FROM THE DESK OF RAJESH BAJAJ

The decline in the industry and the influence of cultured diamonds are pressuring the natural diamond market.

In 2025, the global natural diamond market faced difficulties, driven by weaker demand, the growing popularity of laboratory-grown diamonds, and geopolitical challenges. De Beers, the leading diamond producer worldwide, experienced a notable decline in revenue, with about $20 billion in unsold inventory, and had to lay off over 1,000 employees across its key business areas due to the slowdown. Its parent company, Anglo American, began selling De Beers and later announced plans to merge with Canada’s Teck Resources.

Other industry participants are also confronting challenges. Russia’s Alrosa experienced a nearly 80% decline in profits and temporarily suspended operations at several key mines. Certain smaller mining companies have had to enter administration or cease operations entirely. Laboratory-grown diamonds, which are identical in chemical composition and appearance to natural diamonds, continue to gain popularity. Their growth has not only influenced consumer behavior but also contributed to lower overall prices for natural diamonds. In key consumption sectors such as engagement rings, their increasing market share has challenged the traditional value proposition of natural diamonds.

In response to this market reshaping, companies have needed to adjust their strategies. De Beers has shut down its Lightbox brand, shifting marketing efforts back to natural diamonds. Meanwhile, industry and government bodies have collaborated on initiatives. As part of the Luanda Agreement, key diamond-producing nations such as Botswana and Angola have agreed to allocate 1% of their yearly diamond earnings to a marketing campaign designed to increase global demand for natural diamonds.

Economies dependent on diamond revenue face considerable challenges. For instance, Botswana, a leading African exporter, experienced a substantial decrease in sales, which compelled the nation to reduce production, thereby increasing unemployment and intensifying fiscal pressures. Debswana, its joint venture with De Beers, has announced a production reduction of up to 40% for 2025, in response to subdued end-market demand and intense price competition from laboratory-grown diamonds.

Analysts attribute the market change to shifts in consumer preferences, a saturated supply of lab-grown diamonds, and slowing growth in China’s luxury market, a key expansion driver. While lab-grown diamond prices show signs of cooling, potentially reducing appeal, industry leaders believe restoring consumer confidence in natural diamonds needs ongoing, coordinated branding and strategic efforts.