De Beers has unveiled its largest natural diamond campaign in over a decade, reaffirming the beauty, rarity, and authenticity of natural diamonds in an era where lab-grown stones are increasingly prevalent.
The new campaign, titled “Unlike Anything,” introduces Desert Diamonds — a collection inspired by the natural hues of the desert, showcasing warm, earthy tones that celebrate individuality and the timeless connection between nature and human emotion.
As mass-produced, lower-cost lab-grown diamonds continue to gain market share, De Beers’ message is clear: natural diamonds remain unmatched — each one a product of geological wonder, billions of years in the making, and entirely unique.
According to De Beers, research found that 90% of consumers expressed interest in purchasing a Desert Diamond as a distinctive expression of style and a symbol of connection with nature. The campaign positions these desert-inspired shades as markers of authenticity, highlighting how the nuances in colour reflect the natural beauty and individuality of each stone.
“With Desert Diamonds, the ancient sands of time meet today’s zeitgeist for authentic beauty,” said Sandrine Conseiller, CEO of De Beers Brands. “Natural diamonds are unique and rare – no two are the same. Their colours have been forged by nature and perfected over billions of years.”
The growing appreciation for warmer diamond tones has also been influenced by high-profile figures such as Taylor Swift, whose engagement ring features a vintage old mine-cut diamond with a soft “candlelight glow,” as well as Kim Kardashian and Doja Cat, both of whom have embraced the desert-diamond aesthetic.
Industry analysts note that De Beers’ strategy goes beyond aesthetics. Chandler Mount, founder of Affluent Consumer Research Company, commented:
“Desert Diamonds mark a shift from diamonds as objects to diamonds as identity. De Beers isn’t just selling colour — they’re selling character. This is white space strategy executed with emotional intelligence.”
For the DCLA (Diamond Certification Laboratory of Australia), which upholds the highest standards in natural diamond grading and certification, De Beers’ campaign reinforces a vital message: authentic natural diamonds remain irreplaceable — not only for their enduring beauty, but for the story each stone carries within it.
De Beers Group, the global diamond mining leader, has announced the closure of its lab-grown diamond (LGD) jewellery brand, Lightbox, marking a strategic pivot back to natural diamonds. The decision comes as part of the company’s broader Origins Strategy, launched in May 2024, to streamline operations and prioritise high-return business areas.
End of the Road for Lightbox
Launched in 2018, Lightbox was positioned to differentiate lab-grown diamonds from natural ones by offering transparent linear pricing at $800 per carat. However, the LGD market has undergone significant change. Wholesale prices for lab-grown diamonds in the jewellery sector have dropped by around 90%, pushing the market toward a cost-plus pricing model. This sharp decline in value has ultimately led De Beers to discontinue Lightbox.
In addition to market pressures, De Beers cited weakening demand and uncertainty around tariffs as contributing factors behind the closure. Discussions are currently under way for the sale of Lightbox’s assets, including its remaining inventory.
Reaffirming Commitment to Natural Diamonds
Al Cook, CEO of De Beers Group, emphasised that the decision to close Lightbox reflects the company’s long-term strategy to focus on natural diamonds, where brand heritage and enduring value remain strong.
“The persistently declining value of lab-grown diamonds in the jewellery market underscores the growing distinction between factory-made stones and natural diamonds,” Cook said. “Global competition, especially from low-cost Chinese producers, and falling prices driven by US supermarkets, show that prices are likely to continue dropping. Lightbox played a role in clarifying the difference in value between lab-grown and natural diamonds.”
De Beers plans to reinvest resources from Lightbox into marketing campaigns and initiatives that enhance the global appeal of natural diamonds.
Support for Customers and Partners
As Lightbox operations wind down, De Beers will ensure a smooth transition for employees, suppliers, retail partners, and other stakeholders. Warranties and after-sales services for existing Lightbox purchases will continue to be honoured during the closure period.
Synthetic Diamonds to Power Innovation
While De Beers exits the LGD jewellery space, it remains invested in the future of synthetic diamonds in industrial and technological applications. Element Six, a De Beers subsidiary and former supplier to Lightbox, will continue developing lab-grown diamond solutions for sectors such as semiconductors, optics, and quantum technology.
