The global diamond industry has survived repeated price collapses over nearly five decades, recovering from economic recessions, oversupply and financial crises.
The downturn confronting producers in 2026, however, raises a more difficult question whether natural diamonds can regain their former market strength as laboratory-grown alternatives reshape consumer demand.
Historical research by Bain & Company shows that the industry experienced major downturns in 1980, 1985, 2009 and 2015, with recovery periods varying according to the causes of each crisis.
While some were driven by wider economic conditions, others originated within the diamond supply chain, making recovery more difficult.
For Namibia, where diamond mining has contributed substantially to government revenue, exports and employment, the distinction is important because Debmarine Namibia and Namdeb operate in an international market whose fortunes have repeatedly changed, often for reasons beyond the control of producing countries.
The current downturn follows one of the industry’s strongest recoveries, when demand rebounded after the Covid-19 pandemic and diamond prices rose sharply during 2021 and early 2022.
Four decades of fluctuations
Bain’s Global Diamond Report 2019 examined historical price movements and found that downturns caused by problems within the industry generally took longer to recover from than those associated with wider economic crises.
During the 1980 crisis, recession and inflation contributed to a speculative investment bubble that eventually collapsed. Rough diamond prices fell by 19%, while polished diamond prices declined by 60%, before prices recovered to pre-crisis levels within approximately two years.
Another downturn followed in 1985 when production from Australia’s Argyle mine contributed to an oversupply of rough diamonds. Prices fell by 26%, prompting producers to hold back supplies to restore balance between production and demand. Recovery again took approximately two years.
The global financial crisis of 2008 and 2009 delivered another shock as consumers reduced discretionary spending and diamond jewellery demand declined by approximately 10%.
Bain calculated that rough diamond prices fell by 13%, while producers responded by reducing sales by 50% and production by 26%. Prices began recovering within six months and returned to pre-crisis levels within approximately two years.
However, the downturn that emerged in 2014 and 2015 proved more persistent.
Weak polished diamond sales, slower retail expansion in China and excessive inventories in the cutting and polishing industry caused rough diamond prices to fall by approximately 15%.
Producers reduced sales values by 24%, but Bain found that prices had still not returned to their pre-crisis levels when its 2019 report was published.
The findings demonstrated that recovery was not automatic and that the industry’s ability to restore prices depended on the underlying causes of each downturn.
Pandemic collapse
The Covid-19 pandemic delivered another severe blow to the industry in 2020 as jewellery stores closed, international travel stopped and diamond cutting centres experienced operational disruptions.
De Beers reported that its total revenue fell to US$3.4 billion in 2020, while rough diamond sales declined to US$2.8 billion.
However, the recovery during 2021 was unexpectedly strong, with De Beers’ revenue increasing to US$5.6 billion as consumer spending recovered, particularly in the United States.
The momentum continued into 2022, when the company’s revenue reached US$6.6 billion and its average realised rough diamond price increased from US$146 per carat in 2021 to US$197.
Namibia benefited from the recovery, with diamond production increasing from 1.47 million carats in 2021 to 2.14 million in 2022, supported by the commissioning of Debmarine’s Benguela Gem and higher-grade production at land-based operations.
Production increased further to 2.33 million carats in 2023, even as international diamond demand weakened, demonstrating that higher mining output does not necessarily coincide with stronger market conditions.
The market turns again
The recovery began losing momentum during the second half of 2022 as inflation, higher interest rates and weaker consumer confidence affected spending on luxury goods.
By 2023, De Beers was reporting a substantial deterioration in rough diamond demand, with annual revenue declining from US$6.6 billion in 2022 to US$4.3 billion.
Its average realised rough diamond price fell from US$197 to US$147 per carat, representing a 25% decline, while rough diamond sales decreased as cutting and polishing businesses struggled with excess inventories.
In India, diamond manufacturers introduced a voluntary suspension of rough diamond imports between 15 October and 15 December 2023 to reduce stockpiles and restore balance in the supply chain.
The Bank of Namibia subsequently reported that the International Diamond Exchange price index declined by 18.2% during 2023, reflecting weaker demand in major consumer markets, excess inventories and growing competition from laboratory-grown diamonds.
The downturn continued through 2024 and 2025, prompting producers to reduce output, manage inventories and reconsider capital expenditure.
Why the latest crisis is different
Unlike earlier downturns driven largely by recession or temporary oversupply, the present crisis combines weak consumer demand with changes in the structure of the jewellery market.
Laboratory-grown diamonds have become increasingly competitive, particularly in lower-priced jewellery categories, where consumers can purchase larger stones for substantially less than comparable natural diamonds.
De Beers acknowledged in its July 2026 production report that synthetic diamonds continued to affect demand for lower-value natural diamonds, while geopolitical and economic uncertainty added pressure on consumer confidence.
However, stronger pricing for higher-value diamonds helped support a relatively stable overall price index during the second quarter.
The company’s first-half financial results nevertheless revealed the scale of the challenge.
De Beers’ rough diamond production increased by 46% to 14.9 million carats, but consolidated rough diamond sales revenue declined from US$1.7 billion to US$1.3 billion.
Its average realised rough diamond price fell by 32%, from US$155 to US$105 per carat. The decline reflected a 16% reduction in the average rough diamond price index and a greater proportion of lower-value diamonds in the sales mix.
Despite these pressures, De Beers reduced its underlying EBITDA loss from US$189 million in the first half of 2025 to US$113 million during the corresponding period of 2026, largely through improved trading margins and lower operating costs.
Namibia waits for the next recovery
The prolonged downturn has already forced significant adjustments in Namibia’s diamond industry, including the retirement of older Debmarine vessels and investment in newer recovery technology.
Debmarine’s production increased from 286,000 carats in the final quarter of 2025 to 354,000 carats in the first quarter of 2026 and 370,000 carats in the second quarter.
Although this represents two consecutive quarterly increases, production during the first six months of 2026 remained approximately 14% below the corresponding period of 2025.
The improvement indicates that offshore mining activity is recovering from its late-2025 low, but it does not establish that the international market or Debmarine’s profitability has recovered.
The company has also invested approximately N$1.1 billion in two next-generation seabed mining crawlers and an upgraded recovery system aboard the Benguela Gem, with the aim of improving mining efficiency and recovering additional high-value diamonds.
Debmarine chief executive Willy Mertens has previously identified weak economic conditions in major diamond-consuming countries, geopolitical tensions, tariffs and competition from laboratory-grown stones as pressures facing the natural diamond industry.
He has also emphasised the importance of promoting the rarity, authenticity and economic contribution of natural diamonds as part of efforts to strengthen consumer confidence.
