Shine on you crazy diamond!

Mbongeni Mguni | Tuesday February 3, 2026 13:01

The news of my death are greatly exaggerated, legendary American writer, Mark Twain famously wrote.

Diamonds are probably saying the same thing, after a bleak report emerged from the Finance Ministry, warning of a possible “non-recovery” for the precious stones.

“The recovery in mineral revenue is expected to be prolonged with receipts anticipated to remain below post-pandemic recovery levels,” technocrats wrote in the Budget Strategy Paper. “The shortfall is likely to persist over the medium to long term with a possibility of a non-recovery or partial recovery due to the ongoing structural challenges related to declining prices, competition from lab grown diamonds, rising production costs and changing consumer preferences in the diamond market.”

Terrible news indeed, but diamonds over the decades have proven as stubborn as they are hard. After all, you would not expect any less from a mineral carried from the Earth’s core over thousands of kilometres in a journey lasting millions of years!

Sealing the deal

One reason why the death rumours around naturals are greatly exaggerated has to do with the two powers at the centre of the global trade, namely Botswana and De Beers. The signing of the new ten-year deal last February represents the industry’s single most valuable covenant for supply into the medium and long term, from which any marketing efforts around rebuilding demand can be supported.

While it is absolutely correct to say that demand creation is of utmost importance to the industry at the moment as it fights for survival against synthetics, it is also true that high quality, traceable stones of global ethical repute are essential to meet whatever demand is created through the marketing efforts.

The sealing of the deal also gives De Beers a platform from which to begin clawing its way back to its former position as the ethical heart of the diamond pipeline, the “scale factor” spoken of by experts and critical for mounting global marketing campaigns to create demand for natural diamonds.

“There has been a lack of leadership in the industry, such that the deal between government and De Beers took six years to finalise,” a leading diamond industry analyst told Mmegi recently on condition of anonymity due to their leadership position. “The fact that Anglo is selling De Beers is a sign of a loss of leadership as well. “In this business, you need an industry leader and De Beers is no longer what it needs to be. “How do you make it that scale player once again?”

The executive continued: “Before when De Beers had scale, it could put $200 million into marketing; they had the power for that. “The first point is working together and that’s why there is positivity around Botswana and Angola meeting, but the industry is also required to come to the party. “Working together gives you scale and that’s when you can put real money into this.”

De Beers and Botswana are anchoring the Luanda Accord, an agreement amongst diamond producing nations and companies to contribute to global category marketing under the Natural Diamond Council (NDC). Angola’s two main diamond companies last week announced that they would also contribute to the campaigns.

The settlement of Anglo American’s exit from De Beers will also ease the speculation around the demise of natural diamonds, experts say. Renowned diamond journalist, Rob Bates, said the takeover of De Beers was one of the main factors that will determine the direction of natural diamonds this year and beyond.

“What happens with the purchase of De Beers and what's going to happen, I think will bring much-needed stability to the industry because they've done a lot of interesting marketing campaigns,” he told a recent virtual hosted by Avi Krawitz, a prominent diamond industry analyst. “The thing is that you need to have sustained interest in the campaigns and you just can't just do it as a one-off. “That’s very hard to do it when the business is in flux.”

Anglo American is due to finalise a shortlist of bidders for its 85 percent stake in De Beers soon, with the Government of Botswana, Angola, Namibia and consortiums led by former De Beers’ executives, known to be in the running.

Off the shelf

Another sign that reports about diamonds’ demise may be premature, can be seen in the stories on the shelves.

While the bottoming out of synthetic prices is a well-known trend seen over the years, accompanying this has been an increasing appetite amongst buyers of natural diamonds to accept higher prices for certain stones.

Analysts say this split is related to the long-awaited “bifurcation” of the diamond market, a term that essentially relates to the splitting of the market into natural diamonds which are positioned as rare, luxury, ethical and “developmental good” heritage items, versus synthetics which are the fashion items.

According to Tenoris, the sole provider of detailed U.S jewellery retail data, using sales and purchase activity from 2,500 U.S specialty outlets, trends indicating the split in the market continued last year.

