By Nqobile Dludla
JOHANNESBURG (Reuters) -South Africa’s cabinet has approved participation in an international effort to boost the marketing of real diamonds, responding to the increasing appeal of lab-grown gems and funded by a 1% levy on the annual revenues of diamond companies.
The natural diamond market has struggled in the past three years due to rising consumer demand for the cheaper synthetic gems, coupled with global macroeconomic volatility which has led to lower international prices.
In June, representatives from leading African producer nations, trade bodies and De Beers – part of Anglo American – signed an accord aimed at working together to promote natural diamonds and drive global demand.
The signatories intend to allocate 1% of the annual revenue they generate from rough diamond sales to fund this initiative, spearheaded by the Natural Diamond Council.
South Africa had not initially signed the accord, but Minister in the Presidency Khumbudzo Ntshavheni on Thursday announced that cabinet had approved the Department of Mineral Resources and Petroleum’s participation in international agreements aimed at helping diamond-producing countries better promote and market natural diamonds globally.
“For this to be realised, cabinet has further approved that the diamond industry be requested to contribute 1% of their annual revenues generated from rough diamond sales to support marketing of South Africa’s real diamonds to enable economic growth and job creation,” Ntshavheni said.
With their lower environmental impact and increasingly competitive pricing, synthetic diamonds are gaining appeal among younger, ethically conscious consumers – a shift that is pressuring traditional diamond miners and retailers to rethink their strategies.
South Africa is the world’s 6th-biggest diamond producer by volume. Its diamond production dipped 0.9% to approximately 5.8 million carats in 2024, with total sales of 13 billion rand ($731.45 million), down 21% from 2023.
“Lab-grown diamonds are eating into our dinner,” Mines minister Gwede Mantashe said at a meeting with diamond producers on Tuesday.
“I’m very convinced that the marketing of natural diamonds is a necessary intervention.”
($1 = 17.7730 rand)
(Reporting by Nqobile Dludla; Editing by David Holmes)
