The miner has decided to place the asset on “care and maintenance,” meaning it will put diamond recovery on hold but keep managing the site until market conditions improve.
The average price of rough diamonds extracted from Ghaghoo fell to $142 per carat at the most recent sale in December, from $210 per carat in early 2015, according to the company’s statement.
The miner added that it would “continue to monitor market conditions for a time when commencing full production would make economic sense.”
Gem Diamonds opened the Ghaghoo mine in 2014. In February 2016, the company said it would downsize operations there due to a drop in selling prices, with the intention of expanding the project if prices were to pick up.
The company also owns the Letšeng mine in Lesotho. Diamonds from that project fetched an average of $1,695 per carat in 2016 – a 26-percent drop from the previous year.