The diamond pendant worn by Bogolo Kenewendo at a recent Cape Town mining conference was more than a personal statement it symbolised Botswana’s unwavering commitment to the very resource that transformed its economy.

For decades, De Beers has been synonymous with Botswana’s rise, helping elevate the nation into one of Africa’s most prosperous economies. Now, Botswana is preparing to deepen that relationship, signalling intentions to increase its existing 15% stake in the iconic diamond firm a bold move that underscores its long-term confidence in the sector.

Supply Tightens as Market Shows Early Recovery

At the same time, signs of recovery are emerging across the global diamond market. Russian mining giant Alrosa has reported price increases of between 6% and 9% on rough diamonds since the start of the year, with the strongest gains seen in the high-value 2 to 10 carat segment a category that represents roughly 80% of its production value.

According to CEO Pavel Marinychev, the market for larger stones — particularly those above 3 carats — has stabilised, with tightening supply now becoming increasingly evident. Price improvements, initially modest in January, have accelerated through February and March, with nearly half of Alrosa’s regular assortment seeing upward revisions.

Global Production Faces Structural Decline

Looking ahead, the supply side of the diamond industry is under significant pressure. Alrosa forecasts that global diamond production will fall below 100 million carats by 2026 the lowest level in two decades.

This decline is being driven by a combination of resource depletion and operational cutbacks. Alrosa itself has already suspended output at several smaller projects, while major deposits are reaching the end of their lifecycle. Notably, the Diavik Diamond Mine, operated by Rio Tinto, is approaching closure, with other Canadian mines expected to follow.

The result is a growing scarcity of large, high-quality stones a dynamic that could underpin prices in the years ahead.

Auction Market Confirms Demand for Rarity

Further evidence of resilience in the diamond market comes from the secondary sector. Christie’s New York recently reported strong results from its “Jewels Online” sale, which achieved $8.5 million and exceeded expectations by reaching 131% of its low estimate.

Among the highlights was a 10.02-carat D-colour, internally flawless Type IIa diamond ring by Tiffany & Co., which sold for $521,000. Another 10.03-carat D-colour Type IIa diamond achieved $508,000 significantly above its estimate.

Provenance also played a key role, with a historic jewellery set from Elizabeth Taylor’s collection selling for over seven times its low estimate.

Christie’s noted strong global participation, with buyers spanning the Americas, Asia-Pacific, and EMEA regions reinforcing the enduring demand for rare, high-quality, and well-documented diamonds.

Strategic Outlook

Botswana’s move to increase its exposure to De Beers is not without risk but it is a calculated one. With global supply tightening, major deposits depleting, and demand for exceptional stones holding firm, the country is effectively positioning itself to capture greater long-term value from a shrinking resource base.

For the global diamond trade, the message is clear: scarcity is returning and with it, the potential for renewed price strength, particularly at the top end of the market.