The cabinet has approved participation in an international effort to boost the marketing of real diamonds, responding to the increasing appeal of lab-grown gems and funded by a 1% levy on the annual revenues of diamond companies.
The natural diamond market has struggled in the past three years due to rising consumer demand for the cheaper synthetic gems, coupled with global macroeconomic volatility, which has led to lower international prices.
In June representatives from leading African producer nations, trade bodies and De Beers, part of Anglo American, signed an accord aimed at working together to promote natural diamonds and drive global demand.
The signatories intend to allocate 1% of the annual revenue they generate from rough diamond sales to fund the initiative, spearheaded by the Natural Diamond Council.
SA had not initially signed the accord but on Thursday, minister in the Presidency Khumbudzo Ntshavheni announced that the cabinet had approved the department of mineral resources and energy’s participation in international agreements aimed at helping diamond-producing countries better promote and market natural diamonds globally.
“For this to be realised, the cabinet has further approved the diamond industry be requested to contribute 1% of their annual revenues generated from rough diamond sales to support marketing of SA’s real diamonds to enable economic growth and job creation,” Ntshavheni said.
With their lower environmental impact and increasingly competitive pricing, synthetic diamonds are gaining appeal among younger, ethically conscious consumers, a shift that is pressuring traditional diamond miners and retailers to rethink their strategies.
SA is the world’s sixth-biggest diamond producer by volume. Its diamond production dipped 0.9% to about 5.8-million carats in 2024, with total sales of R13bn, down 21% from 2023.
“Lab-grown diamonds are eating into our dinner,” mineral resources minister Gwede Mantashe said at a meeting with diamond producers on Tuesday.
“I’m very convinced the marketing of natural diamonds is a necessary intervention.”
Reuters
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