point what that number will be”.

Cleaver said the process would last for three months and involve a review of mining, rough sales, retail and the corporate centre, but exclude joint venture businesses in Botswana and Namibia where the miner employs 20,000 people.

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South Africa’s National Union of Mineworkers did not immediately reply to a request for comment on possible job cuts by De Beers.

De Beers said rough diamond demand will likely remain under pressure in the short term as travel restrictions in southern Africa continues and coronavirus outbreaks hit India’s cutting centres.

Maintaining that the long-term outlook is positive, however, the miner said its business transformation plan aims to boost margins by, among other things, modernising the way it sells diamonds.