Diamond Dudes Episode 5 looks at the strange split in the diamond market: luxury jewelry is growing, while diamond mines are being shut down. Here’s how the three view the situation.
There is a question that keeps coming up in the diamond business: If people are increasing their spending on diamond jewelry, why are diamond mines closing? It sounds like a contradiction.
Luxury jewelry is having a good year. Jewelry is outperforming fashion and other categories at several major luxury houses. Some Hong Kong jewelers are reporting double-digit growth. Even the mood at the World Diamond Congress in Singapore was more positive than it had been for some time.
And yet, during that same week, De Beers announced plans to suspend operations at the Venetia diamond mine in South Africa. Soon after, Burgundy Diamond Mines announced the closure of Ekati in Canada, while Petra Diamonds was dealing with the future of Finsch.
That was the starting point for Episode 5 of Diamond Dudes, where Rob Bates of The Jewelry Wire, Avi Krawitz of The Diamond Press and Edahn Golan of Tenoris discussed what is happening to diamond demand, natural diamonds, lab-grown diamonds, luxury jewelry, and the economics of mining.
The Luxury Jewelry Market Is Growing, But Not Everywhere
One of the most important points from the conversation is that saying “jewelry is doing well” doesn’t tell us very much. What jewelry? At what price?
And, perhaps most importantly, what kind of diamonds are in it?
Tenoris data showed the first signs of the current shift almost a year before it became obvious. The improvement has been concentrated toward the higher end of the market. Consumers are spending more on expensive pieces while unit sales across much of the market remain under pressure.
That helps explain the paradox. A luxury customer spending $20,000 on a piece of luxury jewelry is very good news for a jeweler. It doesn’t necessarily help a mine producing run of mine that includes millions of carats of smaller, lower-value diamonds.
As Avi put it during the podcast, there are “pockets of strong demand,” but the recovery is not broad-based. Large parts of the diamond market are still struggling, and prices continue to decline in those categories.
So the diamond market isn’t simply up or down, it is splitting.
Why is De Beers Closing Venetia?
Venetia makes that split particularly easy to see. De Beers has invested billions of dollars in converting Venetia from open-pit to underground mining. It is a major mine, with the potential to produce several million carats a year. But its production profile matters.
A large share of Venetia’s output consists of smaller, lower-value diamonds. Those are the goods that have been under the greatest pressure in the last year.
So De Beers is suspending operations for two years and will reassess the market before deciding whether to open again.
There is a brutal economic logic to this. Underground mining is expensive. Much more expensive than open-pit mining. The transition itself has cost more than initially expected, and the industry has seen similar problems at other mines that went underground.
If the diamonds coming out of the ground are selling for less while the cost of getting them out is rising, eventually somebody has to ask whether the mine still makes economic sense.
But there is another side to the Venetia story. Around 4,000 jobs are tied directly to the mine, and the surrounding community depends heavily on it. Closing a mine is therefore not just a line in a production forecast. It affects workers, suppliers, businesses, and an entire local economy. Edahn also noted that if the mine closes for two years, there is a good chance that the company’s local office will close too.
That is easy to lose when we talk about diamond production in millions of carats.
Three Iconic Diamond Mines, One Uncomfortable Trend
Venetia is not an isolated case. Each of the three mines has its own history and its own problems. Ekati, for example, had issues involving depletion and debt. Venetia has had the enormous cost of its underground transition. Finsch has its own operational and economic challenges.
But the broader issue is the same. The natural diamond industry built a huge production system around a market that is no longer behaving the way it once did and now needs to make a transition. The diamond jewelry consumer has changed.
What Can The Diamond Industry Learn From Luxury Brands?
Luxury houses are selling jewelry very effectively right now. How are they doing so well?
Part of the answer is that they don’t really sell “jewelry.” They sell Cartier. They sell Tiffany. They sell Hermès. They have a brand, a history, a visual identity, and a very clear idea of what the customer is buying. Their advertising is also different. As Avi pointed out, even a simple luxury jewelry advertisement can be entertaining enough that you actually want to watch it.
