Inside the fightback by natural diamonds
Mbongeni Mguni | Thursday June 12, 2025 10:03
In the diamond world, traditionally, each player in the pipeline focuses on their core strengths. Producers such as Botswana focus on how they can extract diamonds most efficiently, while also taking care to bring these natural rarities from deep in the Earth up to the surface without breaking or fragmenting them and their value.
The midstream focuses on cutting and polishing these stones, shaping them into their best possible condition and enhancing their famous four Cs – Cut, Colour, Clarity and Carat. Retailers focus on creating breath-taking designs and developing the dazzling market strategies that wow consumers.
That structure has worked for decades, but the disruption caused in recent years by sanctions on Russian diamonds, global economic uncertainties and most importantly, the explosion in the production and popularity of cheaper synthetic diamonds, means the industry is facing a moment of truth and some difficult choices.
While the long-term fundamentals for natural diamonds indicate that demand will outstrip supply in years to come, due to the lack of a major diamond discovery in at least the past two decades, the industry’s troubles at the moment are due to a glut at the retail end extending back to the second half of last year.
The oversupply is associated with the dip in retail demand which in turn is related to general global economic uncertainties, the disfavour towards naturals caused by the continued flow of sanctioned Russian stones into the market, slower than projected Chinese growth and the explosion in synthetics.
For natural diamonds, the industry has decidedly shifted from being supply driven, to demand driven. For Botswana, the 55-year partnership with De Beers has essentially involved the country focussing on mining and the company shouldering the responsibility for marketing or creating demand for diamonds.
In fact, De Beers, which is the industry’s main player, spends upwards of $100 million each year in marketing campaigns, an effort that has benefitted other players up and down the diamond pipeline.
However, the turbulence in the market means all hands are required on deck and producers such as Botswana are being called upon to help create demand for the stones which are so critically important for the livelihoods of so many.
“Establishing a diamond mine is a ten, 20 or 30 year project and it’s very expensive, but at the same time, a small part of that investment must be spent to make sure someone is a consumer of those diamonds,” David Kellie, the CEO of the Natural Diamonds Council tells Mmegi. “There’s no point to that 30-year investment if you are not investing in making sure the output is going somewhere and is profitable. “That’s a growing recognition and that’s why 2025 will be a critical year for us.”
Speaking from London, Kellie – who has more than 30 years of experience leading global marketing initiatives – says the NDC has approached producers such as Botswana to help with a budget to mount a major campaign for natural diamonds next year.
The NDC is made up of mining companies that, in Botswana, include the state-owned Okavango Diamond Company. Each year, the Council carries out promotional campaigns primarily in digital media such as Tik Tok, Instagram and others around the beauty of diamond jewellery or the real world good the stones do in countries such as Botswana.
The sanctioning of Russia has meant that the NDC had to end the financial contribution of Alrosa, denting the marketing budget at a time when it was needed most. Kellie is hesitant to discuss figures or targets for the marketing campaign, but speaking to Mmegi last week, prominent industry expert, Avi Krawitz estimated that the Council was hoping to return to the $100 million annual figure it was spending before Alrosa was sanctioned.
The structural shift in the natural diamond industry means even governments need to come on board to help lift the stones out of their slump through marketing or the creation of demand.
This is particularly important for diamonds which are an emotional product whose marketing and branding needs to be nuanced and sustained.
“Any goods you buy generally are brands you are familiar with or whose value you associate with. “The more emotion is attached to the goods, the more it must be marketed and communicated. “Our challenge as an industry is that we are not even using one percent of revenues for marketing and we have to commit as an industry, not just to take the benefits of diamonds without reinvesting a small portion of that for the health, prosperity and sustainability of the industry. “We have not done that before as an industry and we are suffering from the repercussions of that.”
Kellie says thus far, the governments the NDC has approached have been receptive to the fundraising effort, despite being in the midst of a prolonged slump.
“Each government is different with different stakeholders,” the CEO says. “However, if there’s one good thing that has come out of the downturn, it’s that there’s a recognition that demand must be a priority and that although producer nations are invested in supply, we must all create demand. “We are having discussions and hoping that from the first quarter of next year, they will start turning their intent to a more specific commitment.”
The NDC has also engaged the global diamond centres such as Antwerp, Dubai, India and Shanghai to contribute to the fundraising as well as the midstream players. Recently at a major diamond conference held in Dubai, many of the industry’s players including the diamond centres agreed to support the marketing campaign.
The different diamond centres are known to be jostling amongst themselves for dominance, particularly Antwerp and Dubai, while the midstream is notoriously fragmented consisting of numerous players of different sizes and, at least in India, employing up to one million people.
Getting all the stakeholders on board means laying aside competitive instincts and gathering under the common interest of creating demand for natural diamonds.
“The industry is complicated and many players have to go through their own stakeholders (to make decisions). “But it’s a collective mission and everyone must participate,” Kellie says.