Modern Mining January 2025

The diamond market in 2025 is characterised by a mix of challenges and opportunities.

It is critical to continue driving overall diamond jewellery growth.

There are a number of economies that are showing positive offshoots in terms of potential demand for rough diamonds.

demand for luxury goods, including diamonds, there are signs of resilience in key markets. The United States continues to be the largest consumer of diamonds, with demand driven by weddings, anniversaries, and other significant life events. Meanwhile, China, after a prolonged period of strict Covid 19 restrictions, is expected to see a resurgence in diamond demand as consumer confidence returns. As Chinese markets recover, the upcoming Lunar New Year and Valentine’s Day in early 2025 are likely to boost retail sales. Despite these positive signals, consumer behaviour in 2025 remains unpredictable, especially considering persistent economic uncertainty. Diamantaires are likely to continue exercising caution in inventory management, focusing on fulfilling specific orders rather than taking on excess stock. This trend has already become a hallmark of the post-pandemic diamond trade, where supply and demand imbalances have forced the industry to operate with greater agility. Supply chain constraints: The impact of sanctions and geopolitical tensions One of the defining characteristics of the 2024 diamond market is the ongoing supply constraints resulting from the geopolitical conflict between Russia and Ukraine. Russia, which accounts for roughly one-third of the world’s rough diamond production, has been subject to stringent sanctions from the United States and Europe. These sanctions have significantly disrupted the global diamond supply chain, particularly affecting Alrosa, Russia’s state-owned diamond mining company. As Western markets distance themselves from Russian

country has dropped out of the top five (5) diamond producing countries in value and in carats. This is likely to change in the short term because Venetia Mine in Limpopo, which accounts for approximately 40% of South Africa’s production, is still undergoing underground expansion. It would be remiss of this outlook not to mention the global economic terrain that the natural diamond industry operates under. The major downstream consumer markets for diamonds are the United States of America, China, and India, with the Gulf States and Japan making up the largest five markets. This means that the health and recovery of these economies is directly linked to the sustainability of the natural diamond industry. Slow recovery post the Covid-19 pandemic has added to the multitude of challenges faced by the diamond market. It will take a collaborative effort to turn the tide in 2025 to ensure that diamonds are the most desirable purchase when compared to other precious metals or gemstones. Recovery amid economic uncertainty The diamond industry entered 2024 on the back of a fragile recovery from global economic challenges that emerged in late 2022 and 2023. The International Monetary Fund (IMF) has forecast modest global economic growth of around 3% for 2024, with inflationary pressures starting to ease but still impacting consumer spending. High inflation, particularly in energy and food costs, had a dampening effect on discretionary income in major diamond markets, especially in North America and Europe, leading to cautious consumer behaviour. While these economic pressures have softened overall

JANUARY 2025 | www.modernminingmagazine.co.za  MODERN MINING  17