Debmarine Namibia is grappling with unprecedented challenges as a surge of cheap rough diamonds and the rapid rise of lab-grown synthetics significantly erode its market share and profitability. 
The company’s struggles highlight the impact of these disruptive forces on the natural diamond industry. Willy Martens, Chief Executive Officer of Debmarine Namibia, delivered a stark assessment at the company’s annual engagement event this week, detailing declining revenues, production cuts, and an uncertain future for Namibia’s crucial economic sector.
Mertens revealed a consistent decline in natural diamond demand, with global sales falling by 3.5% in 2024. Key consumer markets, the United States and China, have been particularly affected. China experienced a significant 21% drop in diamond sales for the third consecutive year. “Global retail demand for natural diamond jewellery was estimated to be down 3.5% in 2024,” Mertens confirmed. “The US market remained relatively flat, while China saw a sharp 21% decline for the third year running.”
The market downturn has forced diamond producers to adapt, with some reducing output while others flood the market with lower-priced rough diamonds. Mertens cited Russia’s gradual reduction in sales, suggesting a production adjustment to align with lower demand. Conversely, Angola has increased its supply by nearly 60% while slashing prices by 30% to 55%. “Russia’s gradual reduction in sales, with minimal price adjustments, suggests a production cut to match lower demand,” Mertens explained. “Conversely, Angola achieved US$1.5 billion in sales in 2024, a 27% reduction from 2022, by increasing volumes by almost 60% and cutting prices between 30% and 55%.”
Adding to the industry’s woes is the surging popularity of lab-grown diamonds (LGDs), which directly compete with natural stones. The wholesale price of LGDs has plummeted by 92%, though retail mark-ups remain substantial. “Although the wholesale price has fallen dramatically by 92%, retail prices remain relatively high, enabling LGDs to compete directly with natural diamonds,” Mertens noted. “For example, a 2-carat LGD of similar quality sells for US$400 at Walmart and US$4,640 at a high-end independent jeweller, demonstrating the price disparity.”

THE RISE OF SYNTHETIC DIAMONDS AND ITS IMPACT

The rapid advancement in LGD technology has significantly disrupted the natural diamond market. LGDs offer a more affordable and ethically sourced alternative, appealing to a growing segment of consumers. The global synthetic diamond market is estimated to be worth billions of dollars, and its growth is projected to continue. This surge has directly impacted natural diamond prices and sales, as consumers increasingly opt for synthetic alternatives. The perception of LGDs as being “conflict-free” and environmentally friendly further fuels their popularity.
Debmarine’s revenue has plummeted by 38% to N$8.3 billion, severely impacting Namibia’s economy. Profits before tax and other deductions have collapsed by 86%, and free cash flow has shrunk by 91%. In response, Debmarine has reduced diamond production by 13% in 2024, with a further 5% cut planned for 2025.
“We were 35% below 2015 prices, and year-to-date for 2025, we are 50% down from 2015,” Mertens stated. “Few businesses could survive such a price reduction in a world of ever-increasing costs.”
Despite these challenges, Debmarine has invested in new technology, including two additional crawlers for the Benguela Gem vessel, which now contributes 37% of the company’s total diamond output. “The Benguela Gem’s significant contribution, producing 602,000 carats or 37% of total production from a fleet of seven vessels, is noteworthy,” Mertens added.
With diamond prices at a decade low, Namibia’s diamond industry faces an uncertain future. Mertens called for urgent government intervention and a robust marketing push to promote natural diamonds. “We will continue our drive towards a safety-resilient organization,” he affirmed.
Beyond financial survival, Debmarine remains committed to Namibia. With 92% of its workforce being Namibian, the company has maintained local employment and invested N$130 million in training, despite financial pressures. “We have approximately 72 trainees and invest close to N$130 million in training and development, even in these difficult times,” Mertens said. “We believe in inclusivity, with 49% of our shore-based employees being women and 82% of our senior management from designated groups.”
He further emphasized that Debmarine Namibia has contributed N$15 billion to government revenues over the past five years, making it the largest single source of state income. “With a N$15 billion contribution to the fiscus over the past five years, Debmarine Namibia remains the largest contributor to government revenue, striving to make a difference in the lives of every Namibian,” Mertens emphasized.
As the diamond industry grapples with market downturns, competition from synthetic diamonds, and economic uncertainty, the question remains: Can natural diamonds rebound? Mertens remains optimistic but acknowledges that survival hinges on aggressive marketing, consumer education, and international collaboration.
“Despite the subdued financial performance, we believe in the strong fundamentals of the diamond market,” he concluded. “With the right investments and strategies, Debmarine Namibia remains a vital source of wealth for Namibia and its people.”