Gemological Observations: De Beers, then & now

The diamond industry just witnessed a historic shift. A couple of weeks ago, De Beers held its first sight of the cycle, and it looked radically different from anything we have seen in past years. After years of holding rough-diamond values artificially high, De Beers cut its official prices, downsized its distribution network to align with modern market realities, and shifted away from moving massive volumes and toward offering smaller boxes containing higher-quality rough.

• A Shrunken Sightholder List: The exclusive sightholder list was slashed from 70 down to just 45 global clients.

• The U.S. Footprint: Only four sightholders remain in the United States. This ultra-exclusive group consists of two major retail outlets—Tiffany & Co. and Signet Jewelers—alongside Grandview Klein Diamond Group and Lieber & Solow (which focuses on industrial diamonds).

• Reduced Transparency: Alongside modified assortments, De Beers transitioned to single-line invoicing. While this makes specific category pricing less transparent to outsiders, it allows invoicing to align much more fluidly with actual market levels.

• Deep Discounts: Rough prices at this sight reflected a massive market correction, with discounts ranging anywhere from 5% to 50%. This finally brings official De Beers rough pricing close to secondary market values for the first time in years.

The burning question on every jeweler's and dealer's mind is clear: Will my existing inventory lose its value? The short answer is no, not immediately. Polished prices on the market will gradually realign to match current market-retail sales trends, especially since older polished goods are priced on existing higher priced stock. However, we will see a significant impact on smaller, highly commercial polished diamonds – sizes and qualities from 0.30ct-1.00ct ranging from G-J color range and SI quality range – which were the standard engagement ring goods that have now been taken over by synthetic diamonds. 

How it All Began

The campaign to bring diamonds to the masses—shifting them from an exclusive luxury for the wealthy to an essential rite of passage for everyday people—was masterfully engineered by De Beers, a diamond empire historically controlled by the Oppenheimer family and later majority-owned by Anglo American.

Launched in the late 1930s and perfected in the post-WWII era, their strategy remains one of the most successful psychological marketing campaigns in history. Here is how they built the brand:

• "A Diamond Is Forever": This iconic slogan forged an unbreakable emotional link between the physical indestructibility of a gemstone and the concept of eternal love. By doing so, De Beers established diamonds as permanent family heirlooms. This brilliant psychological trick successfully prevented a secondary market from developing, allowing natural diamond prices to stay artificially high.

• The "Salary Rule": De Beers targeted middle- and working-class men by standardizing a strict financial benchmark to prove their love. The campaign originally mandated spending one month’s salary on an engagement ring. Decades later, this was aggressively marketed up to two months' salary (and up to three months' salary in the Japanese market).

• Hollywood Product Placement: Rather than relying solely on standard print advertisements, De Beers systematically arranged for Hollywood elite and glitterati to wear massive, head-turning diamond jewelry at high-profile events.

• Globalization: Once the American mass market reached saturation, De Beers applied this exact same psychological playbook to alter cultural courtship and marriage traditions worldwide.

  
  

  

More recent campaigns include:

• The 3-stone ring (coined as “Past, Present, and Future”)

• The right-hand ring (targeted to single women buying for themselves)

• “Forever Present” (tailored to millennial and gen z buyers)

• “Desert Diamonds” (warm white, champagne and amber tones)

• “Blockchain Traceability” (empowering modern consumers to utilize digital tracking tools to pinpoint the exact natural mine of origin)

Less successful were:

• “Forevermark and Origins brand” (shifts from the traditional wholesale network to sell directly to consumers via elite luxury boutiques this was a partnership with LVMH)

• “Real is Rare” & “Seize the Day” (intended to stop the price dropping in natural diamonds)

• “Lightbox” (this was a major initiative for lab-grown diamonds – their tagline was “For moments, not milestones” after 7 years they closed in the summer of 2025; Element Six was the company who manufactured the synthetic diamonds and have transitioned into industrial usage.)

The Architecture of the Sightholder System

To protect diamond values from crashing during the Great Depression, De Beers established its modern sightholder system in 1934. Before World War II, the cartel selected its sightholders through an ultra-closed distribution network. Invitation was granted based strictly on absolute loyalty, pristine financial strength, and the proven ability to hoard massive diamond inventories during severe market crashes.

This distribution arm was organized under the Central Selling Organization (CSO), which was later rebranded as the Diamond Trading Company (DTC). For over a century, the core structure remained unchanged: chosen clients were invited to purchase rough allocations exactly 10 times a year.

In the early decades, these merchants hailed almost exclusively from the United Kingdom, Belgium, the Netherlands, and South Africa. Leading up to WWII, there were roughly 200 to 300 sightholders globally. Post-war, this condensed to about 100 elite clients situated across primary diamond hubs like London, Antwerp, New York, Tel Aviv, Bombay, and Johannesburg. The system reached its absolute zenith in the 1970s, boasting around 350 companies under the De Beers umbrella.

