De Beers to cut Finch staff by 40 pct

[] — South African union Solidarity said on Thursday De Beers, the world’s biggest diamond producer, plans to retrench 40 percent of workers at its Finch mine due to weak prices for the gems.

Solidarity spokesman Jaco Kleynhans said in a statement De Beers, 45 percent owned by Anglo American Plc, had served it a notice of the planned lay offs of 350 of 870 workers at the operation, citing a decline in diamond prices.

Kleynhans said De Beers also said the quality of the diamonds produced at block 4 of the mine located in South Africa’s Northern Cape province had declined in comparison to the forecasts made during the planning of the project.

The diamond miner also said the strength of the rand against the United States dollar and high operational costs were placing additional pressure on the mine.

South African mining firms sell their minerals in dollars but pay their costs in rand.

Solidarity said although the diamond industry was hit badly by the global economic meltdown, indications were that the recession was over and most companies were recovering.

“Solidarity maintains that De Beers will have to provide critical answers because the revival in the diamond industry makes it seem that the retrenchments at the company are unnecessary,” Solidarity said in a statement.

De Beers’ spokesman Tom Tweedy told Reuters the company hoped to trim jobs and turn the mine around.

“We are entering into a consultation period with employees. We are looking at turning the mine to profitability,” he said.