Some of the world’s largest diamond mines are nearing the end of their productive lifecycle. As mined diamonds become rarer, we may see further differentiation between mined and lab-grown diamonds. The increased rarity of mined diamonds may make more room for LGD in fine and luxury jewelry, and diamonds from mines nearing depletion may become highly sought-after collectors’ items.

Diamond rarity has always been a product of market controls rather than nature. Historically, supply has been tightly controlled to meet demand without flooding the market and devaluing the product. Contrary to consumer perception, diamonds are not among the rarest gemstones on Earth. That may change soon.

We are all probably aware of the story of Tanzanite. The famously rare colored gemstone is found only in a 15 sq km area (about 5 sq mi) in Tanzania. The handful of mines in the region are close to depletion, with only about a decade of productivity remaining. Once these mines are depleted, there will be no new Tanzanite roughs. A similar fate awaits other single-source gemstones such as black opal. They will soon join Paraiba tourmaline and Kashmir sapphire as rare and valuable collectors’ pieces.

Though the situation isn’t quite as dire for diamonds, many of the most productive mines in operation today are nearing the end of their lifespans.

The Argyle Mine Closure

One of the most well-known examples of diamond mine depletion is the Argyle mine in Western Australia. In 2020, its final year of operation, the mine accounted for 10% of global diamond production, according to a recent National Jeweler article. With its closure, the world lost its primary source of pink diamonds, and Australia’s diamond production fell to less than 1% of its pre-closure levels. Collectors flocked to the rare gem, and prices for Argyle pink diamonds soared as high as $1 million per carat.

The Future of Mined Diamonds

Is this the end for diamonds? Not quite. At least through the end of the decade, supply will remain on pace with demand. In the meantime, new technology is making it easier to discover new sources, and as the old mines close, new ones open. Canada, Australia, India, and Botswana are all investing in exploration as extant mines reach the end of their productive lifespan. However, massive new discoveries seem unlikely, and if someone does discover a potentially profitable new diamond deposit, it would take years to get a mine running.

We may have already passed “peak diamond,” or the point of maximum diamond production after which production begins to decline irrevocably. As new supply decreases, diamond prices will certainly rise. A diamond from a mine running dry will have a unique selling point and could possibly become a collector’s item with an eye-watering price tag, like those Argyle pink diamonds.

We could also see further segmentation within the mined and lab-grown categories. Expertly cut lab-grown diamonds could justify luxury prices, with lower-quality LGD relegated to fashion jewelry. Similarly, diamonds from old mines could become more valuable than diamonds from mines that will be producing millions of carats for years to come.

All of this might not be much cause for concern in the immediate future. Though diamond production is slowing and old mines are nearing the end of their productive lifespans, many of the world’s largest diamond mines still have another 30 years of productivity left.