De Beers has ceased production at a South African diamond mine because weak prices are impacting sales. This production halt is part of a broader strategy by De Beers to navigate a severe downturn in the diamond industry. The company has also made some of its deepest-ever official price cuts for diamonds and reduced its network of handpicked buyers, known as sightholders, from about 70 to between 45 and 50.
The official price cuts come after De Beers had previously tried to maintain higher official prices, often selling discounted stones in secret sales to avoid undermining market confidence. Buyers reported that De Beers' prices, which were previously 5% to 50% higher than the secondary market depending on the stone category, are now much closer to prevailing market levels. The exact scale of these price reductions is difficult to determine because De Beers implemented a new one-line invoicing policy earlier this year and altered the assortment of some diamond boxes.
This strategic shift is a response to mounting pressures, including a slowdown in Chinese luxury spending, the increasing popularity of synthetic diamonds, and a flood of goods from other producers like Angola. These factors, alongside U.S. tariffs and conflict in the Middle East, have contributed to one of the industry's worst and most prolonged crises. De Beers' parent company, Anglo American, is pursuing a sale of the business after years of underwhelming performance, with a structured sale process currently underway.
