Africa-Press – Botswana. The combined impact of synthetic diamonds and the shifting role of China in the global diamond market has made the last two years among the toughest for the company, De Beers vice president, Paul Rowley, has said.
Presenting the company’s latest results, Rowley noted that China, previously the second-largest source of demand, has become a net exporter. This, along with the continued rise of lab-grown diamonds, has significantly pressured the industry.
To counteract the downturn, Rowley said De Beers has taken steps to support industry stability, including reducing production, increasing marketing efforts, and focusing on synthetic differentiation.
Nascent recovery in Q1
“We’ve also had to take some very tough decisions in our own business,” he said, citing the streamlining of operations and booking of trading losses to generate cash flow and maintain purchases from producers. “These actions supported a nascent recovery in the first quarter.”
He added that while sentiment in the midstream segment has improved and synthetic differentiation has increased, uncertainty around US tariffs has paused momentum as retailers wait for clarity before restocking.
Rowley said the upstream remains the most challenged part of the supply chain, with demand for new rough diamonds still muted. The midstream has seen gradual recovery as supply and demand find better balance.
US stable, India growing, China finding balance
“Consumer demand has been steady, with US demand stable, India continuing to grow, and China starting to find balance,” Rowley noted. “However, retailers remain cautious and are holding back on restocking ahead of final tariff announcements.”
He added that synthetic diamond sales volumes continue to rise, even as prices fall. “More retailers are looking to shift back to natural diamonds due to changing economics,” he said, noting an increasing focus on fashion jewellery.
Rowley acknowledged that while sales are improving, they have come at a cost. “An EBITDA loss of several hundred million dollars represents a major transfer of value to producers, as we purchased stock at high prices and sold it at lower ones,” he said.
Larger diamonds
Despite price decreases, the average realised price remains relatively high, with larger diamonds in greatest demand due to being less affected by synthetics. Rowley said unit costs are being tightly managed, and capital expenditure has been significantly reduced – especially at the Venetia Mine in South Africa.
Looking ahead, the De Beers vice president said near-term trading conditions remain challenging due to continued tariff uncertainty, but he maintained confidence in the company’s long-term strategy.
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