Editor’s Note
De Beers, the architect of the modern diamond industry, is undergoing a profound transformation. As its parent company explores a sale and it pivotsates its lab-grown strategy, these moves signal a pivotal moment for the iconic brand and the wider gemstone market.
De Beers, the protagonist of the ‘A Diamond is Forever’ myth, stands at a critical juncture of major change. In May of this year, De Beers’ parent company, Anglo American, announced plans to sell or spin off De Beers, sending shockwaves through the industry. A month later, De Beers declared it would halt production of gem-quality diamonds for its lab-grown diamond jewelry brand, ‘Lightbox’. This series of shocking news serves as a signal flare, foretelling significant changes not only for De Beers but across the entire diamond industry. Having led the global diamond market for many years as a core subsidiary of Anglo American, De Beers now faces a pivotal turning point. The focus is on whether this will lead De Beers to a new leap forward or confront it with fresh challenges.
Founded in South Africa in 1917, Anglo American is a global mining company producing a diverse range of resources including platinum, diamonds, copper, nickel, iron ore, and coal. Headquartered in London, it operates extensive businesses in South Africa, North America, South America, Australia, and Asia. In 2012, the Oppenheimer family, which held a controlling stake in De Beers, sold a 40% stake to Anglo American, increasing Anglo American’s ownership of De Beers to 85%. The remaining 15% is owned by the government of Botswana. Anglo American’s recent decision is part of a strategic restructuring to focus on its highly profitable copper and iron ore businesses. Copper, emerging as a key green material due to the growth of the electric vehicle industry and the spread of renewable energy, is seeing continuously rising demand. Anglo American plans to complete the sale of not only its De Beers business but also its platinum and coal divisions by the end of 2025. While this is a means to strengthen core operations by divesting underperforming segments, for De Beers, which has been synonymous with diamonds for over a century, it represents a serious crisis. Some are calling it ‘the end of an era’. Although luxury companies and Middle Eastern sovereign wealth funds are mentioned as potential buyers, selling De Beers is no easy task given the crisis facing the natural diamond industry.
“Given De Beers’ historical role, questions are also being raised about how the dynamics of the diamond market might change under new ownership.”The natural diamond market, already facing multiple challenges with weakened demand due to post-pandemic inflation and reduced luxury consumption, is under additional pressure from lab-grown diamonds, which are gaining popularity among price- and environmentally-conscious younger consumers. Diamond analyst Paul Zimnisky predicted that De Beers’ changes in the current crisis-ridden state of the natural diamond industry could create uncertainty in the diamond supply chain. In the past, De Beers played a role in regulating supply to prevent price declines during market downturns. However, under new ownership, a more aggressive sales strategy could be introduced. The natural diamond industry believes the best course is for a new owner to establish a long-term plan that grows the industry through appropriate investment and continues De Beers’ long legacy, rather than pursuing short-term value.
In early June, De Beers announced it would halt production of gem-quality lab-grown diamonds for ‘Lightbox’ and convert its production facility in Oregon, USA, into an industrial diamond hub. Diamonds, with their exceptional hardness and thermal conductivity, are considered an essential growth market for various high-tech and industrial applications. De Beers is expanding the application of lab-grown diamonds in diverse fields such as electronics, automotive, and aerospace to meet this demand. Launched in 2018, De Beers’ Lightbox was evaluated as an attempt to differentiate itself from natural diamonds with affordable, fashion-oriented lab-grown diamond jewelry. However, this decision to halt production can be interpreted as a strategic retreat from the fierce competition and price pressure in the lab-grown diamond market. It can also be seen as a policy to rebalance between natural and lab-grown diamonds and shift resources and investment to more profitable areas. Therefore, it is expected that De Beers will focus on reaffirming the unique value of natural diamonds and concentrating resources on core operations under new ownership.
These two announcements signify that both Anglo American and De Beers are proactively responding to a changing market environment and new opportunities. Both companies are reassessing their existing business models and seeking new strategic directions. While Anglo American sets its course, De Beers appears poised to expand its foothold in the industrial synthetic diamond market, clearly differentiate itself from lab-grown diamonds, and emphasize the unique value and tradition of natural diamonds. The conversion of the Lightbox Oregon facility is expected to be completed within the next few years, and De Beers plans significant investment in new technologies and processes to support industrial diamond production. This not only meets current market demands but also anticipates and prepares for future needs driven by technological advancement. Currently, De Beers bears the unenviable label of ‘for sale’. To realize maximum value, whether as an asset or a public company, it must prove ‘growth’. Amid market uncertainty and intensifying competition, this is a moment that demands a new vision and leadership that does not rest on past glory but prepares for the future to preserve the legacy of ‘A Diamond is Forever’.