“Diamond jewellery did well in the U.S jewellery market in 2025, with average spending per item soaring more than 10% to $2,739. “While overall sales rose, key components underperformed. Loose natural diamond sales declined, despite a rise in the average price consumers spent on them. “Jewellery set with lab-grown diamonds were on a steady path of rising revenue and unit sales, while average prices kept sliding,” the firm said in a recent update.

Tenoris researchers said while loose natural diamond sales were down in 2025, the average purchase price per unit increased 6.3% year over year to $11,000, driven by softer sales at lower price points and a shift toward larger diamonds, with the average size reaching 1.46 carats.

“Consumer interest in larger diamonds over the past year has made 2-carat stones the second most popular size, following a five percent increase in units sold. “The ongoing decline in diamond prices has clearly supported this trend.”

According to Bates, bifurcation in the U.S market is becoming clear. The United States is a key market for natural diamonds, traditionally accounting for 54 percent of annual demand.

“One kind of good thing that the industry is looking at is the fact that, in the United States at least, I think the market's really bifurcating, not just as far as natural versus lab-grown, but the incomes are bifurcating. “So you talk to wealthy consumers and they're going to spend a lot and they're planning to still spend a lot and they're doing very well. “Lower and middle-income consumers are not doing well and so, I mean, that has certain benefits for lab-grown, but I think it has certain benefits for natural, because if the high end is very strong and the kind of Tiffany and Cartiers are doing very well as we have seen that throughout the year, are doing very well, I think that's going to bode very well for natural,” he said.

While the natural diamond industry’s focus is naturally the U.S, other signs elsewhere in the world support the argument that there is a resilience within diamonds, defying the rumours of their death.

De Beers CEO, Al Cook, recently told Mmegi that besides India which has overtaken China as the second largest market for diamonds, there are other bright upcoming prospects in South-East Asia.

“The Middle East is growing strongly at the moment,” he said in an exclusive interview. “We have opened up a new store in Dubai and that's an exciting growth market and we'll keep an eye on the markets across the Middle East. “Beyond that, we actually see Southeast Asia as a real source of growth and countries like Indonesia, Vietnam, Thailand are places that are growing in diamond demand at the moment. “But the real story is all about India. That's the real growth market on the planet at the moment.”

India marks a full circle turn for diamonds. Historically, value was first assigned to the shiny stones in India, where alluvial diamonds were mined as far back as 6,000 years ago.

“India is enjoying double-digit growth over the last three years in terms of diamond demand,” Cook said. “That reflects the fact that India is growing so strongly as a country, growing so strongly as an economy. The GDP is rising; the stock markets are rising and Indians love diamonds. “You know, this was the country where diamonds were first discovered, the country where they were first worn and I think we're very fortunate that the world's fastest-growing economy has such a long, millennia-long love for diamonds. “So it's a match made in heaven. We actually see India staying as the second-biggest market in the world after the United States. And even over time, India could overtake the United States.”

Through the generations

Arguably, the major defining factor for the future of natural diamonds is their appeal and uptake by Gen Zs, that cynical, questioning and “woke” demographic that is today the most important consumer segment for all types of diamonds.

Hate it or love it, Gen Zs – known (correctly or incorrectly) for being difficult, fussy and hard to connect with for the older generations – are the ones getting jobs, getting married, starting families.

In other words, they are the ones buying engagement and bridal rings, a category of the market that makes up the majority of sales by value for the natural diamond industry.

Gen Zs, a generation born between 1997 and 2012, are also the ones buying up fashion jewellery, the category now being dominated by synthetics.

Gen Zs are known for believing they are “woke,” meaning they have higher sensitivities to environmental, social and governance impact considerations in their spending choices. The typical Gen Z will ask questions about the origin of their coffee beans at a restaurant and demand answers around ethical sourcing.

However, being “woke” also means, where the generations from Baby Boomers to Millennials, bought into the natural diamond marketing strategies of yesteryear, Gen Zs believe they can “see through” the magic.

Gen Zs are naturally sceptical of global marketing campaigns, mistrustful of global corporations and doubtful of their claims.

The challenge for De Beers, Botswana and other players in the industry, is to reach this demographic with authentic, sustained, nuanced and targetted marketing that goes beyond the “Magic Bullet” theory of communication where information is “injected” into a passive audience and the audience responds in the manner in which the “injector” intended.

