Diamond giant De Beers has announced plans to pause production at its Venetia mine in South Africa for two years as part of ongoing cost-cutting measures. According to reports from Business Standard, the company made this announcement on Monday, with the decision not impacting its overall output goals as it would produce more stones elsewhere. The mine shutdown represents a significant operational adjustment for the diamond industry leader, as the $2.2 billion underground mine accounts for around 40% of South Africa's diamond production and represents about 10% of De Beers' global output. The decision comes despite the substantial investment already made in developing deeper diamond deposits after the open pit was exhausted. As per Mint, the downturn has forced De Beers, the world's largest diamond company, to suspend production at its Venetia mine in South Africa for two years, shortly after completing a $2.2 billion underground expansion.
The diamond industry faces what Business Standard reports as one of the deepest crises in its history, with the $80 billion sector under severe strain from the rapid growth of lab-grown diamonds. According to the International Monetary Fund (IMF), wholesale prices of lab-grown diamonds have fallen by about 90% since 2019, allowing retailers to sell the stones at much lower prices while still earning relatively high margins. The price gap is significant - a one-carat natural diamond sells for around $4,220, compared with about $800 for a lab-grown stone. A three-carat natural diamond sells for about $55,255, while a laboratory-grown stone of the same size costs around $3,735. As per Mint, De Beers' rough-diamond price index fell 20% in 2024 and another 12% in 2025, while its average realised price declined 19% in the first quarter of 2026 to $101 a carat. This has encouraged more consumers to buy larger stones and weakened demand for smaller and mid-sized natural diamonds, where buyers are more willing to switch to laboratory-grown alternatives.
India presents a contrasting opportunity for De Beers as the company's retail arm Forevermark bets on expansion to sustain growth. India is already De Beers' second-largest market globally for natural diamond jewellery, with the market valued at ₹49,700 crore in 2024 and expected to triple to ₹1.5 trillion by 2030, according to the 2025 De Beers India Diamond Acquisition Study. As per Mint, Forevermark opened its ninth store in Bengaluru on Thursday and plans to have around 100 outlets and generate $100 million in revenue over the next four years. "If we did not believe in the opportunity, there is no way we would have invested so much in retail in India," said Mallikarjuna Reddy Yarabolu, managing director of Forevermark. The brand entered India in 2011 through partnerships with local jewellers, but began opening its own flagship stores last year as it sought to move beyond being merely a diamond brand and build a full-fledged diamond jewellery business.
The shift in consumer demand has affected companies that mine natural diamonds significantly. Unlike factories producing laboratory-grown stones, natural diamond mines involve high upfront investments and fixed operating costs, making it harder for producers to adjust supply when demand weakens. According to the IMF, China and India are now the world's two main suppliers of laboratory-grown diamonds, with production of rough laboratory-grown diamonds for jewellery estimated at around 25 million carats in 2025, compared with less than one million rough carats when the segment began gaining commercial traction about a decade ago. The US Federal Trade Commission's Jewellery Guides now require marketers to truthfully represent the nature, origin, production and other characteristics of jewellery products sold to consumers, emphasizing clear differentiation between natural and synthetic diamonds. As per Mint, the growing funding is helping newer brands build retail networks and expand consumer awareness of lab-grown diamonds, intensifying competition for natural diamond jewellery.
China has traditionally been one of the world's largest markets for diamond jewellery, accounting for nearly 14% of the global diamond market by revenue in 2024 with an estimated $5.72 billion in revenue. However, consumer confidence has weakened in recent years, leading many households to cut back on discretionary spending, including luxury purchases. In 2025, investment in gold bars and coins rose 35.1% as consumers increasingly turned to gold as a safe-haven investment over diamond jewellery. As jewellery sales have slowed, retailers have placed fewer orders for polished diamonds, with these reduced orders gradually reducing demand for rough diamonds produced by miners such as De Beers. The challenge is particularly acute among younger consumers, who may be less willing to pay a premium for natural diamonds. As per The Knowledge Company's Arvind Singhal, "The 'diamonds are forever' story is currently in a slow decline if not a rapid decline phase."
Natural diamonds continue to be marketed around rarity, provenance and long-term value, while laboratory-grown diamonds are positioned around affordability, larger stone sizes and fashion jewellery. De Beers said clear differentiation between the two categories will become increasingly important as the market develops, with the company noting that natural and synthetic lab-grown diamonds share some physical and optical properties but are not the same, making clear nomenclature important for maintaining consumer confidence. The company also expects global rough diamond production to continue declining over the coming years as existing mines mature and few new projects enter production. Against this backdrop, producers have responded by reducing output, delaying investments or temporarily pausing operations, with the suspension of mining activities at Venetia being the latest example of these broader industry trends rather than an isolated event. As per Mint, while lab-grown diamonds offer affordability, natural diamonds continue to appeal to consumers seeking rarity, authenticity and a product that can be held as a legacy, with Forevermark targeting consumers between 22 and 43 years of age through modern, stackable and everyday-wear designs.