Element Six will centralise its chemical vapour deposition (CVD) production in Oregon, USA, as part of its plan to strengthen global partnerships and fuel innovation across high-tech industries.
A leading auction house was shocked to discover a pink diamond it planned to sell was actually a fake.
The gem was sent to the Institute of Diamonds – the De Beers diamond grading and verification division – ahead of the sale.
It was examined there and found to be a forgery, De Beers CEO Al Cook said in a LinkedIn post to his 42,500 followers.
“At first glance, the stone looks beautiful. It even has an inscription on the side which claims its a diamond,” he said.
But a combination of experts and sophisticated detection machines confirmed the stone was not actually diamond.
“As soon as our team looked at the stone, they suspected it was a fake,” said Cook in a follow-up to his original post.
“The certification inscription on the side had led the auction house to believe it was real.”
He also said: “Our team was quite excited to see this extraordinary stone and actually very sad when it turned out to be a fake.
“Luckily the fraud was stopped before an auction customer paid a vast sum of money!”
Cook didn’t provide further details, and De Beers declined to elaborate.
In his original post Cook said: “Henry Smith from our Institute of Diamonds confirmed that this pink stone was a forgery. ‘It had even been lasered with a fake inscription’.
“Henry explained that the auction house was shocked, but ‘cases like this emphasise the critical role of advanced detection technologies’.”
Cook also said in his post that De Beers was ramping up production of DiamondProof, the verification device aimed specifically at retailers that was showcased at JCK last year and which is now available in the US.
He said it can distinguish a natural diamond from a lab-grown or moissanite in a few seconds.
The diamond world is facing fresh turbulence following the U.S. government’s decision to impose tariffs on imported diamonds — a move that De Beers CEO Al Cook says does nothing to support American jobs or the economy.
In an exclusive interview with the Financial Times, Cook made it clear: “There are no U.S. diamond mining jobs to protect.” He stressed that these tariffs don’t create employment or benefit the domestic industry — instead, they act as a consumption tax that ultimately punishes the American public.
A Tax on Love, Not a Boost to Industry The U.S. remains the largest market for diamond jewellery, accounting for about half of global demand, yet it has no significant commercial diamond mining of its own. Every diamond on American soil has been imported — meaning the 10% blanket tariff on all imports, introduced by President Donald Trump, hits the diamond trade especially hard.
Unlike many raw materials that were exempt from the tariffs, diamonds were left out, intensifying the impact on a sector already grappling with declining demand and competition from synthetic alternatives.
According to Cook, the result has been immediate: the trade in natural diamonds briefly ground to a halt. The World Diamond Council echoed his warning, stating that $117 billion in annual revenue and over 200,000 U.S. jewellery jobs could be at risk if diamonds aren’t removed from the tariff list.
“Tariffs on diamonds are not protecting American industry,” Cook emphasised. “They’re just increasing the cost of engagement rings, anniversary gifts, and other sentimental purchases.”
Global Trade Routes Disrupted What makes diamonds unique is their complex, high-value supply chain. They’re small, easy to transport, and often pass through multiple countries — from mines in Botswana and Angola, to polishing hubs in India, and finally into U.S. jewellery stores. Tariffs disrupt that finely tuned system.
This comes at a particularly sensitive moment for De Beers, as parent company Anglo American prepares for a sale or initial public offering (IPO) of the diamond giant. Despite industry challenges, De Beers is pushing ahead with IPO plans that could launch by early next year.
But the company is feeling the pain too: first-quarter revenue dropped 44% year-on-year to $520 million, reflecting both lower prices and reduced demand. Anglo American has also written down De Beers’ value by $4.5 billion over the past two years.
Hope on the Horizon? Still, Cook remains optimistic. He believes that over time, U.S. tariffs on diamonds will be lifted. The American government has already granted tariff exemptions for items like smartphones and car components, and Cook is confident natural resources like diamonds will follow suit.
