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Future of natural diamonds challenging; holds promise of transformation: BCG report

A new report by the Boston Consulting Group (BCG), commissioned by De Beers Group, unveils the critical factors that will shape the future of the natural diamond market

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A new report by the Boston Consulting Group (BCG), commissioned by De Beers Group, unveils the critical factors that will shape the future of the natural diamond market.In an era marked by rapid changes and emerging challenges, the natural diamond industry stands at a pivotal juncture. A recent report by the Boston Consulting Group (BCG), commissioned by De Beers Group, sheds light on the critical factors shaping the future of the natural diamond sector. With primary diamond supply projected to decline and demand dynamics evolving, the industry is poised for a significant transformation, it notes.

The cornerstone of the natural diamond industry’s future is the anticipated decline in primary supply. The report highlights that the primary production of natural diamonds is expected to decrease by approximately 1% CAGR over the next decade. This decline is driven by the diminishing yields from ageing mines, a scarcity of new discoveries, and constrained exploration budgets over the past ten years. While there is potential for some increase through brownfield expansions, the overall outlook suggests a tightening of supply.

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De Beers Narrowed Losses In H1 2026 Despite A Sharp Decline In Rough Diamond Prices

The decline reflected significantly lower realised rough diamond prices, although underlying operating performance improved. higher production, increased sales volumes and aggressive cost-cutting helped offset weaker pricing.

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De Beers narrowed its losses in the first half of 2026 despite a sharp decline in rough diamond prices, as higher production, increased sales volumes and aggressive cost-cutting helped offset weaker pricing.

Revenue fell 19% to US$1.58 billion in the six months that ended 30 June 2026, from US$1.95 billion a year earlier. The decline reflected significantly lower realised rough diamond prices, although underlying operating performance improved.

Underlying EBITDA loss narrowed to US$113 million from US$189 million in the first half of 2025, while the underlying EBIT loss improved to US$209 million, compared with US$303 million a year earlier. EBITDA margin improved to -7% from -10%.

The average realised rough diamond price fell 32% to US$105 per carat, driven by a weaker product mix and a 16% decline in the average rough price index following inventory rebalancing measures introduced during 2025.

However, De Beers increased production by 46% to 14.9 million carats, while sales volumes rose 13% to 12.4 million carats, reflecting improved availability and stronger trading activity than in the comparable period. Unit costs declined 26% to US$64 per carat, helping cushion the impact of lower prices. Capital expenditure was reduced by a third to US$115 million.

During the second quarter, De Beers sold 6 million carats of rough diamonds, generating US$665 million in consolidated revenue, compared with US$1.2 billion from 6.8 million carats in the same period last year, underscoring the continued pressure on prices despite relatively stable demand.

The company maintained its 2026 production guidance at 21-26 million carats, although planned maintenance at the Orapa and Jwaneng mines and the proposed production pause at the Venetia mine in South Africa are expected to reduce output in the second half. Unit cost guidance remains unchanged at around US$80 per carat.

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