South Africa’s diamond industry, famed for sales the world over, is looking closer to home to revive its fortunes following the coronavirus slump. Even before the new virus triggered the COVID-19 pandemic, diamond prices and demand were weak. Global economic weakness has exaggerated that and Anglo American’s De Beers unit last week reported a plunge in earnings.
Some of the many small players who polish the rough diamonds that De Beers and other miners unearth say they have been surprised by the extent of lockdown jewelry buying as enforced proximity kindled romance and feel-good spending. South African cutting and polishing firm Nungu Diamonds said its custom-made jewelry sales have grown 60 percent since South Africa imposed a strict lockdown in March.
Customers used their weeks at home for online consulations and were lining up when stores reopened in June, the company’s founder Kealeboga Pule said. “We remain resilient. We fight on,” Pule said at his shop in a Johannesburg suburb. June was the best month in a year, with sales including engagement and wedding rings.
Bucking the trend of rising unemployment, Nungu has hired an in-house jewelry designer — joining a team of five polishers and nine jewellers. Nungu says jewelry prices have held steady. Profit margins, however, could improve as lower global demand has depressed the prices of uncut, unpolished rough stones bought from the mines. Thoko’s Diamonds, another South African company whose business was based on selling rough and polished stones, said it was turning to jewelry.
Zipho Dlamini, co-owner of Thoko’s Diamonds, said in a typical year the family business would supply more than 500 carats. So far this year, the company had sold less than 20 carats and profits have fallen 65 percent as the exports that account for more than half of its business dried up. Thoko’s hopes its new line in earrings will appeal to the local market. “Because of COVID-19 we have managed to move into the jewelry space,” Dlamini said.