Adding to that optimism are positive developments in U.S.–India trade talks. India polishes over 90% of the world’s diamonds, making it a key link in the supply chain. A favourable trade agreement between Washington and New Delhi could ease the pressure and offer the diamond sector a much-needed reprieve.
In the end, the message from De Beers is clear: Tariffs on diamonds don’t help American workers or industry — they just make life more expensive for consumers. As negotiations progress and the global market adjusts, the diamond world will be watching closely to see whether policymakers come to the same conclusion.
India has been emerging as a bright spot for the cut and polished diamonds amidst a slowdown in key markets such as the US and China, Amit Pratihari, managing director, De Beers India told Reuters on Wednesday.
India is the world’s largest centre for cutting and polishing diamonds, accounting for nine out of 10 diamonds polished globally, according to Indian government data.
However, the country’s cut and polished diamond exports fell this year because of weak demand from China and the US, forcing the industry to focus on the growing domestic market that surpassed China last year to become the world’s second-largest.
“China has completely slowed down in the luxury segment … We see India growing very strongly,” Pratihari said in an interview.
De Beers, a unit of Anglo American, is the world’s top diamond producer by value and India’s number one supplier of rough diamonds.
However, there were some early signs of recovery in the US and “big growth” in the Middle East, Pratihari said.
“In next couple of months, we expect recovery,” he said.
Weak exports demand for polished diamonds forced Indian processors to trim imports of rough diamonds by 22% to $7.9 billion during April to December, according to India’s Gem and Jewellery Export Promotion Council (GJEPC).
De Beers is adjusting prices of rough diamonds to support the midstream industry – companies that buy rough diamonds from miners and sell them after cutting and polishing to retailers – in the face of polished diamond prices falling more than those of rough diamonds, he said.
“Miners are controlling the supply so more rough does not come into the market that would put additional pressure on the polished prices. But the pressure on polished prices is in midstream as in retail there is no change,” he said.
India’s cut and polished diamond exports fell by 8.3% to $9.76 billion in April-December compared with the 2023 period, according to GJEPC.
De Beers has reportedly built up its largest stockpile of diamonds since the 2008 financial crisis, with an inventory valued now at roughly $2 billion, according the Financial Times.
“It’s been a bad year for rough diamond sales,” De Beers chief executive Al Cook told the FT, though he did not provide additional details on its inventory.
The diamond giant has faced multiple headwinds in recent years. A slumping Chinese economy, in particular, has been a major drag on demand. Cheaper lab-grown diamonds are also adding pressure.
In a briefing to Bloomberg last year, Cook said his company has been building its stock on the assumption that diamond prices will recover, and that it will be able to sell that supply.
At the end of 2024, that hasn’t materialized. For the first half of this year, De Beers’ sales were down about 20% compared to the same time a year ago.
Still, Cook remains upbeat about a turnaround. “As we go independent, we have the freedom to focus on marketing as hard as we focused on mining,” he told the FT.
“This feels to me like the right time to be driving marketing and getting behind our brands and retail, even as we cut the capital and the spend on the mining side.”
However, a new report from McKinsey gave a less optimistic outlook for diamond miners, suggesting that lab-grown alternatives could one day take over the market.
Earlier this year, De Beers’ parent company Anglo American announced plans to spin off the diamond business either through a sale or an initial public offering.
De Beers says it will further reduce the number of sightholders, in a move designed to build partnerships that “create value”.
The emphasis will be on quality rather than quantity, CEO Al Cook told the Facets 2024 conference in Antwerp yesterday (26 November).
De Beers wrote to its 69 current sightholders last month advising them that a new supply agreement, as of January 2026, would be determined by an objective selection and allocation process. It declined to comment at the time.
“There will be some partnerships around the polished side, some partnerships around the rough side, some partnerships around dealing, some partnerships that go all the way into retail, but every partnership must create value, and that’s really important for all of our industry going forward,” Cook told the conference.
De Beers last reduced the number of sightholders in January 2021, when it introduced new contracts dividing buyers into three categories – dealers, manufacturers and integrated retailers.
