“It’s been a tough few years in the natural diamond market,” notes Jon Phillips, “seriously challenged by synthetics, lower demand and shrinking supply.”
“How will natural diamonds do when assailed from these diverse crucial market forces? Together, they seem formidable and dominate our concerns for a stable market.”
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On July 15, 2026, the Canadian Gemmological Association hosted Mr. Jon Phillips, a Graduate Gemologist (GG) from the Gemological Institute of America (GIA), to speak about Canadian diamonds.
About Jon Phillips
Phillips has been in the jewellery business for over 40 years and has worked in all of its “facets.” He was the Divisional Manager for Canadian Diamonds at Corona Jewellery Company Ltd. He also worked for BHP Billiton Diamonds in both Vancouver and Antwerp, Birks in Vancouver, and as an instructor at Vancouver Community College. Jon, along with his wife, also ran their own custom jewellery business out of Vancouver; this is where Jon obtained his training as a journeyman goldsmith. Currently, Jon writes the Diamond Market News for Gemworld International’s GemGuide bi-monthly magazine.
Jon is also the past chair of the Assurance Committee of the Responsible Jewellery Council (RJC) and a past member of the Standards Committee. He has also served as a board member for the Canadian Jewellery Association and is a past vice-president of the diamond commission for CIBJO and a past President of the Canadian Diamond Code of Conduct Committee (CDCC).
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It was an unusually appropriate day to talk about the state of the diamond business.
Jon Phillips had barely begun his presentation when he pointed to two pieces of news that had arrived almost simultaneously: Ekati (Canada’s first surface and underground diamond mine, now owned by Burgundy Diamond Mines) had gone into receivership, while only days earlier De Beers had announced the suspension of mining at Venetia (South Africa’s current flagship diamond mine).
“Pretty eventful day,” Phillips began. “I think we timed this talk perfectly.”
For Phillips, a Canadian gemmologist speaking to a (mostly) Canadian gemmological audience, talking about the condition of Canada’s diamond industry was particularly important. And it was there that he began.
https://burgundydiamonds.com/ekati-mine/
Canada Slips to Fourth Place
Phillips opened with the newly released 2025 statistics from the KPCS.
“These are the Kimberley Process Certification Scheme numbers that came out for 2025. Obviously, we’re in 2026, but they only come out at the end of June the following year.”
The rankings are based on the volume of rough diamonds produced — the number of carats mined — rather than the average value of those diamonds. And the latest figures brought some disappointing news for Canada.
“Canada has slipped to fourth place. Angola has surpassed Canada in the number three spot. Canada was number three for a long time.”
That fourth-place ranking reflects 2025 production, when both Ekati and Diavik were still contributing to Canadian output.
By the time Phillips was giving his presentation, however, that picture had changed dramatically.
“After today’s announcement about Ekati, and then Diavik closing earlier this year, Gahcho Kué (49% owned by Mountain Province and 51% owned by De Beers) is the only one left in Canada doing commercial diamond mining.”
Which led Phillips to ask the question that mattered more than Canada’s current ranking:
“How far down the rankings will Canada be next year?”
His answer was not particularly encouraging.
“It could be pretty sad. We could be really far down the list as far as diamond production.”
Phillips wasn’t suggesting that Canada has run out of diamonds.
“I mean, there’s lots of diamonds in the ground here in Canada, as you probably know. So, we’ll have to watch this.”
There is an important distinction here. Diamond resources in the ground are not the same thing as commercially produced diamonds. A country can have enormous diamond resources and still fall rapidly in the production rankings when its major mines close or become uneconomic.
Phillips then pointed to the Democratic Republic of the Congo for an entirely different reason.
“You see the DRC of Congo, their average price per carat is $5.01. That’s not a lot of money.”
The DRC ranks among the world’s larger diamond producers by volume, but those diamonds have an extraordinarily low average value. And that, Phillips argued, places them directly in the part of the natural diamond market facing the greatest competition from synthetics.
