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Diamonds are carbon crystals prized for a unique blend of hardness, thermal conductivity and optical fire. Those physical properties underpin two very different markets. Roughly speaking, gem-quality stones feed the global jewellery pipeline, while the vast majority of "diamonds" used by industry are synthetic abrasives and cutting elements manufactured at scale. Jewellery demand is cyclical and sensitive to incomes, interest rates and fashion. Since late 2022, it has faced a price and volume slump—exacerbated by the rapid rise of cheaper lab-grown diamonds competing with natural stones at retail—prompting production cuts and project delays across the value chain. (1)
Industrial demand, by contrast, is overwhelmingly met by synthetics, which account for more than 99% of global industrial diamond consumption because producers can tailor grit size and quality. These materials go into drilling bits for energy and mining, saws and grinders for construction and stoneworking, wire-drawing dies, and increasingly into electronics as heat spreaders and precision windows. Emerging frontiers include quantum and sensing applications that exploit colour centre defects in diamond lattices for magnetometry and photonics. (2)
On the supply side, natural diamonds are mined from kimberlite and lamproite pipes and, to a lesser extent, alluvial and marine deposits. The rough market clears through "sights" or term sales by majors, plus tenders and auctions for independent producers. Cutting and polishing remains concentrated in India, with trading centres in Antwerp, Dubai, New York and Tel Aviv. Sanctions on Russian diamonds reshaped trade routes and compliance costs, while producer countries from Botswana to Angola have pursued greater in-country "beneficiation," pushing for sorting and polishing at home. Prices vary dramatically by quality: a mine's economics hinge on carat grade per tonne and the value per carat realised in sales. Current headwinds—weak polished prices, retail downshifts, and inventories—have squeezed margins from miners to midstream manufacturers, even as long-term supply is constrained by the closure or maturation of older assets and the scarcity of new tier-one discoveries. (3)
Modern diamond mining clusters around a handful of geological provinces. Southern Africa remains the historic heartland. Botswana hosts Debswana's Jwaneng and Orapa complexes—among the world's richest by value—and Lucara's Karowe, renowned for record-size stones; Namibia's Atlantic shelf yields high-value marine diamonds recovered by Debmarine's crawler vessels; South Africa's kimberlites include Petra's Cullinan and Finsch, alongside De Beers' Venetia, now transitioning underground. Angola's Catoca in Lunda Sul is one of the largest kimberlite operations by volume. These assets collectively skew the global value curve because they deliver relatively high dollars per carat. (4)
Farther north, Russia has historically been the biggest producer by volume, dominated by ALROSA's Siberian pipes; Western sanctions have complicated trade but not erased the geological endowment. Canada contributes significant output from Arctic operations such as Diavik, Ekati and Gahcho Kué, prized for consistent quality and compliant supply. The Democratic Republic of Congo and Sierra Leone retain important alluvial fields, while Zimbabwe's Marange has been notable for large-scale but controversial output. Australia's once-prolific Argyle, source of rare pinks, closed in 2020, tightening certain niche supplies.
The latest Kimberley Process data show the Russian Federation led 2023 production by volume, with Angola, Botswana, Canada and the DRC among other top sources; value rankings differ because mines like Jwaneng sell fewer, higher-value carats than lower-value, high-volume producers. In practical terms, "size" is measured in two ways: ore throughput and carats per tonne (grade), and carats multiplied by the achieved value per carat at sale. On that second metric, Botswana's core assets and Namibia's marine fields routinely sit at the top, while Angola's Catoca dominates on tonnage. The global map is thus concentrated but diverse in geology—from deep, stable kimberlite roots to wave-sorted marine gravels—each requiring specialised methods that shape cost curves and valuations.
