Editor’s Note
The latest data paints a stark picture of a global diamond industry in crisis, with plummeting revenues, mounting inventories, and widespread operational cutbacks. This report examines the severe pressures facing major producers.
The latest quarterly data reveals the severity of the crisis in the global diamond industry: revenue at De Beers (owned by Anglo American), the world’s largest diamond producer, plummeted by 44%, with a backlog of inventory reaching $2 billion. Its joint venture plans to lay off over a thousand employees. Sanctioned Russian company Alrosa saw its profits plunge by 77%, with several major mines suspending operations. Petra Diamonds is selling assets to survive after a 30% drop in sales. Many other diamond companies are also in distress.
The global diamond industry is experiencing an unprecedentedly rapid decline. Tech entrepreneur and scholar Leanne Kemp points out that while some analysts believe the current difficulties are not yet fatal to the diamond industry, phenomena such as plummeting revenue, stalled production, and the questioning of diamonds’ cultural value and economic status indicate that the entire industry is collapsing, not just experiencing a temporary downturn. These are not isolated incidents but manifestations of the comprehensive failure of the industry’s cost structure, cultural identity, and geopolitical foundation. The traditional narrative of diamonds—eternity, romance, and scarcity—has lost its appeal in the new era.
However, industry analyst Paul Zimnisky holds a more cautious view.
De Beers, the bellwether of the diamond industry, is facing a historic turning point. This giant, which once manipulated the marketing of diamond scarcity, has been put up for sale by its parent company. Its valuation has shrunk by $4.5 billion within a year, yet no buyer has emerged.
Regarding a way out for the industry, some have proposed repositioning diamonds as stable, tradable assets. But Zimnisky is skeptical of this, stating that diamonds are not fungible like gold. The analyst noted that the rarest, highest-quality diamonds still retain value-preserving functions, but the liquidity of the secondary market is far inferior to that of gold. For diamond-dependent economies like Botswana and Canada, he suggests that all stakeholders work together to build a new narrative: this is a luxury good and must operate according to the logic of luxury.