De Beers to pause work at S.Africa's largest diamond mine

De Beers announced Monday it will pause production at South Africa's largest diamond mine for two years to reduce costs while trading conditions remained tough.

De Beers is majority-owned by British mining giant Anglo American, which is seeking to offload its stake as the natural diamond market faces intense pressure from laboratory-grown gems.

It said "rough diamond trading conditions are expected to remain challenging in the near-term" with production decreasing and several producers closing mines.

"Consistent with recent actions to improve business resilience, De Beers intends to pause production at the Venetia mine in South Africa for two years to reduce costs while also rephasing capital expenditure on its underground project," it said in a statement.

Venetia, which lies near the borders with Botswana and Zimbabwe, has been run by the De Beers group for more than 30 years.

It accounts for more than 40 percent of the country's annual diamond production and is the largest producer by value.

It employs about 4,400 staff.

In 2012, the firm started digging beneath Venetia, seeking to reach gems at a depth of more than 1,000 metres (3,250 feet).

De Beers previously said the facility would produce about four million carats of diamonds annually.

The action at the Venetia mine follows a decision earlier this year to pause the Tuzo Phase 3 expansion project at the Gahcho Kué mine in Canada, it said.

CEO Al Cook said the company was making a number of changes to ensure greater business resilience while supporting long-term value creation.

"We recognise the protracted challenging conditions as the diamond industry evolves, though we are encouraged by signs of consumer demand growth in the US and beyond, particularly in higher quality diamonds," he said.