Some mined commodities, particularly precious metals, such as gold, have increased in value, owing to the perception that they can be safe-haven assets during times of crisis.

However, the World Federation of Diamond Bourses (WFDB) suggests that diamonds have always retained their inherent value.

The federation is the largest diamond organisation globally, with 29 exchanges in 21 countries and about 30 000 members. It promotes the interests of its members, ensures ethical trading and consumer protection, and promotes diamonds and industry growth.

WFDB president Ernest Blom notes that, historically, there have been fluctuations in the diamond price – especially during the 2008/09 financial crisis – where the price dropped slightly initially, but then regained and surpassed its value in a relatively short period.

“Much the same is happening now where the price has dropped, owing to the effects of the Covid-19 pandemic, but I am confident that it will regain its value and climb,” he highlights, adding that now might not be a bad time to consider buying diamonds.

Although the diamond market is under a lot of pressure, he remains optimistic about the future of the industry once the financial markets have returned to a sense of normality.

Blom tells Mining Weekly that the reopening of markets, such as those of China and the US, are a much-needed ‘light at the end of the tunnel’, as the leading markets for diamond jewellery consumption are the US, China and India.

He mentions that China – being one of the fastest-growing markets, notwithstanding the Covid-19 pandemic – is likely to continue on this path, as its population of nearly three-billion people has a strong income base and is fond of luxury products.

“The other potential growth markets are the larger Asian countries and Pacific Rim regions, which, similarly, have substantial populations with good incomes.”

Consequently, while one of the federation’s top priorities is to encourage consumers to return to the market – which it believes will happen – it is also critical that manufacturing centres restart their operations after being in lockdown for a prolonged period.

“The responsible actions of diamond producers in cutting back their mining operations during this crisis have undoubtedly helped the situation, enabling the industry to return to normalcy much quicker,” he enthuses.

Moreover, Blom cites a previous report conducted by global research company Baines, which predicted that there would be a substantial shortfall of diamond supply over the next decade, owing to the shortage of natural rough diamonds in light of the maturity of the diamond mining sector.

Although Covid-19 and its effect on the global economy has negatively influenced the current price, he reiterates his optimism that the price will recover and surpass pre-Covid-19 levels. He does, however, note that this will not be without challenges as the world readjusts to a “new normal”.