South Africa is the birthplace of large-scale diamond mining, from Kimberley's nineteenth-century open pits to the 1905 Cullinan discovery. Today, the industrial centre of gravity has shifted north, but South Africa still hosts important assets. Petra Diamonds operates Cullinan—famous for Type IIb blues—and Finsch, a high-grade underground mine; De Beers' Venetia, the country's largest producer, has completed first production from a US$2.3 billion underground conversion that extends life to at least 2045. The pivot underground reflects a mature resource base: as open pits deepen and strip ratios rise, economics favour block-cave and sub-level cave methods despite higher upfront capital. Logistics, power reliability and mine security costs weigh on unit margins, but the mines continue to supply distinctive goods into the global assortment. (5)
Botswana, by contrast, is the paradigmatic case of resource-led development managed through a public-private partnership. Debswana—owned 50/50 by the state and De Beers—operates Jwaneng and Orapa, with Letlhakane now reconfigured to process tailings, and Damtshaa on intermittent care and maintenance. Jwaneng, often described as the richest diamond mine by value, and Orapa, among the largest by area, anchor the country's fiscal revenues and export earnings. Alongside Debswana sits Lucara's Karowe, a medium-volume mine with extraordinary frequency of very large stones—Lesedi La Rona and Sewelo among them—and an ongoing underground project aimed at accessing EM/PK(S) ore at depth in the late 2020s. The value mix is therefore bifurcated: Debswana's steady production feeds the De Beers sales system, while Karowe's exceptional stones sell via tenders and bespoke channels that can swing quarterly cash flows. (6)
Both countries have pressed for "beneficiation," retaining more value by sorting and polishing domestically and by building jewellery ecosystems. Botswana, in particular, renegotiated its sales arrangements with De Beers to increase local availability of rough and expand in-country activities. Yet the macro backdrop has turned challenging. The natural diamond market's downturn since 2023, plus the market share gains of lab-grown stones, have dented revenues and inventories across miners and midstream manufacturers. Botswana's diamond-linked GDP and foreign earnings have therefore been under pressure, and Debswana has temporarily curtailed some processing capacity in 2025 in response to weak demand, underscoring how even the sector's best jurisdictions are exposed to global cycles.
South Africa's challenges differ in texture. Years of electricity rationing and freight bottlenecks have inflated operating costs and disrupted flows of consumables and concentrates, though there have been recent signs of stabilisation at the power utility and marginal improvement in rail and port performance. Illegal mining—"zama zamas"—poses safety, environmental and security risks around historic diggings and active operations. Producers have responded with higher on-mine security, technology for remote monitoring and ore-sorting efficiencies to offset cost inflation. Policy efforts to open rail to private participation aim to relieve logistics constraints that have hurt broader mining exports; the test will be sustained execution. (7)
Geologically, both countries mine Archean-Proterozoic kimberlite pipes, but in different maturity phases. South Africa's current value is concentrated in deep, technically complex underground ore bodies, plus specialist production of rare blues at Cullinan. Botswana offers lower-risk, large-scale open pits with high value per carat at Jwaneng and an outlier of ultra-large stones at Karowe. In both, the medium-term narrative hinges on capital discipline, underground transitions, and the industry's success in re-differentiating natural diamonds from lab-grown at retail.
Diamond mining begins with exploration—geophysical surveys, indicator mineral sampling and drilling to locate kimberlite or lamproite pipes and to test grade variability. Economic studies weigh carats per tonne, value per carat and strip ratios against capital and operating costs. If a project clears those hurdles, development proceeds to one of several mining modes. Open-pit mining is the default for near-surface pipes: successive benches are blasted and hauled to a plant, but pits eventually become too deep and expensive to strip. At that point, operators either transition underground or close and retreat tailings. Underground options include sub-level retreat and block caving, which induce ore to fragment and flow under gravity from drawpoints; the choice depends on rock competence, ore geometry and stress regime. Alluvial mining exploits diamonds weathered out of primary pipes and concentrated in rivers or paleo-channels using excavators and screening plants, typically on a small scale. A specialised sub-sector is marine mining along Namibia's coast, where purpose-built vessels deploy crawler systems to vacuum diamond-bearing gravels from the seabed before dense-media separation on board. (8)
Processing is as decisive as drilling. Run-of-mine ore is crushed in stages and sized. Dense-media separation separates the heavy mineral fraction from lighter gangue using ferrosilicon slurries. Modern plants increasingly rely on X-ray transmission (XRT) sorters and pulsed X-ray fluorescence to detect the high atomic number signature of diamonds, reducing the need for grease tables and improving recovery of large Type II stones without breakage. Final recovery and security take place in controlled "red areas," with concentrated hand-sorted and sealed. Tailings may be retreated with finer-cut XRT or re-crushing to scavenge missed carats; several Botswana operations have built dedicated plants for this purpose to extend mine life. (9)
The marketing chain varies by producer. Integrated majors such as De Beers sell rough through contracted "sights," offering assortments across sizes and qualities ten times a year. At the same time, independents like Lucara use tenders, often for exceptional stones that command discrete premiums. Downstream, manufacturers saw, cleaved, and polished; grading labs issued certificates; wholesalers and retailers channel finished goods to consumers. The rise of lab-grown diamonds has bifurcated the pipeline, with synthetics—produced by HPHT presses or CVD reactors—now dominating industrial uses and gaining share in jewellery, pressuring natural rough prices and forcing supply discipline among miners. Sanctions and traceability requirements have also increased the administrative burden, with origin-tracking technologies becoming a competitive necessity.
