The natural diamond industry is in the throes of its most profound reset in a generation. Supply is plunging to its lowest level since 1987 and De Beers—once valued at over $9 billion—is reportedly being sold for as little as $1 billion.
Lab-grown diamonds have overtaken natural stones by volume in India's exports.
In this interview with Rough & Polished’s Mathew Nyaungwa, the New York-based independent diamond and jewellery analyst offers a candid assessment of supply catharsis, producer-country leverage and the natural diamond market's path forward.
He sees the De Beers sale as a “deep value play” for a buyer willing to invest in the business, rather than acquire it cheaply and let it decline.
Zimnisky said that stakeholders—including Botswana, which has a 15% stake and right of first refusal—are using their leverage to ensure the buyer commits to long-term investment.
On lab-grown diamonds, Zimnisky estimates they now represent about half of the global diamond jewellery market by volume, but argues that natural diamonds remain a luxury product where “with proper marketing investment and execution, the sky is the limit.”
He urged the trade not to discount natural diamonds and treat them as a premium option that they are.
NB: Zimnisky produces a professional subscription‑based monthly industry report called "State of the Diamond Market," maintains a widely tracked proprietary rough diamond price index called "The Zimnisky Global Rough Diamond Price Index," and hosts a popular industry‑focused podcast called the "Paul Zimnisky Diamond Analytics Podcast." All of this can be found at his website. He will also be speaking at the Atlanta Jewelry Show on August 21 and the Dubai Diamond Conference on October 26.
Natural diamond supply is forecast to fall below 95 million carats this year – the lowest since 1987. With major mines shutting or suspending, do you see production bottoming out in 2026, or is there more downside ahead?
These figures are based on my internal data. I do think we have had a good catharsis as miners have been squeezed from all directions. The mines that are still economic at current levels are truly the best diamond mines in the world. I am not forecasting supply to fall further in the foreseeable future.
Rough diamond prices are down 20% year-over-year and 40% from a decade ago. With De Beers reporting a 32% price drop to $105/ct in H1 2026, where do you see prices stabilising, and what would signal a genuine recovery?
I am beginning to see the effect of the dramatic fall in supply supporting prices. Just within the last few weeks, I have seen most categories of diamonds show signs of life for the first time in a while. Of course, you want to see price appreciation ultimately driven by both supply and demand factors. So, I think we will need to see positive demand signals to sustain a meaningful rally in prices.
Anglo American is reportedly selling De Beers' 85% stake for around $1 billion – a fraction of its former value. How do you assess the valuation, and who is best positioned to turn the business around?
Given the uniqueness of the De Beers asset and the limited number of buyers I could certainly see a situation where there is a discount on the purchase price that is tied to a minimum investment commitment. At the end of the day, the stakeholders are interested in a longer-term successful business, and proper investment is crucial in my opinion.
To be more specific, De Beers has partnerships with the governments where it operates its mines, including Botswana and Namibia. Further, Botswana has a 15% outright stake in De Beers and has a right of first refusal to buy a larger stake. So, these countries have leverage in the De Beers sales process and will be partners with whoever buys De Beers. So, my read on this is these stakeholders are using their negotiating leverage to demand that the new buyer is committed to invest in the business after it buys it. This will ensure that the buyer will not just buy it on the cheap, bleed it dry and let it die.
For the buyer I see this as a high risk/reward purchase. That said, I consider it a deep value play for the buyer at just $1 billion. At that price, I think they will make money.
A consortium led by former De Beers CEO Gareth Penny, backed by Botswana, Angola and Namibia, is the leading bidder. Would a producer-country-owned De Beers be a net positive for the industry, and what strategic shifts would you expect?
This is the inevitable structure. That said, I think having everyone on the same team is a positive. Diamonds really need a strong united front of advocates right now. I think having a strong business leader, smart investors and governments with real skin in the game could be a good combination.
Anglo American's CEO acknowledged the industry "underestimated" lab-grown diamonds. With synthetics now retailing at around 10% of natural prices and gaining share in bridal, have natural diamonds permanently lost the entry-level consumer?
You have to remember that diamonds are a luxury product. We don’t need diamonds, but we want them. It is an emotional purchase. With proper marketing investment and execution, the sky is the limit in my view.
India's lab-grown diamond exports by carat now exceed natural diamonds. Yet synthetics still account for less than 9% of export value. Is this the new normal – high volume, low value – and what does it mean for the midstream?
I estimate that LGDs now represent about half of the global diamond jewelry market –definitely by volume and it is approaching that level by value as most LGDs are larger, higher price point items.
The Indian midstream is quite nimble. They will switch between natural and LGD depending on where the best opportunity is. That said, I think most would prefer working with natural if the demand is there as the money is better.
Polished prices rose 11.6% year-on-year in Q1 2026, while rough prices fell 27%. What's driving this divergence, and can it continue, or will rough prices eventually follow polished higher?
I have seen pressure on both rough and polished prices year-to-date. But I do have polished prices outperforming rough on a relative basis. It is normal to see that in the shorter-term, but over the longer-term rough and polish prices tend to be symbiotic.
You've warned that a rebound in natural prices could just drive more consumers to lab-grown diamonds. In a K-shaped market where high-end stones thrive and everything else struggles, what is the most viable long-term strategy for natural diamond producers?
I actually think a rebound in natural prices could drive more consumers to natural as it would further segregate consumer’s perception of the substitutability of the product with LGD. I strongly urge the trade not to discount natural diamonds. Consumers will pay a premium for natural but you have to properly merchandise the product and treat it as the premium option that it is. The industry still has a lot of work to do on this front in my view. I just spoke about this in detail on my podcast.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
