De Beers group managed operations CEO Moses Madondo has said the supply of natural diamonds has peaked, with dwindling new discoveries on the horizon.

“We must recognise that we are already past the peak for diamond supply. Despite extensive exploration, only one commercial discovery – the Luele mine in Angola – has been made in the twenty-first century,” he said on the second day of the Joburg Indaba, in Johannesburg, on October 4.

Angola's State-controlled diamond miner Catoca discovered the Luele diamond deposit in 2013, marking one of the largest diamond discoveries in more than 50 years.

“The broader outlook indicates a decline in global diamond production. While this may create supply pressures, it offers price growth potential,” he said.

He mentioned that the decline in production would occur in four phases.

The first phase would see an initial immediate decline resulting from the upcoming closure of several mines, along with others that had ceased operating in the past year. In addition to mine closures, numerous diamond mines were implementing production cuts because of challenging market conditions.

Thereafter, a slight increase in supply would occur through to 2026, before the start of another decline as key diamond mines in Canada ceased production.

From 2028, Madondo said, diamond supply would drop quickly owing to mine closures and production declines in Canada and Russia.

Thereafter, a more steady decline of about 1% a year could be expected through to 2040. However, a restart at the Mir diamond mine, in Russia, and the ramp-up of underground operations at Jwaneng, in Botswana, would offset the decline during this period to some extent.

Part of De Beers' strategy going forward was to continue embracing lab-grown diamonds (LGDs). However, Madondo said the company would be veering away from producing LGDs for the jewellery market and instead focus on highly engineered synthetic diamonds for industrial and technological applications, such as space exploration technology and supercomputer components.

“The strategy is both ambitious and transformative, positioning us to lead the recovery of the diamond industry, fully integrating our operations from upstream to downstream,” he said.

He added that the price of natural diamonds and LGDs would bifurcate at an accelerated pace as the supply of natural diamonds declined in the coming years.

“LGDs are perhaps the most widely discussed and most widely misunderstood . . .  issue for the natural diamond industry,” he said.

Madondo revealed that the average price of a 2 ct natural diamond had seen a 1% year-on-year growth in recent years, while the average retail price of a 2 ct LGD, over the same period, has seen a 25% yearly decline in price, with the wholesale LGD price falling by as much as 36%.

“I should also debunk the myth that the difference between LGDs and natural diamonds cannot be told. It definitely can be told,” he added, noting that De Beers has had synthetic diamond detection technology available for decades.

Madondo said the diamond verification instrument developed by De Beers was extremely accurate and reliable, with a 0% false positive rate.

“This means there has never been a diamond that was not natural that has not been picked up by that machine,” he added.

Madondo revealed that a consumer-friendly version of this device was being developed and would go to market soon.

“We launched that prototype, called Diamond Proof, at the JCK show in Las Vegas, in the US, in June. We are aiming to make those available for purchase by May 2025.

“There is a big demand for these machines already, but we need to make sure that the ones we put on the market will deliver on expectations,” he said.