The number of De Beers sightholders peaked at around 350 in the 1970s. It had halved by 2001 and was further reduced in subsequent changes to the client structure.
De Beers has launched an ambitious five-year plan to become the premier jewelry brand worldwide, Diamond World reports.
CEO Al Cook aims to expand De Beers’ retail presence to compete with luxury giants like Tiffany and Cartier. Cook envisions transforming De Beers from a mining-focused company into a leading jewelry house, capitalizing on its rich legacy and market influence.
In an interview with the Financial Times, Cook said: “Diamonds’ future extends far beyond mining. I’m thrilled by the potential to execute our comprehensive strategy, aspiring to establish the world’s most prestigious jewelry maison—a vision that transcends traditional mining company boundaries.”
Central to this transformation is De Beers’ “Origins” strategy, which seeks to drive demand for mined diamonds by appealing to a new generation of consumers. This includes revitalizing marketing efforts and using innovative techniques to enhance the brand’s reach.
A key part of De Beers’ strategy is strengthening relationships with retail partners. Future plans include forming strategic alliances with major retailers, such as Signet Jewelers in the United States and Chow Tai Fook in China.
The Botswana government may raise its shareholding in global diamond miner De Beers, President Mokgweetsi Masisi told JCK News, after parent company Anglo American said it plans to spin off or sell the business.
The government owns a 15% stake in De Beers and Botswana accounts for 70% of the company’s annual rough diamond supply.
Anglo outlined a radical review of its business including a sale or divestment of the diamond business to focus on copper, iron ore and a fertilizer project in the UK to fend off a takeover from bigger rival BHP Group.
Masisi told JCK in Las Vegas that Anglo’s sale of De Beers would be “the best thing” if it happens.
The government could raise its shareholding in De Beers “if it’s attractive to,” Masisi told the online diamond news channel. The president in May told CNBC Africa that government would defend its interests in the diamond miner.
Among the plans Anglo could consider is an initial public offering for the diamond business, Reuters reported on May 14, citing sources.
Like other luxury goods, diamond prices have been hammered by a slump in global demand. De Beers has been limiting supply and offering flexibility to contracted customers. In February, Anglo announced a $1.6 billion impairment charge on De Beers. Anglo acquired De Beers in 2011, buying the Oppenheimer family’s 40% stake for $5.1 billion.
Masisi told JCK News Botswana’s ideal partner in De Beers would be a long-term investor. The government will try to keep the “bad guys out” and wants investors whose vision is aligned with the government’s.
“One of the characteristics of a bad owner is someone who has impatient capital,” Masisi said. “This industry requires somebody who is in it for the long-haul, because it has its ups and downs.”
Anglo American, the $30.7 billion British multinational mining company, just announced plans to divest De Beers, its diamond mining and jewelry subsidiary. Ango American holds an 85% interest in De Beers and the government of Botswana owns the minority share.
“Anglo American is now exploring the full range of options to separate the business in order to set it up for success in unlocking full value, “ Anglo American CEO Duncan Wanblad said in a presentation earlier this week. “This will give both Anglo American and De Beers a new level of strategic flexibility to maximize value for both company’s shareholders.”
Anglo American is fighting a takeover bid from BHP Group, reported by Reuters to be the world’s largest mining company. In a move to shore up the company’s overall value, Anglo American will focus on its cooper, premium iron ore and crop nutrients businesses. Also slated to be divested is its Anglo American Platinum business, both of which will bring profound changes to the roughly $300 billion global jewelry industry.
Advising that Anglo American is considering a number of options for De Beers, be it a sale or IPO, and that it is still working through logistics with Botswana, Wanblad said, “It is a great business and it has fantastic assets and it has an exceptional brands. And therefore on that basis, it really deserves to be together on that set of criteria. How we do this is going to be a journey.”
De Beers CEO Al Cook is more than ready for the next phase of that journey. “For 124 of our 136 years of existence, Anglo American didn’t own the majority of De Beers,” he shared in an exclusive interview from Botswana. Anglo American acquired its majority stake in 2011.
