“Between now and 2020 there is very little supply even if all the new projects come online.”

“We reduced our production around the world to match demand. At the end of last year we also increased our advertising spend,” Cleaver said.

“We are comfortable with the level of production we have for now.”

Cleaver noted most of De Beers’ new diamond production coming on stream is not going to be from exploration of new mines but from expansion or prolonging of life of existing mines.

De Beers curbed its rough diamond production for the first half of the year by 15 per cent to 13.3 million carats from a year earlier, and maintained its annual mining guidance between 26 million and 28 million, down from 28.7 million last year.

While acknowledging an overhang of global political economic uncertainties, Cleaver said he had seen signs of improvement in the industry’s midstream business, essentially dealers and polishers who had held back purchases last year under persistently tight lending terms.

“We find the actions we took last year – producing a bit less and spending more on marketing – have returned the midstream to more normal conditions. They are in a better shape compared with six to 12 months ago,” he said.

Still, Cleaver is “cautiously optimistic” of long-term demand, as a generation of millennials – those born during the 1980s, reaching adulthood during the 2000s – from China and India are likely to become the main customers as they are financially able to afford diamonds.

“Millennials are an important cohort in the diamond market, and that trend is absolutely in China,” he said. “For very aspirational purchases in China, brand is very important.”

Self purchases, but not only “a man buying it for a woman”, are also poised to be more prevalent, according to a recent De Beers poll of 75,000 millennials on diamond consumption.

“Millennials like things that are easier to be identified, more individualised and there are going to be the challenges for the retailers about how they are changing their designs,” Cleaver said.

He stressed that the Chinese desire for luxury gemstones will continue to grow in spite of a lacklustre economy and relatively subdued income growth.

China is already De Beers’ second biggest market after the US, with demand from the mainland doubling its share to 14 per cent in 2015 within eight years.

Chinese consumers’ recent shift to more affordable alternatives, as well as more exclusive and niche labels following their earlier sophistication in tastes, has meant continued gloom for some prominent luxury retailers such as Prada, which reported a steep 24 per cent plunge in its first half net profits this year.

However, De Beers has said it will ramp up its sales efforts in China’s second and third-tier cities, where the huge population and swelling middle classes still bring growth opportunities.

“I would be surprised if you see continuous double-digit growth in diamond demand in China, but the size of the single-digit growth is still quite positive,” said Cleaver, adding that there was also “a slight shift towards [diamonds] slightly lower in quality” among Chinese buyers.

“There are a lot of volatilities, but a lot of demand,” added Cleaver.

The world’s No 1 diamond producer is also urging miners to invest more in technology, as a higher share of diamond production is poised to come from mines which are costlier and more complex to operate.

“You can’t just sit on the increasing costs and do nothing,” he said.