Anglo American Admits Diamond Sector Was Slow to React to Lab-Grown Competition

Anglo American chief executive Duncan Wanblad has acknowledged that the diamond industry, including De Beers, failed to respond quickly enough to the rapid rise of lab-grown diamonds, which have reshaped the global gemstone market and put significant pressure on natural diamond producers.

Speaking about the challenges facing the sector, Wanblad said the industry had expected the downturn to follow the pattern of previous market cycles, where demand and prices typically rebounded quickly. Instead, the growing popularity of lab-grown diamonds has fundamentally changed consumer buying habits.

"With hindsight, we probably should have reacted more aggressively to the signals we were seeing," Wanblad said, noting that past market slumps had generally been short-lived.

The comments come as Anglo American continues efforts to sell De Beers, the iconic diamond company it has repeatedly written down in value over the past three years. The mining giant said the divestment process is progressing, although it has yet to select a preferred bidder.

Financial results released last week underscored the challenges facing De Beers. Average rough diamond prices fell 32% in the first half of the year to $105 per carat, dropping below levels recorded during the height of the COVID-19 pandemic in 2020. The business also posted a cash loss of $113 million during the period.

Despite the weakness in its diamond division, Anglo American reported underlying earnings of $4 billion for the first half, supported by stronger copper prices.

Lab-grown diamonds have emerged as a major force in the jewellery market, offering consumers a more affordable alternative while providing retailers with stronger sales volumes and higher profit margins. Their growing acceptance has intensified pressure on natural diamond producers, leading to production cuts and mine closures across the industry.

Last month, De Beers announced it would temporarily suspend production at its Venetia mine in South Africa. Wanblad said roughly one-fifth of current natural diamond supply is expected to leave the market within the next year, with few of those operations likely to resume production. Earlier this year, De Beers also shut down its own lab-grown diamond jewellery brand, Lightbox.

On the sale of De Beers, Wanblad declined to comment on a potential valuation but stressed that Anglo American remains in discussions with multiple interested parties.

Among the groups linked to a possible acquisition is a consortium led by former De Beers chief executive Gareth Penny, which has reportedly explored a deal valued at around $1 billion. Other bidding groups are said to include teams led by Diacore Group executive chair Nir Livnat and Burgundy Diamond Mines non-executive chair Michael O'Keeffe.