De Beers is moving its auctions headquarters from Singapore to Botswana in a move designed to streamline its operations and cut costs.
The UK-based miner sells around 10 per cent of its rough, by value, via online auctions to almost 1,000 registered buyers. The other 90 per cent is sold to sightholders.
In a statement the company said De Beers Group Auctions would pause it operations and sales events in the coming months, while the transition takes place.
Last year De Beers postponed its Cycle 5 and 6 auctions amid dwindling demand from Indian manufacturers and in January it introduced a new online “sealed bid” tender called The Offer for some of its rough diamonds.
Al Cook, De Beers Group CEO, said the move would drive cost efficiencies and support the needs of customers.
Last December Anglo American, parent company of De Beers said the diamond miner would have to cut $100m from its annual overheads in the face of ongoing weak demand.
De Beers moved its Sights from the UK to Gaborone, Botswana, in 2013.
Diamond output for De Beers slumped 23 per cent in the first quarter, as production was cut in response to a slow recovery in demand amid a pullback in luxury spending and the proliferation of lab-grown equivalents.
De Beers was the only unit of Anglo American to adjust its full-year production forecast on Tuesday, reducing its guided range to 26mn to 29mn carats of output, from 29mn to 32mn, and lifting expected average costs to $90 per carat, from $80.
Anglo American said the diamond market was suffering from a price rout caused by excess piles of inventory, something that De Beers has previously acknowledged is partly down to lab-grown diamonds cannibalising demand for mined stones.
“Ongoing uncertainty around economic growth prospects has led to a continued cautious purchasing approach” by its customers, Anglo American said. “The recovery in rough diamond demand is expected to be gradual through the rest of the year,” it added.
De Beers said a nascent recovery had begun in the first quarter, buoyed by improved demand for diamond jewellery around Christmas and new year in the US.
Diamond producers including De Beers’ arch-rival, Russia’s Alrosa, tried to curb the flow of gemstones into the market in the second half of last year. The Indian government even put on a voluntary import moratorium on rough stones in the final quarter to protect its polishers and cutters.
Despite those continued efforts into this year, demand, prices and the market recovery remains sluggish, Anglo said, requiring further action to be taken to reduce supply.
Anglo American chief executive Duncan Wanblad has been under pressure to improve performance since a production downgrade in December sent shares tumbling, although it has been aided by higher commodity prices, especially for copper.
Wanblad has said that “nothing is off the table” when it comes to asset sales or other options to restructure units, of which De Beers and the platinum group metals division are the most troubled.
“We are progressing through our asset review to optimise value by simplifying and improving the overall quality of the portfolio,” he said in a statement in the first-quarter production update on Tuesday.
Shares in Anglo American dropped 1.7 per cent in early trading in London and remain about a third lower than they were at the start of 2023.
Besides diamonds, the London-based company managed to maintain its guidance across its other commodities such as copper, iron ore and steelmaking coal.
Copper output jumped 11 per cent to 198,100 tonnes, helped by record throughput at its Quellaveco mine in Peru and higher grades at its Chilean mines Collahuasi and El Soldado.
South Africa, where Anglo American has iron ore, steelmaking coal and platinum mines, has become an increasing drag on production because of crippling problems in the logistics and power sector. Rail constraints resulted in a 2 per cent drop in output at Kumba Iron Ore.
It’s 50 years since the world’s largest octahedral diamond was recovered, and even today it remains uncut, unpolished and unsold.
The 616-carat Type 1 yellow diamond, dates back to 17 April 1974 and comes from the Dutoitspan Mine in Kimberley, South Africa, which opened in the 1870s and closed in 2005.
The miner who found the diamond, De Beers employee Abel Maretela, was rewarded with a large bonus and a house.
Al Cook, De Beers Group CEO, was shown the diamond on a visit to Johannesburg, by Moses Madondo, CEO of De Beers Group managed operations.
“I’m a geologist so I love to learn about the history of diamonds even before they were found,” he said in a LinkedIn post.
“This is a Type 1 diamond which means that it was formed around 150 km below the earth’s surface, deep in the mantle, over 1 billion years ago.
