Diamond giant De Beers has issued a notice to South African trade union Solidarity announcing its plans to start a process of retrenching more than 40% of the employees at the Finsch diamond mine in the Northern Cape of South Africa, says Solidarity. According to the notice, the company plans on retrenching nearly 350 of its 870 employees at the mine.

De Beers cites the drop in the price of diamonds due to the recent global recession as one of the reasons for the planned retrenchments. In addition, the company claims that the quality of the diamonds produced at block 4 of the mine has declined in comparison to the forecasts made during the planning of the project. According to the company the strength of the rand against the American dollar as well as the high operational costs of the mine are placing additional pressure on the mine, says Solidarity.

According to Solidarity spokesperson Jaco Kleynhans, there is much more to the company’s decision to carry out retrenchments than just the effect of the recession. “There are already numerous indications that the recession is over and many industries are already showing healthy recovery. Although the diamond industry is one of the mining sectors hit hardest by the recession, it is also experiencing a significant revival,” Kleynhans emphasized.

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. In the preceding 12 months, the company has already retrenched 37 employees due to operational requirements.