“You can imagine that they’re really affected by the synthetics, because the type of diamonds they’re producing are in direct competition with synthetic diamonds.”
That observation would become one of the central themes of Phillips’ presentation: not every natural diamond — and not every diamond mine — is being affected equally.
Russia Is Still Number One
Looking across the rest of the Kimberley Process production table, Phillips noted just how concentrated world diamond production remains.
“The top five account for about 80% of world production. So you can see that it’s fairly heavily concentrated — excuse the pun — from the Congo DRC right up to Russia.”
But one country in particular caught his attention.
“Russia is still number one, which is what’s important about this slide.”
Despite sanctions imposed against Russian diamonds, Russia remains comfortably the world’s largest rough diamond producer by volume.
“They’re still managing to produce twice as many carats as Botswana, the next closest producer.”
Phillips’ interpretation was straightforward.
“Which means that the sanctions really have had little or no effect on Russia. They’re still funneling them through India, China and various countries that do not have the same sanctions as the G7.”
Whether sanctions have changed where Russian diamonds travel is a different question. Phillips’ point here was about production: Russia continues mining diamonds at a level no other country currently approaches.
And with that, Phillips turned to the other source of diamonds that has radically changed the market.
Synthetic Diamonds
Phillips estimated total synthetic diamond production at roughly 15 billion carats annually, with approximately 99% intended for industrial and technological applications rather than jewelry.
“We’re talking drills — I mean, right down to scalpels, to computers, all sorts of industrial and non-jewelry purposes.”
Gem-quality production is only a small fraction of that enormous total.
“They estimate gem-quality synthetic production is only about 100 million carats, however I could not get a concrete number there. I looked all over the place, talked to a few people, and it ranged from 100 to 150 million, as low as 70 million, which I think is a low number. So I put 100-plus just as an approximation.”
That qualification is important. Phillips wasn’t presenting the 100-million-carat estimate as a hard statistic.
Most of that gem-quality production, he said, comes from China, with India increasingly important, particularly in CVD production.
And Phillips discovered another wrinkle while researching the market.
“The curious thing is that people are asking more for CVD diamonds. They’re more popular. Don’t ask me why.”
Following the Diamond Pipeline
From mines — or factories — Phillips followed both natural and synthetic diamonds through the supply chain.
Sorting and evaluation that once centered heavily in Antwerp now takes place in India and Botswana. Dubai has become a major international distribution center. And when it comes to cutting and polishing, one country dominates. “It still holds at about 90% of world production by volume is done in India. And that is for the natural diamond market.” For synthetics, Phillips believes India’s share of polishing is even higher.
Then came what he called an important tipping point.
“For the first time this year — for the first time ever — India exports of synthetic diamonds have been higher than natural diamonds.”
On to Manufacturers
From there the stones move to jewelry manufacturers, retailers and ultimately consumers.
“Now, don’t forget, every step of the way here, somebody is making money.” A consumer buying a diamond is not buying it at mine price, or rough price, or polishing price. Value is added — and margins are taken — at multiple stages of the pipeline.
“Someone takes a percentage — and sometimes a high percentage — and that’s added onto the sale price of your diamond.”
“Natural diamonds may retain some residual value,” he explained, “whereas synthetics don’t. Even with a small residual value, natural diamonds purchased at retail should never be considered an investment.”
That distinction becomes particularly important as the diamond market begins to split.
The K-Shaped Diamond Market
Phillips described today’s diamond business as a K-shaped market. “What’s happening is the more expensive diamonds are actually going up, and are actually still climbing in value.”
At the other end of the market, something very different is happening. “The stones below a carat, maybe a carat and a half, are actually receding in value.”
Phillips compared the phenomenon to watches.
A Rolex and a Swatch both tell time. Both can do their fundamental job perfectly well. Yet one is a luxury product whose price is rising because rarity, prestige, brand and status are part of what the buyer is purchasing. The other competes far more directly on price and utility.
“They both tell time and they both tell time accurately and they both are worn on your wrist… but one keeps going up in value and the other one has dropped considerably in value.”