“During the Cretaceous period, about 100 million years ago, a kimberlite volcano brought this diamond up to the earth’s surface. Its beautiful yellow colour comes from nitrogen atoms that were trapped inside the carbon lattice when it was forming in the mantle.”
Anglo American has announced the value of rough diamond sales (Global Sightholder Sales and Auctions) for De Beers’ second sales cycle of 2024, amounting to US$430 million.
The provisional rough diamond sales figure quoted for Cycle 2 represents the expected sales value for the period and remains subject to adjustment based on final completed sales.
Al Cook, CEO of De Beers, said: “I’m pleased to see a further increase in demand for De Beers rough diamonds during the second sales cycle of 2024. However, ongoing economic uncertainty in the US has led to retailers restocking conservatively after the 2023 holiday season. Consumer demand for diamond jewellery is growing in India but remains sluggish in China. Overall, we expect that the ongoing recovery in rough diamond demand will be gradual as we move through the year.”
De Beers’ prices fell last year as a prolonged oversupply in the midstream and economic challenges weighed on demand.
The company’s rough-price index, which reflects like-for-like values, dropped 6% for the 12-month period, parent company Anglo American reported Thursday.
Sales volume slipped 19% to 27.4 million carats, with the average selling price sliding 25% to $147 per carat. While the company has not published its full-year revenue, rough sales decreased 36% to $3.63 billion, according to data from De Beers’ 10 sight reports for 2023.
Output for the year was down 8% to 31.9 million carats as the company transitioned its Venetia deposit in South Africa to underground mining and processed lower-grade ore from its Canadian and Namibian sites, outweighing an increase in Botswana.
In the fourth quarter, sales volume plunged 63% year on year to 2.7 million carats, while production declined 3% to 7.9 million carats.
“De Beers offered full flexibility for rough-diamond allocations…as sightholders continued to take a cautious approach to their purchasing during the quarter as a result of the prevailing market conditions and extended cutting and polishing factory closures in India,” the company noted. “De Beers was loss-making in the second half of 2023 owing to the subdued sight sale results, reflecting conditions of cyclical lows driven by the prevailing macroeconomic environment. Whilst there has been some improvement coming into 2024, the prospects for economic growth remain uncertain and it may take some time for rough-diamond demand to fully recover.”
The miner expects to produce between 29 million and 32 million carats in 2024. However, it has cautioned that it “will assess options to reduce production in response to prevailing market conditions.”
De Beers has introduced a new online “sealed bid” tender for some of its rough diamonds.
The Offer, which went live last week, allows buyers to key in the price they’re prepared to pay for a lot, unseen by other bidders.
It is an additional sales channel rather than a replacement for the online auctions that have been taking place since 2008.
Online auctions have accounted for the 10 per cent of De Beers production that is not sold at Sights.
“We are constantly looking at new ways for customers to source natural diamond supply with a view to make the experience as simple and flexible as possible while keeping commerciality in mind,” said Rhyzard Bilimoria, account director in De Beers Group Diamond Trading.
“We believe that for certain product ranges and during certain industry conditions, the Offer represents the most effective channel to meet customer and industry needs.”
He said the Offer was quick, simple, confidential and allowed buyers to bid any amount.
“We recognise that in periods when trading conditions are evolving, different customers can perceive different value depending on their specific activities – it is therefore beneficial to implement a sales process where there is no visibility of other bidders’ activity, as this supports customers’ ability to make independent assessments of value that reflect their own underlying demand.”
De Beers cancelled its online auctions in the last two sales cycles of 2023 amid slow demand.
De Beers reduced rough-diamond prices by an average of 10% to 15% at this week’s sight, aiming to stimulate sales and bring its rates more in line with the rest of the market, sources told Rapaport News.
The miner lowered prices by 5% to 10% for rough under 0.75 carats, with thinner or no reductions for the smallest items that produce melee, sightholders and other market insiders said Monday on condition of anonymity.