The Modern Mining Landscape

Fast-forward to the present day, and the old monopoly has fractured. The global extraction of rough diamonds is now dominated by six major mining powerhouses:

1. Alrosa: The Russian giant, whose current output is heavily directed toward industrial applications.

2. Rio Tinto: A massive global mining conglomerate, famously known for its ownership of the historic Argyle mine.

3. Debswana: An equal, highly influential joint partnership between the Government of Botswana and De Beers.

4. Lucara Diamond Company: A forward-thinking Canadian company operating the Karowe mine in Botswana. Karowe is legendary for yielding colossal, gem-quality diamonds. Notable recoveries include an unnamed 2,036-carat stone and The Motswedi, a staggering 2,492-carat diamond that officially surpassed the historic Cullinan diamond in size. The Motswedi is currently being evaluated in Antwerp, Belgium, ahead of manufacturing. Lucara recently announced that this prolific mine has now recovered its tenth diamond exceeding 1,000 carats.

5. Petra Diamonds: A UK-based mining group operating highly coveted territory in South Africa, including the iconic Cullinan and Finsch mines.

6. Glencore plc: One of the world’s absolute largest diversified resource companies, operating in the marketplace as a vertically integrated commodity giant.

Today: How De Beers Lost Control of the Rough Market

De Beers lost its absolute grip on the rough-diamond market because global demand collapsed, synthetic lab-grown diamonds surged, and the historic supply-control system buckled under the weight of severe oversupply and weak global sentiment. Consequently, De Beers can no longer single-handedly dictate prices or artificially restrict global supply the way it did for most of the 20th century.

1. Global Demand Collapse (Centered in China)

China was once the undisputed engine of growth for global diamond consumption, but Chinese consumer confidence has plummeted. Shifting away from discretionary luxury, Chinese buyers have heavily rotated into gold as a preferred safe-haven asset. This sharp drop in retail jewelry purchases rippled backward through the midstream cutting centers, rapidly erasing demand for polished inventory, which in turn choked the demand for rough stones.

2. Lab-Grown Diamonds Disrupted the Scarcity Model

Synthetic lab-grown diamonds (LGDs) became exponentially cheaper to produce, highly accessible, and widely accepted by younger demographics. The continuous, low-cost manufacturing capabilities of LGD factories fundamentally undermined the narrative of geological scarcity that De Beers relied upon for a century. The threat is so severe that parent company Anglo American explicitly cited a “prolonged shifting of customer preference” toward lab-grown alternatives as the primary catalyst for slashing De Beers’ book value.

3. Oversupply of Rough Inventory

Major miners—including De Beers itself—alongside midstream manufacturers accumulated massive backlogs of excess inventory. With consumer demand severely weakened, continuing to extract stones at baseline rates only exacerbated the market glut. To prevent a total freefall, De Beers resorted to halting production entirely at flagship operations, including a two-year production pause at its prominent Venetia mine.

4. The Price-Control Mechanism Broke Down

For decades, De Beers successfully controlled 80% to 90% of the world's rough diamond supply by stockpiling excess goods during downturns to maintain price discipline during its "sights." Today, surrounded by independent producers, shrinking retail demand, and synthetic alternatives, that enforcement mechanism has shattered. Forced to move unwanted, stagnant stock, De Beers did the unthinkable for a traditional cartel: they aggressively discounted their rough. Official rough-price indices fell between 12% and 25% (and up to 50% on select categories), proving that De Beers can no longer stabilize the global market through stockpiling alone.

5. Financial Strain and Strategic Retreat

Faced with eroding margins, Anglo American wrote down the valuation of De Beers for three consecutive years. The diamond business, which once stood as the crown jewel of the conglomerate, transformed into a financial liability. Anglo American's subsequent announcement of its intent to sell or de-merge De Beers sent a definitive shockwave through the trade. It signaled to the entire gemstone industry that De Beers is no longer willing or able to act as the ultimate stabilizing force of the diamond world.

A Gemologist’s Take on the Future

As a born optimist, I view these disruptive changes as a healthy evolution for our industry. Natural diamonds will never lose their intrinsic lure. While their pricing may normalize down to a more accessible baseline, at least we will hear less haggling over "how much back" from a price list. Furthermore, because De Beers has restricted the volume of its sight boxes, the persistent market glut of diamonds will shrink, and less excess inventory naturally yields a more stable market. Meanwhile, synthetic diamonds have seen their wholesale prices drop by roughly 90% over the past several years, though consumers will undoubtedly continue to buy them for their own reasons—whether driven by price, perceived sustainability, ethics, or the desire for a larger carat size.