Diamond industry 'in trouble' as lab-grown gemstones tank prices further

"A diamond is forever," but perhaps not for the increasing number of consumers spurning the gemstone for lab-grown counterparts, gold and even other colored gemstones.

The slogan was coined by diamond giant De Beers in 1948, capturing the impression of security and romance. But not all relationships withstand the test of time.

The company's largest shareholder Anglo American plans to divest De Beers as it restructures its business after rejecting a takeover bid from BHP. Anglo American CEO Duncan Wanblad told the Financial Times that selling De Beers will be "the hardest part" of the company's radical restructuring.

"Diamonds don't really fit in anymore despite the strong legacy of De Beers under Anglo," said independent diamond industry analyst Paul Zimnisky.

"Anglo is ultimately going to do what its shareholders want, and it seems they want to focus on a longer-term strategy of commodities that support the green infrastructure buildout, for example copper," he told CNBC.

The demand for diamonds has declined as its allure fades in a key consumer market: China.

Declining marriage rates as well as growing popularity for gold and lab-grown gems all drove down Chinese demand for diamonds, said market research firm Daxue Consulting. The end of pandemic restrictions also saw consumers channeling their spending toward travel experiences instead of diamond products.

Diamond prices have fallen 5.7% so far this year, according to Zimnisky's rough diamond index, declining more than 30% from their all-time high in 2022.

De Beers once commanded a monopoly on the diamond market, but its share has fallen. Economic conditions led the company to cutting prices by 10% at the start of the year, Bloomberg reported citing sources.

"Last year was a