The diamond industry has traditionally taken another route. It has marketed the category. A Diamond Is Forever is an obvious example. It was enormously successful and changed the diamond business.
But there is a problem with category marketing today: it is difficult to differentiate something that everyone can sell.
This naturally led us into the industry’s long-running question of branding. For decades, the jewelry store itself was often the brand. The consumer trusted the retailer, and the retailer’s reputation helped sell an unbranded diamond.
But it becomes harder when consumers can compare thousands of diamonds online, encounter lab-grown diamonds that look essentially the same, and see enormous differences in price.
We talked about De Beers’ old Supplier of Choice strategy, which tried to push the industry toward stronger brands and more differentiation. The idea was not completely wrong.
Rob recalled an argument made by a De Beers executive: imagine walking into a perfume store where every bottle was simply “perfume,” with no Chanel, Dior, or other brands. The product category would be far less interesting.
The diamond industry has spent decades trying to sell the category. Perhaps it needs to sell more reasons to choose one product over another.
Of course, no conversation about the current diamond market can get very far without talking about lab-grown diamonds.
“We Underestimated Synthetics”
The three discussed Anglo American CEO Duncan Wanblad’s recent comments that they underestimated lab-grown’s impact.
The Dudes had different views on this. They have been discussing lab-grown diamonds for many years. Industry executives were discussing the potential threat long before consumers were buying them in significant numbers. Companies were already worried about what laboratory-grown diamonds could do to inventory values more than a decade ago.
And one particularly important assumption turned out to be wrong: that consumers would not want lab-grown diamonds for engagement rings. As Rob noted, as prices have fallen, cheaper lab-grown diamonds have become stronger, not weaker.
The discussion also moved into an interesting question: will lab-grown diamonds have the same impact in Asia? Edahn pointed out that consumers in markets such as China and India tend to be more value-oriented than price-oriented when buying jewelry. A lower price does not automatically create the same appeal when the product is expected to represent value, status, or an asset.
That doesn’t mean lab-grown diamonds won’t sell in those markets, only that they may occupy a different position.
And that is something the diamond industry needs to understand better: there isn’t one global consumer.
The Vietnam Scandal Shows What Happens When Trust Disappears
We discussed a major diamond scandal in Vietnam involving smuggling and the alleged manipulation of laboratory reports and diamond inscriptions.
The details are disturbing. But the bigger issue is consumer trust. Vietnam is a relatively small diamond market. The damage, however, illustrates the possible fragility of a positioning.
Natural diamonds are often sold partly on the idea that they are rare, authentic, and capable of retaining value. If consumers cannot trust that the diamond they bought is actually the diamond they were told they bought, that entire proposition starts to unravel.
As Rob said during the podcast, the episode demonstrates just how dependent the diamond business is on confidence.
The issue is that demand is becoming more selective; however, the supply side of the business was built for a much broader market. And that is why a luxury jewelry boom can coexist with mine closures.
That’s what we talked about in Episode 5 of Diamond Dudes, from luxury jewelry and diamond mine closures to lab-grown diamonds, De Beers, branding, consumer trust, and the future of the natural diamond industry.
And, yes, we also managed to talk about 1930s De Beers advertising, synthetic diamonds, H.G. Wells, and the possibility that there is a parallel universe where Lachnite became the product.
Where to Watch and Listen
Listen to episode 5 of the Diamond Dudes podcast for the full discussion on mine closures, top selling price points, and lab-grown diamond expansion expectations in today’s jewelry market. The podcast is available on major podcast platforms, with new episodes released monthly. Follow, share, watch, listen, and subscribe
Watch on YouTube: Episode 5 is available on YouTube,
Listen on Your Favorite Podcast Platforms: Stream or download the audio episodes on major podcast networks, including Spotify and Apple Podcasts,
More platforms: Our RSS and other links.
Connect and Submit Questions: Have questions or feedback for the hosts? You can reach the team directly or inquire about advertising opportunities by emailing DiamondDudesPodcast@gmail.com.
The Diamond Dudes podcast is available on major podcast platforms, with new episodes released monthly. Follow, share, watch, listen, and subscribe
