During a recent interview at the Mining Indaba conference in Cape Town, South Africa, De Beers Chief Executive Officer Al Cook revealed encouraging signs of recovery in the American diamond market. Speaking with Bloomberg Television, Cook noted an 8% year-over-year increase in US diamond jewelry demand during November and December.
The diamond industry executive took aim at the growing presence of laboratory-created diamonds, particularly those manufactured in China, comparing them unfavorably to natural stones. Cook emphasized the vast difference in formation time, stating that while natural diamonds develop over a billion years, their synthetic counterparts are produced in Chinese facilities within just three weeks using microwave technology.
The diamond sector has been grappling with dual challenges: diminished consumer spending power during a luxury market downturn and increased competition from laboratory-produced diamonds that have flooded global markets. This market pressure has driven diamond prices to historic lows, according to the Diamond Standard Index, with data extending back to early 2002.
In related developments, Anglo American Plc’s Chief Executive Officer Duncan Wanblad addressed the company’s relationship with its De Beers unit. Speaking on Monday, Wanblad indicated that while Anglo American had initially planned to divest from De Beers by the end of 2025, current market conditions might extend this timeline into 2026. He emphasized that the struggling diamond business would not be permitted to impede Anglo American’s restructuring efforts.
Cook’s interview also highlighted significant shifts in global market dynamics, particularly regarding Asian markets. India has emerged as the second-largest diamond market, surpassing China. While
acknowledging this shift, Cook maintained an optimistic long-term outlook for Chinese market recovery, noting that India has effectively filled the market position previously held by China.
The challenging market conditions are reflected in the record-low diamond prices, marking a significant downturn in the industry’s fortunes. This decline has been driven by various factors, including changing consumer preferences, economic pressures, and the increasing acceptance of laboratory-created diamonds in the marketplace.
Cook’s criticism of laboratory-grown diamonds was particularly pointed, using an art analogy to distinguish between natural and synthetic stones. He argued that comparing laboratory-grown diamonds to natural ones was akin to displaying a poster of the Mona Lisa in an art gallery and presenting it as the original masterpiece. This comparison underscores the industry’s effort to maintain the perceived value and uniqueness of natural diamonds in the face of growing competition from synthetic alternatives.
The executive acknowledged that the traditional diamond industry needs to improve its messaging about natural diamonds, suggesting that better communication about their unique characteristics and formation process could help maintain their market position against synthetic competitors.
The situation reflects broader changes in the luxury goods market, where traditional valuations and consumer preferences are being challenged by technological advances and shifting market dynamics. The industry’s response to these challenges, particularly in
differentiating natural diamonds from laboratory-created alternatives, will likely play a crucial role in shaping its future trajectory.