Modern Mining January 2025

COMMODITIES OUTLOOK

Diamond market outlook: collaborative efforts needed to turn the tide in 2025 By the State Diamond Trader The general sentiment is that the market outlook in the short-to-medium term will be driven stock levels in the value chain, particularly the midstream which has been reported to have high levels of inventory going into the festive season. Demand at retail level has been negatively impacted by the development of the increased need for transparency in ethical sourcing of rough diamonds. The millennials are becoming more demanding of the 5 th “C” I.e. Consumer Confidence.

I n the main, the long-term outlook will be driven by supply and demand fundamentals. The rarer and scarce the natural rough diamond becomes, the greater the chances of increased demand and willingness to pay a premium on the diamonds. A positive long- term industry outlook will be driven, supported by a responsible and measured supply to the value chain, simultaneously supported by rising global affordability. There is a greater and more urgent need for aggressive industry initiatives like marketing to reinforce the desirability of natural diamonds. There has been a sharp decline in Lab Grown diamond (LGD) prices, but the industry does not have verifiable data to show that consumer preferences have shifted due to price. It

is therefore imperative that marketing strategy focus on the difference between the LGD and natural diamonds and the role of diamonds in improving the lives of people in mining countries, particularly in Africa. Future production increases are unlikely if one considers the lifespan of mines globally and the impact of geopolitics within the natural diamond space. Recently, the G7 Protocol banned the rough diamonds from Russia entering their markets. Russia accounts for just over 30% of the global production in terms of carats. There are suppressed exploration budgets over the past decade, a scarcity of large new discoveries, and lengthy mine development timelines that make it difficult to foresee significant new volume increases. In the South African context, the

16  MODERN MINING  www.modernminingmagazine.co.za | JANUARY 2025