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July 31, 2020

De Beers to lay off workers as Covid-19 slashes production

By JP Casey

Diamond miner De Beers has announced that it may have to cut jobs as the Covid-19 pandemic continues to disrupt mining production and profitability.

CEO Bruce Cleaver told Reuters that the company would begin considering workers’ jobs from 11 August, but did not comment on how many of the miner’s 20,000 employees could find their positions under threat. While the company’s projects in Botswana and Namibia will see no immediate lay-offs, due to states of emergency in these countries that prevent firms from cutting jobs amid the Covid-19 pandemic, it is unclear how the miner’s assets around the world will be affected.

The news follows the publication of the company’s interim financial results for the first half of the year, which paint a grim picture for the miner. Across De Beers’ operations, group revenue plunged from $2.6bn in the second half of 2019 to $1.2bn in the first half of 2020, while underlying earnings before interest, tax, depreciation, and amortisation collapsed from $518m to $2m over the same period.

While the company’s Namibian and South African operations actually recorded an increase in production volumes between the two six-month periods, its projects in Botswana and Canada struggled considerably. In Botswana, its total gold production fell from 11.7 million carats to 7.5 million carats, while production in Canada fell from 2.1 million carats to 1.6 million carats.

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