The world’s leading diamond-producing nations are building a war chest of potentially millions of dollars to protect natural diamonds from the threat posed by lab-grown gems.
At a meeting in June in the Angolan capital, Luanda, producer nations Botswana, South Africa, Angola, Namibia, Sierra Leone, the Democratic Republic of the Congo, and De Beers — the largest diamond company on the continent and the second-largest in the world — committed to contributing 1% of annual revenue from the sale of rough diamonds towards a global campaign to market these diamonds.
The Luanda Accord, signed by all the parties, seeks to fuel consumer demand for natural diamonds by channelling money to the New York-based Natural Diamond Council, the global lobby group for the natural diamond industry.
While mineral & petroleum resources minister Gwede Mantashe was listed as a signatory, South Africa has licensed the recovery and sale of rough diamonds to private companies, and the minister first had to get the buy-in from the local diamond industry and approval from the cabinet before committing to the initiative.
On Thursday minister in the Presidency Khumbudzo Ntshavheni confirmed that the cabinet had approved the department’s participation in international agreements to help diamond-producing countries better promote and market natural diamonds globally.
“For this to be realised, the 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,” she said.
Small and medium-scale local producers welcomed the accord but raised concerns about the expected 1% commitment, given the weak state of the industry globally.
Rough diamond production peaked in 2005 at 177-million carats. In 2024, 112-million carats were produced, with volumes expected to remain flat until the end of the decade.
The flood of cheaper lab-grown gems has depressed global prices. Weak economic growth, worsened by geopolitical tensions and elevated interest rates, has also affected spending on luxury goods across the world.
More than 70% of the world’s lab-grown diamonds originate in China.
South Africa is the world’s sixth-biggest diamond producer by volume. Its diamond production dipped 0.9% to 5.8-million carats in 2024, with total sales of R13bn, down 21% from 2023.
De Beers reported rough diamond production had decreased 36% in the second quarter of 2025 to 4.1-million carats, saying this was a planned production response to a prolonged period of lower demand.
David Kellie, CEO of the Natural Diamond Council, said the accord was an opportunity the industry could not pass by given the tough market conditions.
“The reality of the market conditions is that the most important investment the industry needs to make now is to grow consumer demand — it is the only solution to the economic challenges the industry faces.
Natural diamonds are a precious natural resource; they differ from other natural resources in that they are bought as a luxury by consumers as opposed to being a component or investment commodity. Therefore, the industry has it within its own control, whether we choose to invest and grow the market — it’s an opportunity we cannot afford to miss.
— David Kellie, Natural Diamond Council CEO
“Natural diamonds are a precious natural resource; they differ from other natural resources in that they are bought as a luxury by consumers as opposed to being a component or investment commodity. Therefore, the industry has it within its own control, whether we choose to invest and grow the market — it’s an opportunity we cannot afford to miss.”
Kellie said the council had done its calculations and already had firm agreements to collect at least 50% of these contributions. He could not say how much it expected to collect once all contributions have been confirmed.
“We’re now working with the remaining attendees at the Luanda meeting to turn commitments into firm agreements,” he said.
Mantashe told Business Times on Friday he had spoken to the cabinet and local diamond producers and they had given him the go-ahead to support the Luanda Accord.
“I have received a mandate and will sign the accord. The diamond industry is weak across the world, which is why the accord has been established. They have agreed to contribute 1% of turnover, 1% of sales. The value will be derived from the movement of demand and from the increase in the market share.”
Speaking at a ministerial diamond industry engagement session in Johannesburg on Tuesday, Mantashe urged the industry to invest in the marketing of natural diamonds as South Africa was no longer one of the world’s top five producers.
“It is bad for South Africa. It has happened in diamonds, it has happened in gold. In gold, we are number four on the continent; we used to be the top producer, but we have dropped to number 13 in the world in gold production.”
Lab-grown diamonds were eating into South Africa’s dinner, he said.
“Our dinner is getting smaller and smaller because of lab-grown diamonds. But lab-grown diamonds will lose value; natural diamonds are loved forever. We must regurgitate the message that a diamond is loved forever. I don’t hear that message today because lab-grown diamonds have invaded us.”
Lesedi Ntuli, external communication manager at De Beers South Africa, confirmed the group was a signatory to the Luanda Accord, and supported the intention to commit the equivalent of 1% of its annual rough diamond revenue to the initiative.
“We believe this collaborative approach to category marketing is important as it follows a period when consumers have been less exposed to the types of category campaigns that drove much of the success the diamond industry saw in the 20th century.
“We see great value in collaborative marketing approaches — not only via the Luanda Accord, but also through our marketing collaborations with retailers and trade bodies — as they enable us to pool resources, unite behind a particular messaging platform and amplify the impact of marketing campaigns,” said Ntuli.
The South African Diamond Producers Association (Sadpo), a lobby group for small and medium-scale diamond producers, said it was not a signatory to the accord but supported its intention to promote natural diamonds in the face of increasing competition from lab-grown alternatives.
Sadpo chair Gert van Niekerk said small and medium-scale producers contribute roughly 25% to South Africa’s diamond production, but their financial position is different from that of major producers. This made it difficult for them to firmly commit to contributing 1% of their collective revenue to the cause.
These operations often work with limited access to capital, face high regulatory and compliance costs, and operate in remote areas with limited infrastructure, he said.
“Despite our collective contribution to national output, the sustainability of these businesses is under strain, and the pressure has only intensified in recent years. While we wholeheartedly support the objectives of the accord, these underlying challenges provide important context when evaluating the viability of a standard 1% contribution across the sector.
“That said, we are actively exploring alternative ways of participating in this important campaign and remain committed to contributing in a manner that reflects the realities of the smaller producers,” Van Niekerk said.
Nosiphiwo Mzamo, CEO of the State Diamond Trader, said there had been opposing views from diamond producers during the consultation.
“The diamond industry finds itself in a downturn. Also, the concern of paying and not getting the marketing they deserve was raised,” Mzamo said.
Signatories of the Luanda Accord said they understood that effective action was urgently required to build and sustain consumer demand for natural diamonds.
“We commit to working together to help ensure that a new generation of consumers is not only aware of the rarity and natural beauty of diamonds, but also of the positive impact they have made — and continue to make — in communities and producer nations across the globe.
“As such, we the undersigned agree that marketing is a fundamental pillar of the natural diamond industry’s future. We jointly resolve to exclusively promote natural diamonds through a global, generic marketing effort focused on key consumer regions.”
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