South Africa's diamond sector contends with a practical trifecta of energy, logistics and security. Years of load-shedding forced mines to invest in back-up generation and to reschedule energy-intensive crushing and hoisting, raising costs and complicating maintenance. Although Eskom's performance has improved in 2024–25, any relapse would immediately erode underground productivity where ventilation, dewatering and refrigeration are power-hungry. Rail and port bottlenecks have likewise constrained inbound reagents and outbound shipments for the broader mining industry; incremental improvements at export terminals are encouraging, but the rail network's recovery will be a multi-year process that depends on regulatory reforms and private participation.
Security and social risks are acute around legacy diggings in Gauteng and the Northern Cape. Illegal mining —often linked to organised crime—creates safety hazards underground, diverts ore, damages infrastructure and exposes companies to community tensions. Operators have had to harden shafts and dumps, expand surveillance and collaborate more closely with law enforcement. These measures add non-productive cost and can slow development schedules.
Mature geology adds a technical layer of difficulty. Many South African kimberlites have transitioned to deep underground mining where ground stress, heat and water inflows complicate cave management and raise capital intensity. Ageing plants demand periodic upgrades to keep recovery factors high—especially for Type IIb and large-stone profiles where breakage risk drives value loss. Environmental compliance around water stewardship, dust, tailings and closure liabilities is stringent and appropriate, but it requires predictable permitting timelines and community engagement to avoid delays. In this context, projects like the Venetia Underground conversion illustrate a path forward: heavy upfront spend to secure decades of future production, buttressed by efficiency technologies such as XRT sorting and digital cave monitoring. The sector's medium-term outlook therefore hinges on sustaining operational gains at power and rail utilities, suppressing illegal mining through coordinated policing and community programs, and preserving investor confidence during a difficult global pricing cycle.
South Africa is where large-scale diamond mining began, following the 1867 discovery near Kimberley. The country's early mines, such as Kimberley's "Big Hole," transformed diamonds from rare curiosities into a global commodity. This laid the foundation for De Beers and the modern diamond market.
Key active mines include the Venetia mine (De Beers' largest in the country, now transitioning underground), Cullinan (famous for producing the world's largest rough diamond in 1905), and Finsch. Smaller alluvial and tailings operations also contribute, though on a lesser scale.
Mines contend with deep-level technical difficulties, high energy costs from power shortages, and logistics bottlenecks on rail and ports. Additionally, illegal mining activities ("zama zamas") threaten safety and security. Despite these issues, major investments such as the Venetia Underground project demonstrate the sector's resilience.
Diamond mining in South Africa remains vital but fraught with risks, particularly in deep underground operations where rock stress, heat, and water inflows intersect with security threats from illegal mining. These conditions heighten dangers for workers and increase costs for operators. Strengthening safety protocols is essential, but technology offers a critical edge: advanced miner monitoring systems can track personnel in real time, ensure rapid response in emergencies, and deter unauthorised access. By combining stricter oversight with digital monitoring, South Africa's diamond sector can safeguard its workforce while maintaining productivity in an increasingly complex environment.
Delve deeper into one of our core topics: Miner safety
Carat is the standard unit of weight for diamonds and other gemstones, equal to 200 milligrams. A diamond's carat weight strongly influences its value, but price does not increase linearly: larger stones are rarer, so their per-carat price rises disproportionately. Carat weight interacts with cut, colour, and clarity—the "Four Cs"—to determine overall quality and market price. (10)
References:
(1) https://www.ft.com/content/8fb71f5e-a7be-4b5a-a9d2-21bfa6abe1d1
(2) https://pubs.usgs.gov/periodicals/mcs2025/mcs2025-diamond.pdf
(3) https://kimberleyprocessstatistics.org/static/pdfs/public_statistics/2023/2023Charts.pdf
(4) https://en.wikipedia.org/wiki/Jwaneng_diamond_mine
(5) https://www.petradiamonds.com/our-business/our-operations/cullinan-mine/
(6) https://lucaradiamond.com/operations/karowe-mine/
(7) https://www.mineralscouncil.org.za/work/illegal-mining
(8) https://debmarine.com/articles/news/debmarine-namibia-unveils-next-generation-crawler-technology-ahead-of-namibian-deployment
(9) https://www.debswana.com/letlhakane
(10) Shigley, J.E. (2002). Gems & Gemology in Review: Diamonds. Gemological Institute of America.
Note: This article was partly created with the assistance of artificial intelligence to support drafting.