The National Union of Mineworkers (NUM) has taken Petra Diamonds to task over its decision to fire more than 200 employees in a cost-cutting measure.
The move comes amid a prolonged industry downturn that has forced many companies to cut staff, production and pricing forecasts. The workers under consideration are those employed at the Company’s Cullinan and Finsch mines in South Africa. Petra first announced it would lay off workers in December, while also lowering its rough-pricing forecast. In January, the miner introduced a second reduction to its rough-pricing guidance and sold its Williamson mine in Tanzania as liquidity challenges persisted.
“This decision is unacceptable, as it will have devastating consequences for the affected employees, their families, the broader community and the economy,” NUM said Sunday. “NUM has observed with serious concern that the majority of mining companies that are retrenching workers around the country are replacing them with contract workers. This is capitalist barbarism at its best.”
When questioned by NUM, Petra pointed out that the diamond industry was facing the longest slump in over 30 years, with global economic factors and the rise of lab-grown diamonds hitting the trade, the union explained.
“For our economy to reach projected annual economic growth it needs not guzzle work opportunities but create more jobs to induce economic growth,” said Masibulele Naki, NUM’s chief negotiator for the diamond sector. “While we note the potential adverse impact of the global diamond market currently, it is not justifiable to destroy jobs.”
Other companies in the sector are also having difficulties due to the economic crisis. Last week, Anglo American slashed De Beers’ production plan by 10 million carats, while stating lowering the mining giant’s valuation was also on the table. In December, Gemfields announced it would halt some of its operations and was considering offloading other businesses to save money. Meanwhile, Lucapa Diamond Company’s revenue slid 71% year on year as the average price plummeted 80%, and sales of rough from Burgundy’s Ekati mine in Canada dropped 39% year on year in the fourth quarter. Mountain Province suffered from weak rough prices as well, as its revenue for 2024 fell 20% compared to the previous year.
Image: Workers at the Cullinan mine. (Petra Diamonds)
