Natural diamonds have lost more than their shine. As cheaper lab-grown stones gain ground, the industry's pricing power is fading. Anglo AmericanNGLOY

is now trying to sell De Beers for roughly $1B after buying into the business at a valuation approaching $13B in 2011.

Getting into the details

Since Anglo took control of De Beers, the company has taken three impairments in three years, lowering its carrying value to $2.3B as recently as February.

The proposed buyer is the Global Diamond Consortium, a group led by former De Beers CEO Gareth Penny and including Namibia, Angola, and major diamond traders.

The structure calls for ~$750M paid upfront and a further $250M later, with additional performance-based payments after the deal closes. GDC would also inject ~$500M into De Beers as part of the transaction.

Botswana owns a 15% stake in De Beers, while the company sources roughly 70% of its diamonds from the country. The government also owns half of Debswana, its diamond mining joint venture with De Beers.

Lab-grown stones rewrote the demand curve

The crisis driving that collapse in valuation is structural, not cyclical. Lab-grown diamonds are chemically identical to mined stones and now sell at an 80% to 90% discount to natural diamonds.

Lab-grown diamonds made up just 1% of diamond sales in 2015. By 2024, that share had climbed to roughly 20%. They also accounted for 52% of engagement ring center stones sold in the US, up from 12% in 2019.

The Diamond Standard Index, which tracks investment-grade diamond prices, hit its lowest-ever level recently, with prices down 68% from their 2011 peak. Global demand for natural diamond jewelry was flat in 2025, following three straight years of decline.

The damage is concentrated in the middle of the market. Lab-grown stones have taken over the engagement ring category, particularly among middle-class buyers who now opt for a larger lab-grown stone at the same price they would have spent on a smaller natural one.

Small-scale miners in Sierra Leone have felt that directly. The country's largest diamond mine, Koidu Holdings, closed recently with the loss of 1K jobs. Retail prices for polished natural diamonds have fallen roughly 40% in four years.

Where natural diamonds still hold ground

The market is splitting. Large natural diamonds (generally those above 2 carats) have proven more resilient because consumers who can afford them have not switched to lab-grown alternatives.

Natural diamonds between 2.5 and 2.74 carats were the fastest-growing size category in 2025, with unit sales up 19%.

Elongated shapes like oval and marquise cuts have seen price increases of roughly 25% over several years.

Off-color stones marketed under names like champagne or cognac have also found an audience, with half-carat brown diamond unit sales up roughly 200% year-over-year in May.

Below roughly 2 carats, most natural diamond categories contracted in 2025.

What De Beers own data confirms

De Beers' Q2 2026 production report confirms the pricing pressure is ongoing. The consolidated average realized price fell 32% to $105 per carat in H1 2026 versus H1 2025.

Consolidated rough diamond sales revenue dropped 44% year-over-year in Q2 to $665M. Production itself was up 88% in Q2, largely due to a maintenance shutdown in the prior-year comparison period, but higher output is landing into a market where prices keep falling.

De Beers flagged that synthetic lab-grown diamonds continued to affect demand for lower value natural diamonds throughout the period. A proposed production pause at the Venetia mine in South Africa is planned for the second half of the year.

Industry analysts note that lab-grown diamond prices could fall a further 50% to 80% as manufacturing scales in China and India, which would put additional pressure on natural stone pricing across all categories.

The industry's challenges are becoming harder to explain away as cyclical. The signs point to something more permanent.