Editor’s Note
As precious metals markets experience volatility, the diamond industry faces a more profound structural shift. This article examines the dramatic fall of De Beers, once a near-monopoly, and the pressures from lab-grown alternatives that are reshaping the entire sector.
While gold and silver prices have recently surged to new highs before a sharp correction, the global diamond market has long been in a deep freeze. Natural diamond prices have plummeted, and the impact of lab-grown diamonds has turned even industry giants into ‘hot potatoes’ desperate to offload. According to the Financial Times, Duncan Wanblad, CEO of Anglo American, the parent company of De Beers, indicated a high likelihood of selling De Beers to a “public-private partnership consortium,” with multiple African governments as potential buyers. This could mean that the behemoth, founded by South African Cecil Rhodes in 1888 and once dominating global diamond supply, may be sold back into the hands of African nations. This could even symbolize a pivotal shift in the diamond industry from colonial and multinational mining giant dominance towards greater control by source countries.
According to the latest data from the Diamond Standard Index, natural diamond prices have crashed over 60%, falling from a peak of $6,720 per carat in 2022 to the current $2,670 per carat. Reasons include cheaper lab-grown diamonds, a slowdown in Chinese luxury consumption, and US import tariffs on India, a major global diamond polishing hub, which have disrupted diamond circulation.
Furthermore, alongside a sharp decline in marriage rates, young consumers’ attachment to traditional diamonds has waned. Many couples now prefer lab-grown diamonds, as the same budget can buy a larger or higher-quality stone. Some analysts warn that the market must adapt to lower sales and values for the foreseeable future.
Against this backdrop of a collapsing diamond market, De Beers’ performance has been severely impacted. Anglo American warned this month that it may be forced to write down De Beers’ asset value again when announcing its annual results next week, which would be the third such write-down for the company in three years.
Regarding the potential sale of De Beers, Wanblad stated the process is “relatively advanced” and he hopes to complete it within this year. He revealed that the final buyer will “almost certainly” include the Government of Botswana, which already holds a 15% stake in De Beers. Botswana’s President Duma Boko has repeatedly expressed a desire to increase this stake.
Besides Botswana, other African diamond-producing nations are also showing interest. Angolan officials revealed at a South African mining conference their intention to acquire about 20% to 30% of De Beers. Namibia, which produces about 10% of De Beers’ diamonds, is reportedly also considering bidding for a minority stake. Wanblad noted that the final buyer is likely to be a consortium of government and private entities, with Botswana being the key deciding factor as they are a core shareholder in the business.
Despite criticism from some analysts that the group is selling assets at a market bottom, Wanblad responded:
He also admitted that the transaction’s timeline depends primarily on the buyer’s financing progress, not market conditions.
Other analyses suggest that if the transaction is ultimately taken over by a consortium of African governments and private entities, it would not merely be an asset transfer. It would symbolize a key turning point for the diamond industry, shifting from colonial and multinational mining giant dominance towards greater control and voice for source countries. For African nations, this is an opportunity to reclaim control over their resources. For Anglo American, it is a choice to stem losses and refocus on its core business.
