A perfect 100-carat natural diamond heading for auction at Sotheby’s in London. (Photo by Carl Court\/Getty Images)<\/p>\n
Getty Images<\/small> <\/figcaption><\/figure>\n
The diamond crash claimed another victim this week as South African focused Petra Diamonds launched a business rescue plan for its financially distressed Finsch mine.<\/p>\n
South African law allows for the appointment of a rescue practitioner when it is unlikely that a business will be able to pay its debts over the next six months.<\/p>\n
Petra chief executive Vivek Gadodia said the rescue was necessary because of a weak market for diamonds and a strong rand, South Africa\u2019s currency.<\/p>\n The Finsch diamond mine of Petra Diamonds in South Africa. (Photo by COLLART Herv\u00e9\/Sygma via Getty Images)<\/p>\n Sygma via Getty Images<\/small> <\/figcaption><\/figure>\n Financial trouble at Finsch continues a long run of diamond mine closures around the world as the full impact of cheap laboratory grown gems is felt in the market.<\/p>\n The steep fall in prices for natural, or mined diamonds, has hammered the performance of all miners, even the industry leaders, Russia\u2019s Alrosa and London-based De Beers.<\/p>\n Alrosa\u2019s struggle with low diamond prices is magnified by its Russian roots and best reflected in its all-time low share price reached this week at 25 rubles, down 48% over the last 12-months and 83% over the last five years.<\/p>\n De Beers, which is majority owned by prominent mining company Anglo American, has been forced to book a series of asset value write-downs, including $2.3 billion in last year\u2019s accounts, on top of $2.9 billion in 2024 and $2.6 billion in 2023.<\/p>\n The heavy impairment charges are clearing the way for the sale of De Beers, possibly to a syndicate of African diamond mining countries including Botswana and Angola.<\/p>\n A protracted delay in executing the sale is believed to be caused by the prospective buyers waiting for the market in natural diamonds to settle after three down years.<\/p>\n Eirik Waerness and Isabella Mann at a De Beers event celebrating diamonds and art at Maison Assouline in London earlier this year. (Photo by Dave Benett\/Getty Images)<\/p>\n Dave Benett\/Getty Images for De Beers Group<\/small> <\/figcaption><\/figure>\n De Beers chief economist Eirik Waerness can see indications of the natural diamond sell-off coming to an end, partly because of a decline in mine production and tough tightening profit margins for lab-grown diamond makers.<\/p>\n Waerness said in a Diamond Report published yesterday by De Beers that there were four key \u2018dynamics\u2019 which would shape the market for natural diamonds over the next five years.<\/p>\n As well as a more favorable supply\/demand balance and squeezed margins in the lab-grown sector a clear differentiation between natural and lab-grown would be important as would marketing to rebuild consumer demand.<\/p>\n \u201cI\u2019m confident that the balance between supply and demand in the natural diamond market will be restored,\u201d Waerness said in the report.<\/p>\n \u201cWhen it happens and how fast, is harder to predict but the underlying drivers of today\u2019s disruption are well understood and, importantly, not permanent.\u201d<\/p>\n This article was originally published on Forbes.com<\/a><\/em><\/p>\n<\/p><\/div>\n<\/div>\n<\/div>
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Balance Will Be Restored <\/h2>\n