Phillips sees the same division developing in diamonds. At the upper end are rare, important natural diamonds for which scarcity itself is part of the attraction. At the lower end are commercial natural diamonds competing with synthetic diamonds that may look virtually identical to the consumer and cost dramatically less.
“That’s where the markets are dividing.”
Why the Divide?
It is not merely an academic pricing theory, says Phillips. “We’re still seeing any mine that produces mostly smaller, lower-end goods dropping in value because of their competition with synthetics… and synthetics are much, much cheaper and visually look identical.”
That, he argued, helps explain why mines producing predominantly commercial-quality goods are under so much pressure.
“This is why you saw Renard Diamond Mine closing not too long ago in Quebec. And this is why you see now Ekati (north of Yellowknife) closing, and you see them shuttering Venetia for two years at least.”
At the same time, higher-ticket natural diamond jewelry continues to sell well.
Phillips pointed to market data showing consumers buying fewer pieces but spending more on those they do purchase. “So they’re buying less products but willing to pay more for it.”
Again, he returned to the K. “What we’re seeing is higher prices on higher-ticket items, and lower prices on cheap items.”
$5,000 Natural — or $800 Synthetic?
Nowhere is the split easier to understand than at the jewelry counter.
Phillips described one- and two-carat natural diamonds as the traditional “bread and butter stones” of the trade.
But today the consumer comparison can be startling.
“Here, you can spend between five and ten thousand dollars for a one-carat, in the VS/SI range, whereas your synthetic will sell here for about fifteen hundred retail.”
And in some stores, he noted, synthetic diamonds are being offered for considerably less.
That price difference has allowed synthetics to gain a substantial presence in a market Phillips once thought would resist them: engagement rings.
“The whole engagement process — the sincerity, the meaning for a lifetime and the history and provenance of giving these rings…” Phillips assumed those emotional associations would keep natural diamonds firmly entrenched. But not today.
“Oh, well.”
Consumers had other ideas.
“A lot of consumers are saying, ‘I would rather have a bigger stone for less money, a higher clarity and higher color.’”
Also, for a young couple facing the cost of a wedding, a home and everything else that accompanies starting a life together, the savings can be difficult to ignore.
And still going down
Synthetic prices, meanwhile, continue falling.
Phillips noted that Chinese manufacturers show little indication of reducing production.
“We have an oversupply issue. Meaning exactly what it says — China is pumping them out like there’s no tomorrow. So they’re killing their own market, value-wise.”
He has even seen retailers advertising synthetic diamonds as essentially free with the purchase of the mounting.
“They’re so cheap at $70 a carat, they can afford to absorb that seventy or one hundred or two hundred dollars in the mounting price.”
“The synthetic diamond is now sort of an added feature. I think we’ll call it that.”
Too Perfect for Their Own Good?
As synthetic diamond prices decline, their quality remains remarkably high.
“Synthetic diamonds are too perfect for their own good.”
Phillips noted that many synthetic diamonds offered in the market are VS or better, with large numbers in the VVS and near-flawless ranges.
“They’re virtually all VVS.”
That creates an odd reversal for gemologists.
For generations, an inclusion was a clarity characteristic that reduced a diamond’s grade and usually its value.
Now?
“It’s actually an advantage… to have an inclusion in your diamond these days, because it’s probably not synthetic.”
Millennials Surprised the Pundits
The younger consumer has surprised Phillips in another way.
“The Gen Xers and millennials… are increasingly favoring colored gemstones over time.”
But what really surprised him wasn’t that they were putting colored stones into their jewelry.
“As a generation, they have totally astonished and astounded the rest of us negative pundits in the fact that they are actually getting married.”
For years, predictions suggested Millennials and Gen X would delay marriage or reject many of the traditional rituals surrounding it.
Instead, engagement jewelry remains important — even if some the choices being made are different.
They may choose a synthetic diamond.
They may choose a sapphire or ruby.
“Their understanding of residual value, the history and the community benefits to buying natural don’t play as much as Boomers took into their final choice,” explains Phillips.
