Market Challenges and Industry Responses
Crisis in the Natural Diamond Market
The natural diamond industry faces its deepest crisis in decades. Prices are falling, demand is weakening, and competition from lab-grown diamonds (LGDs) and moissanite is accelerating. Sanctions on Russian goods and global economic pressures have only intensified the downturn.
- Competition from Lab-Grown Diamonds and Moissanite: LGDs are now significantly cheaper than natural diamonds and increasingly popular. In 2023, 46% of U.S. engagement rings featured LGDs—up sharply from 12% in 2019. Meanwhile, moissanite has become a highly attractive alternative thanks to its superior brilliance, ethical production, and affordability.
- Falling Prices: Oversupply and subdued demand have driven polished diamond prices lower, hurting manufacturers' margins.
- Economic Headwinds: China’s slower growth and ongoing real estate crisis have reduced luxury spending, impacting global demand.
Industry-Wide Marketing Push
To counter these challenges, major producers and African nations signed the Luanda Accord in mid-2025. Each signatory has pledged 1% of annual rough diamond revenue to fund a global marketing campaign spearheaded by the Natural Diamond Council (NDC). South Africa has officially joined this initiative, reflecting a united front among producers to revive interest in natural diamonds.
Market Botswana: Crises and Opportunity
Botswana, whose economy relies heavily on diamond revenues, has called the crisis an 'existential threat.' Yet, the country’s Karowe mine continues to yield exceptional stones, including a 1,019.85-carat diamond discovered in August 2025.
Corporate and Geopolitical Developments
- De Beers in Transition: Parent company Anglo American is divesting its stake in De Beers. Reports suggest Botswana may seek a controlling interest, reshaping the future of one of the world’s most influential diamond companies.
- Russian Sanctions: The G-7’s upcoming ban on Russian diamonds above 0.5 carats, set for full enforcement in March 2025, has already disrupted supply chains. Alrosa, Russia’s state-owned producer, reported a 25% drop in first-half 2025 revenue.
- Other Miners’ Strategies: Lucara Diamond Corp., operating Botswana’s Karowe mine, has reported significant new finds despite financial pressures. Anglo American continues its move to exit De Beers.
Changing Consumer Preferences
- Market Bifurcation: Natural diamonds are being repositioned as exclusive luxury items for high-end consumers. LGDs and moissanite are capturing budget-conscious buyers, with moissanite standing out as an eco-friendly and lifetime-guaranteed option.
- Moissanite’s Appeal: With a hardness of 9.25 (ApolloGem moissanite is 9.5 with a lifetime guarantee), it is nearly as durable as diamonds while offering unmatched sparkle. Its ethical and affordable positioning makes it especially popular among younger generations.
- Focus on Provenance: With rising concerns about ethics and sustainability, brands are emphasizing traceability and responsible sourcing.
- Evolving Habits: More consumers are purchasing jewelry for themselves and gravitating toward vintage and antique pieces. Younger buyers, in particular, demand transparency and sustainability.
Outlook
The natural diamond market is at a crossroads. While lab-grown diamonds and moissanite capture mainstream buyers, natural diamonds are being redefined as rare, heritage-rich luxury items. Moissanite continues to surge as the smart choice for eco-conscious and value-driven consumers. The global marketing push led by the NDC, along with renewed emphasis on provenance, may help restore confidence—but the industry’s future depends on how quickly it adapts to shifting consumer values and global economic realities.
