The latest quarterly data reveals the severity of the crisis in the global diamond industry: De Beers (under Anglo American), the world’s largest diamond producer, saw its revenue plummet by 44%, with an inventory backlog of $2 billion, and its joint venture plans to lay off more than 1,000 people. Alrosa, a Russian company under sanctions, saw its profits plummet by 77%, and several major mines stopped production. Petra Diamonds sold its assets to survive due to a 30% drop in sales. Many other diamond companies are in trouble.
The global diamond industry is experiencing an unprecedentedly rapid decline. Technology entrepreneur and scholar Leanne Kemp pointed out that although some analysts believe that the current predicament will not end the life of the diamond industry, the plummeting revenue, stagnant production, and the questioning of the cultural value and economic status of diamonds indicate that the entire industry is collapsing rather than temporarily declining. These are not isolated incidents, but a manifestation of the comprehensive failure of the industry’s cost structure, cultural identity and geopolitical foundation. The eternal, romantic and scarce attributes of the traditional narrative of diamonds have lost their appeal in the new era.
But industry analyst Paul Zimnisky is cautious. He said: This is the pain period of the diamond industry, mainly due to the demand correction after the sales carnival in 2021-2022, the shrinking of the Chinese luxury market and the impact of laboratory-grown diamonds. If the pressure is relieved, the industry can still recover, but the key is to rekindle consumers’ desire for natural diamonds: if the marketing is weak, the prospects will change completely.
De Beers, a bellwether of the diamond industry, is facing a historic turning point. The giant that once manipulated the marketing of diamond scarcity was put up for sale by its parent company, and its valuation shrank by US$4.5 billion in one year, but no one took it.
Regarding the way out for the industry, some people proposed to reposition diamonds as stable and tradable assets. But Zimnisky was skeptical, saying that diamonds are not fungible like gold. The analyst pointed out that the rarest and high-quality diamonds still have the function of preserving value, but the liquidity of the secondary market is far less than that of gold. For diamond-sensitive countries such as Botswana and Canada, he suggested that all stakeholders jointly build a new narrative: this is a luxury product and must be operated according to the logic of luxury goods.