“The newer generations are not concerned with residual value… ‘Because I am never going to sell my diamond… so what do I care?’”
And, he added, many are simply tired of hearing the two sides fight about it. “They’re getting tired of the bickering.”
That opens another door for the jewelry trade: colored gemstones.
“If you’re selling stones, you know, you may look at a beautiful sapphire, ruby or something that’s equally good in jewelry.”
A Tough Market — For Everybody
Phillips was careful not to portray this simply as natural diamonds losing and synthetics winning.
“It’s a tough market for all sides.”
Natural diamond mines are closing or being placed on care and maintenance.
Synthetic manufacturers are battling severe price erosion and oversupply.
Retailers holding synthetic inventory face the unpleasant prospect of watching replacement costs fall far below what they originally paid.
Phillips cited the failure of a prominent synthetic diamond producer as evidence that manufactured diamonds are hardly a guaranteed road to profitability.
At the same time, De Beers’ withdrawal from Lightbox did not, in his view, mean synthetic diamonds were disappearing.
“Don’t get too excited. It’s not.”
Rather, the two markets appear increasingly destined to exist beside one another — but at dramatically different price levels.
Why compare prices?
Phillips even questioned why synthetic diamond sellers continue using natural-diamond price lists as a benchmark.
“They should have their own prices.”
Advertising a synthetic diamond at an enormous percentage “off Rap,” he argued, continues tying its identity to the natural diamond it is supposedly replacing.
“You’re still riding on the coattails of natural diamond.”
If synthetics are going to mature as an independent product category, Phillips believes they eventually need their own pricing structure rather than defining their value by how much cheaper they are than natural diamonds.
What Happens to Canadian Diamonds?
Several Canadian diamond projects remain in the ground. Others are on hold. Companies once focused on diamond exploration have shifted their attention to other minerals, including lithium. Phillips even pointed to former diamond infrastructure that could potentially be repurposed for lithium processing. “Kind of sad, but I would rather have the facilities used rather than just mothballed or plowed under.”
Then came perhaps his starkest assessment of Canada’s immediate future.
“This time next year, we might have no commercial diamonds being mined in Canada.”
Again, he stressed that this does not mean Canada has no diamonds. “We’ll always have diamonds. I mean, they’re in the ground, but we may not have any commercially available diamonds.”
That could eventually create an interesting reversal for Canadian diamonds already in the market. “You might be able to use that as a rarity factor when selling your diamonds.”
But it creates another problem for appraisers and insurers: replacement. If a documented Canadian diamond is lost, how easily will another comparable Canadian-origin diamond be sourced? What will customers accept as “like, kind and quality”?
Phillips estimated that only a small percentage of Canadian diamonds have actually been individually tracked or laser-inscribed as Canadian. “There’s millions of carats out there, but only two percent are actually tracked. I’d say less than two percent, based on my information from a few years ago.”
For Canadian gemologists, retailers and appraisers, the disappearance of active Canadian mining could therefore have consequences long after the last ore is processed.
Looking Ahead
For Phillips, the question is no longer whether synthetic diamonds will remain part of the diamond market. They will. The bigger question is how much further their prices will fall — and how far the natural and synthetic markets will continue to separate.
At the lower end, synthetic diamonds continue to put pressure on commercial-quality natural diamonds and the mines that produce them. At the upper end, Phillips expects better natural diamonds to continue moving in the opposite direction.
“I suspect we’ll see better natural diamonds increase in price.”
And synthetics?
“We’re seeing $50 a carat. We’re seeing $20 a carat for some of the smaller stones. So, pretty cheap.”
Phillips described what he expects next as “continued bifurcation.”
“Basically, the two markets are going to separate in price.”
For Canada, that separation carries particular significance. Its diamonds are still there — in the ground and already in the marketplace — but the future of commercial mining remains uncertain.
So perhaps the simplest way to describe the diamond market Phillips sees ahead is this: synthetics aren’t going away, natural diamonds aren’t going away — but increasingly, they aren’t traveling the same road.
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