Anglo CEO Admits Diamond Industry Underestimated Lab-Grown Threat

8

The global diamond industry underestimated the scale of the challenge posed by lab-grown diamonds, according to Anglo American CEO Duncan Wanblad, in a striking acknowledgement that comes as the mining giant moves ahead with plans to sell its controlling interest in De Beers.

Wanblad said the industry may have been too slow to react to warning signs as laboratory-grown stones gained consumer acceptance and rapidly expanded their share of the jewellery market. Speaking at a recent press conference, he acknowledged midway through the discussion covered in this Gems News report that, with hindsight, the industry could have responded more aggressively to the competitive signals emerging from lab-grown diamonds.

Diamond Downturn Proves Different

Natural diamond producers have weathered numerous downturns over the decades, but the present crisis has proved considerably more complicated because it combines weak demand with a fundamental change in consumer choice.

Wanblad indicated that expectations were initially shaped by the diamond industry’s historical experience, in which periods of falling demand and prices were generally followed by relatively rapid recoveries.

“Mostly diamond markets, when they go through dips, recover very rapidly,” he said, explaining why there had been an expectation that the latest downturn might follow a familiar pattern.

The growing popularity of lab-grown diamonds, however, has changed that equation. Manufactured stones can be produced and sold at substantially lower prices than their natural counterparts, offering consumers the appearance and physical properties of diamonds without the premium traditionally associated with mined gems.

Retailers have also embraced the category, benefiting in many cases from increased sales volumes and attractive margins.

De Beers Faces Heavy Financial Pressure

The consequences have become increasingly visible in De Beers’ financial performance.

During the first half of 2026, De Beers reported an average realized rough diamond price of $105 per carat, representing a 32% year-on-year decline. The company also recorded an underlying EBITDA loss of $113 million as difficult trading conditions continued to weigh heavily on the world’s best-known diamond miner.

The $105-per-carat average was even below levels recorded during the pandemic-hit first half of 2020, illustrating the severity of the pressure facing the natural diamond sector.

Anglo American’s wider business has performed considerably better, with underlying group earnings reportedly rising by around a third to $4 billion, helped by stronger copper prices. Diamonds, however, remain one of the major weak points in the portfolio.

Anglo has repeatedly reduced the carrying value of De Beers, including a further $2.3 billion impairment announced in February 2026.

Natural Diamond Supply Set to Shrink

Wanblad also delivered a stark assessment of future natural diamond production, saying approximately one-fifth of existing supply could disappear over the next 12 months or so.

Significantly, he suggested that relatively few of the affected mining operations were likely to return to production.

The contraction is already becoming visible. De Beers has paused production at its Venetia mine in South Africa, while difficult market economics have forced other producers across the industry to reconsider mine plans, production levels and capital expenditure.

A substantial reduction in global supply could eventually provide some support for natural diamond prices, although it remains uncertain whether tightening production will be sufficient to counter changing consumer preferences and intense competition from lab-grown alternatives.

Lightbox Strategy Comes Full Circle

De Beers itself made one of the industry’s most surprising moves into laboratory-grown diamonds when it launched Lightbox in 2018.

The venture represented a dramatic departure for a company that had spent generations building its identity around the rarity, emotional significance and enduring value of natural diamonds. Lightbox deliberately positioned lab-grown stones as a lower-priced jewellery product rather than a direct equivalent to natural diamonds.

That experiment has now ended. De Beers announced in 2025 that it would close Lightbox as part of a renewed focus on natural diamonds.

The decision appears particularly significant in light of Wanblad’s acknowledgement that the disruptive impact of laboratory-grown diamonds was greater than the industry originally anticipated.

De Beers Sale Advances Without Preferred Bidder

Against this difficult market backdrop, Anglo American is progressing with the disposal of its 85% interest in De Beers as part of its broader corporate restructuring.

Anglo has said that the sale process is advancing, although it has not selected a preferred bidder and Wanblad indicated that the company was not operating exclusively with any one prospective buyer.

A consortium led by former De Beers CEO Gareth Penny has been widely linked with the process and has reportedly discussed a potential transaction valuing the diamond company at around $1 billion.

Other groups reportedly involved include consortiums led by Diacore Group executive chair Nir Livnat and Burgundy Diamond Mines non-executive chair Michael O’Keeffe.

The reported $1 billion figure would represent a dramatic contrast with historical valuations of De Beers and underline how profoundly deteriorating diamond-market conditions have affected perceptions of the business.

Natural Diamonds Enter a Defining Period

Wanblad’s comments are particularly notable because they suggest the industry’s present difficulties cannot simply be dismissed as another conventional diamond cycle. Lab-grown diamonds have introduced a structural competitive force at the same time as natural diamond miners confront falling prices, production cuts, mine closures and changing consumer expectations.

Yet shrinking natural supply could eventually alter the market balance. If roughly 20% of existing production disappears and many mines never restart, scarcity could once again become a powerful factor supporting natural diamonds. Much will depend on whether producers and retailers can successfully communicate the rarity, provenance and emotional appeal of natural stones to a new generation of consumers.

For De Beers, the coming months could therefore prove decisive. The identity of its eventual owner, the valuation achieved in any sale and the industry’s ability to reposition natural diamonds against increasingly affordable laboratory-grown competition could shape the global diamond business for years to come. What began as a relatively inexpensive alternative has developed into one of the most consequential disruptions the natural diamond industry has faced in decades, and Wanblad’s acknowledgement suggests the scale of that transformation is now impossible for the sector to ignore.