Rough weighing 0.75 to 2 carats saw reductions of approximately 10% to 15% on average, while prices of 2-carat and larger goods dropped about 15%, the sources added.
Select makeables — the 2- to 4-carat rough stones that produce SI2 to I2 diamonds — fell more sharply, with estimates ranging from 20% to 25%. This reflects the impact of lab-grown competition on mid-market US demand in the past year, sightholders explained. De Beers does not comment on pricing.
De Beers tends to sell less volume during a downturn and reduce prices only once the polished market has improved. The RapNet Diamond Index (RAPI™) for 1-carat diamonds slid 21% in 2023, the worst year on record for the category, but sightholders reported a moderate uptick in US demand since the holiday shopping season began, though Chinese orders remain weak.
The global market also stabilized as a result of India’s two-month voluntary freeze on rough imports, which ended December 15.
“[In the past, De Beers] didn’t want to change prices because they didn’t know [what the state of the] polished [market] was,” one of the sources commented. “They have an idea where polished is now, and have adjusted rough to polished.”
However, several sightholders said the drops did not go far enough, with De Beers’ prices still above those of outside tenders and auctions and also too high for many manufacturers to make a profit.
Even with the price reduction, the sources expected demand at the sight to be limited, with sales of around $300 million. The trading session, De Beers’ first of the year, began Monday and runs through Friday in Gaborone, Botswana.
Bruce Cleaver will leave his role as cochair of De Beers’ board of directors and will also relinquish his position on the board of the miner’s lab-grown diamond-manufacturing company, Element Six.
The move follows Cleaver’s exit as CEO in early 2023 after six years in the position. Cleaver’s appointment to the boards was to enable a smooth transition of leadership to his replacement, Al Cook, a De Beers spokesperson told Rapaport News.
Additionally, while on the board, “Bruce also supported the finalization of the commercial negotiations with the government of the Republic of Botswana,” the spokesperson said. “With the leadership transition complete, and with De Beers and Botswana having signed heads of terms for the new agreements, Bruce has delivered on those objectives, and so has stepped down from the board of directors.”
Cleaver will remain with De Beers in an advisory capacity, the spokesperson added. Duncan Wanblad, CEO of De Beers parent company Anglo American, will now be sole chair of the miner’s board of directors.
When the world’s most important diamond buyers arrived at De Beers’ offices in Botswana late last month, they were presented with a rare offer by their host: the option to buy nothing at all.
De Beers markets its rough diamonds in a series of tightly scripted sales, where handpicked buyers are normally expected to take all their contracted allocations at a price set by De Beers, or face potential penalties in the future. But with prices in free fall around the world, the one-time diamond monopoly has been forced to allow more and more flexibility, finally removing the restrictions altogether.
The concessions are the latest in a series of increasingly desperate moves across the industry to stem this year’s plunge in diamond prices, after slowing consumer demand left buyers stuck with swelling inventories. De Beers’s great rival, Russian miner Alrosa PJSC, already canceled all its sales for two months, while the market in India — the dominant cutting and trading center — had self imposed a halt on imports.
At the recent De Beers sale, its buyers, mostly from India and Antwerp, seized on the unusual flexibility, between them buying just $80 million of uncut gems. Normally De Beers would have expected to shift between $400 million and $500 million at such a sale. Outside of the early days of the pandemic — when sales were halted altogether — the company has not sold so few gems since it started making the results public in 2016.
The speed and severity of the collapse in diamond prices caught many by surprise.
The industry had been one of the great winners of the global pandemic, as stuck-at-home shoppers turned to diamond jewelery and other luxury purchases. But as economies opened up, demand quickly cooled, leaving many in the trade holding too much stock that they’d bought for too much money.
What looked like a cool down quickly turned into a plunge. The US economy, by far the industry’s most important market, wobbled under rising inflationary pressure, while key growth market China was hit by a real estate crisis that sapped consumer confidence. To make things worse, the insurgent lab-grown diamond industry started making major gains in a couple of key segments.
While there are many different diamond categories, broadly prices for wholesale polished diamonds have tumbled about 20% this year, firing a more dramatic fall in rough — or uncut — stones that have plunged as much as 35%, with the steepest declines happening though late summer and early autumn.
