Gem Diamonds takes $77.5m impairment on Letseng as annual loss hits $104m

Gem Diamonds reported a loss after exceptional items of $104 million for 2025, driven primarily by a $77.5 million impairment against the carrying value of its Letseng mine in Lesotho, as revenue for the year fell 36% to $98.4 million from $154.2 million in 2024.

Underlying EBITDA collapsed 87% to $3.9 million from $29.7 million, and the company swung to a $9.1 million loss before exceptional items, compared with an $8.1 million profit a year earlier. Net debt rose to $20.1 million from $7.3 million, as carats recovered fell to 90,354 from 105,012 and the average value per carat dropped to $1,105 from $1,390.

Decisive action at Letseng

Chief executive Clifford Elphick said "the continued weakness in the diamond market required decisive action to protect the financial viability of Letseng," language that pointed to the cost-cutting and capital discipline the company would need to sustain the mine through a downturn showing few signs of abating. Even the mine's best individual stone sale of the year, a white diamond that fetched $34,717 per carat, could not offset the broader decline in average pricing across Letseng's output.

A safety bright spot

Amid the financial pressure, Gem Diamonds highlighted an improving safety record, with its all-injury frequency rate falling to a record low of 0.41 from 0.61 in 2024, and zero fatalities recorded for the year. The company also reported a 30% reduction in carbon emissions against its 2021 baseline, ahead of its 2030 target — evidence that operational discipline extended beyond cost control into safety and environmental performance even as the balance sheet came under strain.

What the impairment signals

Writing down Letseng's carrying value by $77.5 million was a significant admission that the mine's near-term earning power had been permanently reduced by the shift in the diamond market, rather than merely depressed by a temporary cyclical downturn. For Lesotho, which holds a 30% stake in Letseng alongside Gem Diamonds's 70%, the impairment was a reminder that even one of the world's most celebrated diamond deposits — renowned for producing exceptionally large, high-value white stones — was not immune to the structural pressures reshaping the global industry.

Sources

• Gem Diamonds: Full Year 2025 Results, 18 Mar 2026

Photo: The Letseng diamond mine in Lesotho, where Gem Diamonds took a $77.5m impairment in 2025. Lschefa, Wikimedia Commons, CC BY-SA 4.0.