De Beers has been quietly selling rough diamonds at sharply marked-down prices to a small handful of customers, in a highly unusual move that’s fueling tensions across an industry already mired in crisis.
The secret deals appear aimed at reducing De Beers’s ballooning inventories without openly cutting prices — something the company typically tries to avoid, but which has led to a big gap between its official pricing and valuations in the wider diamond market. De Beers usually holds 10 sales in Botswana each year for its roughly 70 registered buyers, where prices are non-negotiable.
In recent months, De Beers has sold hundreds of millions of dollars of rough diamonds through side deals with a small number of its customers, according to buyers who asked not to be identified discussing private information. The company has been selling the stones at a 10 per cent to 20 per cent discount to its set prices, the people said.
Rumors about the sales are adding to tensions among De Beers’s buyers who weren’t selected for the special deals, and are still expected to pay the company’s official rate at its set-piece sales. The deals show the dilemma De Beers faces as it comes under pressure from owner Anglo American Plc to boost sales, while it’s also seeking to support the global market by avoiding across-the-board price cuts.
The almost unprecedented move by De Beers comes at a pivotal time for the company that invented the modern diamond industry. The diamond market has finally started showing signs of stabilizing after a prolonged demand crisis that sent global prices plunging, although President Donald Trump’s trade war has created fresh turmoil, with the diamond industry scrambling to avoid proposed levies.
De Beers itself is under pressure from Anglo to reduce costs and stem losses. The larger miner is seeking to sell the diamond business as part of its own turnaround strategy announced last year. While a sale may take some time, De Beers’s management is under strict instructions to stop building stockpiles of unsold stones. De Beers has also been drastically cutting costs, including shuttering its lab-grown Lightbox unit last week.
A spokesperson for De Beers declined to comment.
De Beers wields considerable power in the rough-diamond market because of its role as the biggest supplier of new diamonds.
At its normal sales, De Beers sets the prices and tells its customers – known in the industry as “sightholders” — how much they are expected to purchase. While buyers can refuse, doing so can jeopardize their access to supplies in the future.
De Beers typically tries to avoid price cuts because its outsize influence means such a move can have a devastating impact on sentiment. Recent signs that the market is starting to recover mean that now would be a particularly bad time to officially lower prices.
But the situation has grown increasingly fraught over the past year, as De Beers’s reluctance to make significant cuts has left its official rates far higher than plunging valuations in the wider market. Bloomberg reported previously that many of its customers had stopped buying, and some had stopped showing up at the sales at all.
Adding to the tensions, De Beers told its clients late last year that it’s likely to reduce their number in 2026.
Now, buyers who haven’t been tapped for discounted deals are complaining there’s a lack of transparency about which customers have been selected and why. Some customers also risk being undercut by rivals when it comes to selling polished stones to retailers.
The unusual move by De Beers comes as the battered diamond market grapples with the implications of Trump’s import tariffs. The US is the world’s biggest diamond market but doesn’t mine any gems itself. Roughly 90 per cent of diamonds are manufactured in India’s giant cutting and polishing centers.
All diamond imports to the US are currently subject to a 10 per cent tariff, and face further levies when the 90-day pause on reciprocal tariffs comes to an end.
Traders have already poured large volumes of stones into the US market to get ahead of tariffs, but fear a slump in demand if US consumers are forced to pay more because of the levies. Purchases have slowed as companies responsible for cutting and polishing worry about being stuck with inventory that is no longer profitable to sell to the US. The industry is lobbying for an exemption from tariffs.
