Despite lowering operating expenses and expanding AI-driven tools, De Beers grapples with falling diamond prices and volatile profits on its road to reinvention
Fluctuating Profits Amid Declining Costs
Over the last five years, De Beers has shown operational discipline by significantly reducing operating costs, even as its profitability remains uneven.
- In 2020, De Beers earned just $0.3 billion in profit amid a global collapse in luxury demand during the pandemic.
- Profits peaked in 2022 at $1.4 billion, thanks to a temporary rebound in diamond consumption.
- But in 2023 and 2024, profits fell back to $1.0 billion and $0.4 billion, respectively, highlighting deeper challenges in sustaining revenue growth.
Cost Discipline: A Strategic Advantage
While profits wavered, De Beers achieved a steady decline in operating costs.
- From $4.5 billion in 2020, costs dropped each year to $3.5 billion by 2024—a 22% reduction.
- These savings are largely attributed to mining efficiency, supply chain optimization, and automation across operations.
This leaner model positions De Beers to better withstand downturns, but it’s not enough to offset broader market trends.
Diamond Price Decline: The Invisible Anchor
The profitability gap is closely tied to diamond price fluctuations, particularly in 2020 and 2025.
- In 2020, rough diamond prices fell nearly 15%, reaching decade-lows as the pandemic shut down retail and manufacturing pipelines.
- While prices recovered modestly by 2022, they began softening again, and by mid-2025, they remain below pre-pandemic levels.
- Contributing factors include the rise of lab-grown diamonds, economic stagnation in major luxury markets, and changing consumer preferences.
As a result, even as De Beers improves internal efficiency, its core commodity struggles to maintain value.
From Messaging to AI: Expanding the Product Suite
To future-proof its business, De Beers is shifting beyond raw materials, investing in digital and AI-driven tools:
- Key products include click-to-chat ads, an AI campaign copilot, agent assist, and a campaign manager.
- These innovations aim to streamline marketing and customer engagement across industries like banking, e-commerce, retail, and travel.
- By powering over 120 billion messages annually, De Beers is positioning itself as a tech-enabled messaging and engagement platform, not just a mining company.
IPO and Strategic Outlook
Looking forward, De Beers is preparing for an IPO, potentially within the next 18–24 months.
- The company is weighing a listing on Indian stock exchanges, where WhatsApp usage is high and its digital communication tools are more widely understood.
- However, because De Beers is domiciled in the U.S., flipping to India could trigger tax liabilities, requiring additional funding to navigate.
“The IPO is the one thing that we don’t control entirely. The calendar depends as much on external factors as it does on the company,” said CEO Beerud Seth.
Caught Between Costs and Commodity Pressures
De Beers has built a leaner, more innovative business, but diamond price instability and evolving global trends have prevented those gains from fully translating into profit.
With stronger digital capabilities and a broader international presence, De Beers may yet reclaim consistent growth—but only if it can align operational progress with rising demand or stabilized pricing in the years ahead.
