DiamondBuzz
Lesotho’s Kao Diamond Mine To Halt Operations Amid Industry Slump
The Mine’s Operator, Storm Mountain, Cited A Severe Financial Crisis Driven By A Prolonged Drop In Global Rough-diamond Prices, Rising Middle East Conflict
Lesotho’s largest diamond mine, Kao, will cease operations on June 30 and transition to care and maintenance. The mine’s operator, Storm Mountain, cited a severe financial crisis driven by a prolonged drop in global rough-diamond prices, rising Middle East conflict-related fuel costs, and stiff competition from lab-grown diamonds.
Despite a warning last October that the mine required $13 million in fresh capital to survive, the necessary investment did not materialise. According to CEO Neo Hoala, the steep market decline made continued operations unsustainable. The shutdown will impact roughly 750 workers.
The mine’s financial downturn is stark: in 2024, Storm Mountain sold 250,000 carats for $50 million—a massive drop from its $105 million revenue in 2022. Kao’s suspension reflects a broader crisis in the diamond sector, following recent insolvencies and closures at Canada’s Ekati mine and South Africa’s Ekapa and Finsch mines.
DiamondBuzz
South African Task Team To Help Struggling Diamond Producers
The South African Government Has Partnered With Mining Industry Leaders To Form A Joint Task Team Aimed At Saving Jobs and Supporting Diamond Producers Facing Severe Market Pressures.
The quick intervention follows major disruptions in the local sector, including Petra Diamonds placing its Finsch mine under business rescue and De Beers announcing a two-year production pause at Venetia, the country’s largest diamond mine.
In a parliamentary reply on October 26, Minister of Mineral and Petroleum Resources Gwede Mantashe confirmed that the team—which includes the Minerals Council South Africa and local diamond producers—will develop strategies to help mines survive current economic headwinds.
The immediate focus is finding practical solutions to protect operations across the entire sector, especially junior and small-scale miners who are being hit the hardest,
Key Industry Challenges
The local diamond sector faces a combination of falling global prices, rising operating costs, and intense competition from lab-grown synthetic diamonds. Official figures highlight the severity of the crisis:
Production Downturn: South African diamond output dropped 19.5% year-to-date through August.
Commodity Slump: According to Statistics South Africa, diamond mining was the weakest-performing mining sub-sector in August, with output falling 23.0% in the three months ending August compared to the previous three months.
Significant Mine Reductions: De Beers reported a 37% year-on-year drop in South African production for Q3 2026 (down to 418,000 carats) as operations wrap up ahead of Venetia’s pause. De Beers expects zero further production in South Africa for the remainder of 2026.
Price Pressures: Lower market values and a strong South African rand reduced average tender prices at the Finsch mine from $56 to $47 per carat, making ongoing operations unviable under current conditions.
The task team will focus on measures to ease cost pressures and address global market shifts. Further details regarding the team’s specific work plan, timelines, and financial resources will be announced as proposals are finalized.
-
JB Insights1 week agoDhanteras Shopping Guide 2026:Gold, Silver, Diamonds & Festive Jewellery Trends To Watch
-
BrandBuzz1 week agoThe Solenne Collection: A Celebration Of Diwali By Bharti Bangur Fine Jewels
-
BrandBuzz1 week agoFrom Diya Puja To Diwali Soirées: Jewellery Designed To Go Beyond The Festive Season
-
National News1 week agoIndriya, Aditya Birla Jewellery Unveiled India’s Largest Sustainable Jewellery Rangavalli