This where terms such as the “attention economy” and “influencer marketing” need to come in for the NDC and its Luanda Accord partners who are contributing one percent of their revenues from diamond mining for the global campaign to resuscitate demand.

The importance of reaching the Gen Zs with targetted, nuanced marketing cannot be overstated. The expert who spoke to Mmegi on condition on anonymity provided startling context.

“We should be more worried that synthetics are now 40% of the engagement market, because that segment of the market is where we first get people ‘addicted’ or sold onto diamonds, then in the future we can sell them ear studs, bracelets and other natural diamond jewellery easier. “The challenge is that if you have not gotten this market at 25 to 35 years of age and they find a fake stone three times the size for next to nothing, you’ve lost this market for the next 40 years. “Again, if this 40% of engagement market was happening in South Africa, no one would care, but the U.S is a trendsetter and if the U.S market says ‘this is trending,’ the world follows,” he explained.

Cynics are plenty on the efforts to apply a defibrillator to natural diamonds, but help is on its way from an unexpected source, because besides the NDC’s plans, within the Gen Zs themselves, something is shifting.

More and more Gen Zs are prioritising authenticity in their spending choices, thanks to the rise and global domination of Artificial Intelligence (AI). From AI videos, AI songs, AI pictures, AI poems, AI art and the difficulties of distinguishing them from human effort, more people are become not only frustrated with but disgusted by the artificial.

Gen Zs, which is the AI generation, is surprisingly pushing back against the artificial and demanding more human, more authentic, more impactful products and content.

Like AI, synthetic diamonds are a cheap and unimpactful copy of the original. Where natural diamonds have transformed economies, educated children, provided healthcare and become eternal symbols of love, synthetics have no resale value, often carry dubious environmental credentials and like AI art, are pushing real people into poverty.

The term ‘AI slop’ has grown in popularity and usage as Gen Zs and other generations pushback against the growth of the artificial over the authentic, especially the tendency by the fake to pretend to be the real.

Since November, TikTok, which is Gen Zs go-to social media platform, has explored giving users the power to reduce the amount of AI-made content on their feeds, with the UK Guardian quoting the platform as saying it hosts more than one billion AI videos.

“The change, which is being tested over the next few weeks before a global rollout, comes as new video-generating tools such as OpenAI’s Sora and Google’s Veo 3 have spurred a surge in AI content online,” the Guardian reported in November.

The publication also revealed in August that nearly one in 10 of the fastest-growing YouTube channels globally only show AI-generated videos.

The push for authenticity and impact echoes the natural diamond industry’s traceability, provenance and 'diamonds for development' arguments cited in the fight against synthetics.

The latest trends are critically important as they come amidst a grandscale transfer of wealth, particularly in the U.S.

Known as the Great Wealth Transfer, the economic phenomenon is an intergenerational wealth transfer in which the Baby Boomer generation (born between 1946 and 1964) is leaving significant wealth to their heirs. By some estimates, Baby Boomers and the Silent Generation (born 1928 to 1945) will bequeath a total of $84.4 trillion in assets through to 2045, with $72.6 trillion going directly to heirs.

Research from diamond industry legend, Martin Rapaport, indicates that Gen Z is the generation set to receive trillions of US dollars in inheritance in the medium to short term in America, as the current generation of elderly people bequeath their children.

Luxury brands, whose spend millions of dollars forecasting such trends, expect that the Gen Zs will be far more scrupulous with this inheritance and may not follow the old folks in buying classic diamond jewellery, despite the store of value this represents.

The challenge for natural diamonds is to tap into this Great Wealth Transfer because any “lost generation” for diamonds is a lost future for diamonds.

Between the balanced production and marketing efforts of De Beers, Botswana and the Luanda Accord members, combined with growth in the India and South East Asia as well as the changing tastes of Gen Zs, the shiny stones first spotted in Motloutse River, are not ready to die yet.

Shine on you crazy diamond!

“Remember when you were young? You shone like the Sun Shine on, you crazy diamond Now there's a look in your eyes Like black holes in the sky Shine on, you crazy diamond” – Pink Floyd, 1975