De Beers to close Kimberley mine

De Beers is preparing to close its historic underground mines in Kimberley, South Africa, by the end of the year with the loss of around 1,000 jobs, the world’s biggest diamond miner told Reuters on Monday.

De Beers, 45 percent owned by miner Anglo American, has been hinting for some time that it might close the three underground mines. Five of its seven South African operations failed to make a profit in the six months just passed, in part due to the country’s strong rand.

De Beers Managing Director Gary Ralfe said that Kimberley’s underground mines, established in 1871, had little ore left, making them unprofitable even after discounting the effect of the rand.

“The Kimberley mines are exhausted. They have been going for 100 years and that is why we are already in a process of consultation, which will lead to the closure,” Ralfe told Reuters during an interview at the London headquarters of its marketing arm, the Diamond Trading Company.

“By the end of this year, I believe we will have closed down the Kimberley underground,” he reportedly said.

Diamonds have been mined in Kimberley since the 1860s, and many people in the town fear the end of underground operations may devastate a community defined by diamonds, which was once said to be home to more millionaires per square foot than anywhere else in the world.

National Union of Mineworkers Deputy General Secretary Archie Palane said the news was not much of a surprise but that the unions could help De Beers keep the mines open.

“These mines are not exhausted — the diamonds are still there,” he reportedly said. “The question is how we can mine smarter without losing jobs or closing the mines. To go ahead (and shut) unilaterally — which I think is highly unlikely given our relationship with De Beers — it would invite confrontation.”

De Beers is based in Kimberley — a town made famous by De Beers’ now-defunct pit, dubbed “the Big Hole.”

Ralfe reportedly said Kimberley’s retreatment operation, which scours previously mined mounds of rock, would remain open.

De Beers will also close or sell its Koffiefontein mine southwest of Johannesburg this year with the loss of up to 500 jobs, Ralfe reportedly said, and will do the same at its smaller Oaks mine in the next two years.