The industry’s response was to choke off supply in an almost unprecedented way, which finally seems to be working.
Prices at some smaller tender sales and auctions have risen between 5% and 10% in the past week as shortages of some stones start to emerge. With Indian factories set to reopen next month after prolonged Diwali closures, there is now renewed confidence that the worst has passed.
“The diamond industry has successfully taken action to stabilize things,” said Anish Aggarwal, a partner at specialist diamond advisory firm Gemdax. “That now creates a window to rebuild confidence.”
The plunge in diamond prices has coincided with weakness across the luxury space. LVMH Moet Hennessy Louis Vuitton SE, the luxury titan with 75 labels ranging from Christian Dior to Bulgari, has disappointed investors this year as China’s recovery underwhelmed and demand from US consumers cooled, with the stock shedding more than $100 billion in value since mid April. On Friday, Cartier owner Richemont reported a surprise decline in earnings as revenue from luxury watches unexpectedly fell and high-end consumers reined in spending.
Yet there are specific peculiarities to the diamond industry that make it more vulnerable to slowing consumer demand. De Beers sells its gems through 10 sales each year in which the buyers — known as sightholders — generally have to accept the price and the quantities offered.
When prices are rising, as they did for much of the past two years, these buyers are often incentivized to speculate, betting that paying for unprofitable stones now will pay off if prices continue to rise. Buyers are also rewarded for making big purchases by being given bigger allotments in the future, known in the industry as “buying for position.”
These mechanisms often lead to speculative bubbles, which pop when consumer demand slows and polished diamond inventories build up.
In response, Alrosa stopped selling diamonds altogether for two months, while the Indian diamond sector introduced a halt on imports that will run to mid December. De Beers has allowed its customers to refuse all purchases without it having any impact on the future allocations for its last two sales of the year.
While the two dominant diamond miners have a long history of curtailing supply or letting buyers refuse some goods when demand weakens, the speed and scale of the combined actions is extremely unusual outside of a major crisis such as the outbreak of the pandemic.
While prices have stopped falling — and in some areas rising again — much will depend on the crucial holiday season, which spans from Thanksgiving to Chinese New Year, and how the big miners who have accumulated large stocks of unsold gems feed them back into the market.
There also remains uncertainty in the industry about how much of the slowdown is being driven by macro-economic weakness, versus a more worrying shift in consumer choices. Lab-grown diamonds have made rapid progress in some key segments of the market, while there are lingering concerns in the industry about whether Gen Z consumers look at diamonds the same way as previous generations do.
“We expect there to be some cyclical recovery in the diamond markets,” said Christopher LaFemina, an analyst at Jefferies. “But we believe there are also structural issues here that could lead to weaker than expected demand for the longer term.”
De Beers has signed an agreement with South Africa’s National Union of Mineworkers (NUM) that will avoid a threatened strike at the Venetia deposit.
The deal will provide workers at the South African mine with a wage increase of 7% in 2023, De Beers said last week. The employees will also receive a 6% hike in each subsequent year until April 30, 2028.
Workers will also be able to participate in the Employee Share Ownership Plans (ESOPs), it explained.
De Beers reached the agreement with NUM with the aid of the Commission for Conciliation, Mediation and Arbitration (CCMA) following four months of failed talks during which the NUM set out 10 initial demands. Three of those — related to shifts and overtime — were tabled, while six others have been settled. The wage debate was the only outstanding issue, but the breakdown in discussions drove NUM to plan a strike at the deposit. The agreement affects 1,500 of the mine’s workers.
“We are pleased that we reached a favorable outcome following a very tough negotiation process against the backdrop of challenging market conditions that continue to have an adverse impact on our business and the overall diamond industry,” said Moses Madondo, managing director of De Beers Managed Operations, which oversees the company’s mines in South Africa and Canada. “The agreement provides a measure of certainty to our employees for the next five years as we focus on ramping up the underground mine at Venetia, which is set to extend the life of mine to at least 2046.”
