DiamondBuzz
Wealthy Russians Surge in Investment-Grade Diamond Purchases Amid Market Uncertainty
Demand for polished diamonds up by 60% as individuals diversify portfolios with gemstones following VAT abolition and growing financial volatility.
Wealthy Russians are increasingly turning to investment-grade diamonds, with purchases of polished stones rising by 60% last year, according to VTB, the country’s second-largest bank. This surge in demand is attributed to the government’s decision to abolish VAT on diamond purchases, which has made gemstones a more attractive investment option.
Oksana Semenenko, vice president at VTB and head of its private banking division, explained that the rarity and uniqueness of diamonds make them especially appealing during times of rising financial market instability and tighter investment restrictions. Many affluent clients are now incorporating alternative investments, including diamonds, into their portfolios, typically allocating 5-10% of their assets to these tangible assets for diversification.
This shift comes amid increasing sanctions from the G7 and restrictions on Russian currency, which have impacted Russian diamond exports. In response, Alrosa, the state-run diamond mining giant, is turning to alternative markets to sell its goods. The company’s Diamond Exclusive program focuses on polishing its largest and highest-quality diamonds, particularly stones of 3 carats or more, to be sold directly to investors through partnerships with VTB and other financial institutions.
DiamondBuzz
South African Task Team To Help Struggling Diamond Producers
The South African Government Has Partnered With Mining Industry Leaders To Form A Joint Task Team Aimed At Saving Jobs and Supporting Diamond Producers Facing Severe Market Pressures.
​The quick intervention follows major disruptions in the local sector, including Petra Diamonds placing its Finsch mine under business rescue and De Beers announcing a two-year production pause at Venetia, the country’s largest diamond mine.
​In a parliamentary reply on October 26, Minister of Mineral and Petroleum Resources Gwede Mantashe confirmed that the team—which includes the Minerals Council South Africa and local diamond producers—will develop strategies to help mines survive current economic headwinds.
The immediate focus is finding practical solutions to protect operations across the entire sector, especially junior and small-scale miners who are being hit the hardest,
​Key Industry Challenges
The local diamond sector faces a combination of falling global prices, rising operating costs, and intense competition from lab-grown synthetic diamonds. Official figures highlight the severity of the crisis:
​Production Downturn: South African diamond output dropped 19.5% year-to-date through August.
​Commodity Slump: According to Statistics South Africa, diamond mining was the weakest-performing mining sub-sector in August, with output falling 23.0% in the three months ending August compared to the previous three months.
​Significant Mine Reductions: De Beers reported a 37% year-on-year drop in South African production for Q3 2026 (down to 418,000 carats) as operations wrap up ahead of Venetia’s pause. De Beers expects zero further production in South Africa for the remainder of 2026.
​Price Pressures: Lower market values and a strong South African rand reduced average tender prices at the Finsch mine from $56 to $47 per carat, making ongoing operations unviable under current conditions.
The task team will focus on measures to ease cost pressures and address global market shifts. Further details regarding the team’s specific work plan, timelines, and financial resources will be announced as proposals are finalized.
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