The British multinational giant is in negotiations with the Global Diamond Consortium, led by former De Beers CEO Gareth Penny, Bloomberg reports.

Driven by a prolonged industry crisis, De Beers' market value dropped to $2.3 billion by February. Now, the consortium is offering to buy a controlling stake from mining giant Anglo American Plc for a modest $1 billion ($750 million upfront and the remainder later). For comparison, in early 2024, mining company BHP considered acquiring the assets for $50 billion.

Why Did the Diamond Empire Collapse?

In recent years, the jewelry market has come under intense pressure due to several key factors:

• Slump in China: Following a post-pandemic sales surge, declining luxury spending in the PRC hit demand for natural diamonds hard.

• Lab-Grown Diamond Boom: Synthetic diamonds are rapidly capturing market share. According to wedding planning service The Knot, nearly half of all engagement rings in 2023 featured lab-grown stones.

• Geopolitics: Trade wars and global conflicts have only exacerbated the decline in demand for genuine gemstones.

"This valuation (which is not yet officially confirmed) reflects the dire state of the diamond industry and the realization that current issues are long-term rather than temporary," commented Joshua Freedman, Senior Analyst at Rapaport Group.

End of an Era

Founded in 1888 by Cecil Rhodes, De Beers remained virtually synonymous with the diamond business for over a century. The Oppenheimer family held a 40% stake in the company until 2011, when they sold their share to Anglo American.

A 15% stake in De Beers is owned by the government of Botswana—Africa's largest diamond producer, home to most of the company's mines (with additional mining operations in Namibia, South Africa, and Canada). Due to the crisis in the diamond sector, Botswana's economic growth has come to a near standstill.

What Lies Ahead?

Experts note that the new owner will have to completely overhaul the company's marketing strategy. "In my 30 years in this business, I have never met a buyer who bought a diamond simply because it sparkles," noted former CEO Gareth Penny.

Analyst Paul Zimnisky added that the diamond industry is currently experiencing a "generational lull," which has severely devalued both unsold inventory and the company's unmined underground resources.