Modern Mining January 2025

COMMODITIES OUTLOOK

budget-conscious buyers. Additionally, lab-grown diamonds are marketed as being free from the environmental and ethical concerns associated with traditional diamond mining, such as land degradation and human rights violations. For natural diamond producers, including the State Diamond Trader, this trend represents both a challenge and an opportunity. While lab-grown diamonds compete directly with natural stones in the engagement and wedding ring market, a strong demand remains for natural diamonds in other segments, particularly among high-net-worth individuals who value the rarity and authenticity of mined diamonds. To counter the rise of lab-grown diamonds, natural diamond producers are focusing on storytelling and marketing strategies that emphasise the unique qualities of natural diamonds—such as their geological history and the positive social and economic impact of diamond mining in producing countries. The SDT, in particular, is well-positioned to highlight the role that the diamond industry plays in supporting South Africa’s economy, creating jobs, and fostering local entrepreneurship through its Enterprise Development Programme. The role of African producers in the global diamond market Africa continues to be a dominant force in the global diamond market, accounting for more than 50% of global diamond production by volume and approximately 70% by value. Countries like Botswana, Angola, Namibia, and South Africa are major players, supplying a significant portion of the world’s rough diamonds. In 2025, African producers are expected to see continued demand for their diamonds, particularly as global buyers seek to diversify their supply chains in the wake of sanctions on Russian diamonds. However,

The African diamond industry faces several challenges, including the need for increased investment in mining infrastructure.

diamonds, alternative sources of rough diamonds have become increasingly important. African producers, especially Botswana, Angola, and South Africa, are benefiting from heightened demand as buyers seek to fill the gap left by Russia. However, these producers face their own challenges, including limited mining capacity, rising production costs, and stringent regulatory frameworks. For South Africa, the State Diamond Trader (SDT) has played a crucial role in ensuring a stable supply of rough diamonds to the local market, particularly for beneficiation purposes. The SDT has leveraged this opportunity to strengthen its partnerships with local diamond cutters, polishers, and jewellery manufacturers ensuring that the country captures more value from its natural resources. By promoting

beneficiation and encouraging local diamond processing, the SDT aligns with South Africa’s broader economic development goals, which include job creation and skills development in the diamond sector. Lab-grown diamonds: A growing threat to natural diamonds The rise of lab-grown diamonds continues to reshape the diamond market in 2024, posing a significant challenge to traditional diamond producers. Lab-grown diamonds, which are chemically and physically identical to natural diamonds, have gained widespread acceptance, particularly among

the African diamond industry faces several challenges, including the

need for increased investment in mining infrastructure, technology, and regulatory frameworks. Additionally, small-scale miners and local diamond processing companies often struggle with access to financing and international markets, which limits their ability to compete with larger, more established players. The State Diamond Trader, through

The State Diamond Trader plays a crucial role in ensuring a stable supply of rough diamonds to the local market, particularly for beneficiation purposes.

its various programmes, is working to address these challenges by promoting beneficiation and supporting the development of a local diamond cutting and polishing industry.

The SDT’s Enterprise Development Programme, for example, aims to empower young South Africans by providing them with the skills and resources they need to succeed in the diamond industry. This initiative is critical to ensuring the long-term sustainability of South Africa’s diamond sector and to fostering greater inclusion in an industry that has historically been dominated by a small number of players. Sustainable practices and ethical sourcing Sustainability and ethical sourcing remain top priorities

younger, environmentally conscious consumers. In 2024, the market share of lab-grown diamonds is expected to grow even further, driven by lower prices and the perception that these diamonds are more sustainable and ethical than mined diamonds. Lab-grown diamonds are now widely available across major jewellery retailers and online platforms, offering consumers an affordable alternative to natural diamonds. Prices for lab-grown diamonds are typically 30-50% lower than their natural counterparts, making them an attractive option for

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