As the coronavirus pandemic upended the global diamond industry, shuttering mines from Lesotho to Canada and disrupting supply chains, Rajen Patel swapped diamond polishing for peanut farming.

Mr. Patel, who worked for a decade in Surat where about 80% of the world’s diamonds are polished, joined the exodus of gem workers leaving the city as cases of the virus shot up. After taking up farming in his home village, he has no plans to return in the coming months. “I won’t earn as much I was earning in Surat, but I won’t starve and there is no fear of getting infected with coronavirus,” he said.

Demand for diamonds has plummeted during the pandemic, freezing sales and squeezing prices. With temporary mine closures at risk of becoming permanent, diamond miners are seeking ways to extract more value from their stones.

The lone bright spot has been steady demand for large, high-quality diamonds from affluent investors, according to financiers and sales data. “There are a lot more enquiries from people seeking to buy these luxury stones as a hedge,” said Chris Del Gatto, CEO of the DelGatto Diamond Finance Fund, the largest non-bank lender to the diamond, jewellery and watch industries.

Prices for high quality one-carat diamonds are rising steadily and are currently around 12% higher than at the start of the year, in contrast to still-depressed prices for lower-quality stones of the same size, data from trading platform RapNet shows.

But only a few miners are lucky enough to have deposits of large, high-quality diamonds, leaving some producers at risk.

COVID-19 has forced miners to cancel or delay sales, with major diamond shows scrapped due to health and travel restrictions. The few sales that have taken place showed rough diamond prices down between 15% and 27%. “What has happened in the second quarter, I have never seen in my life,” De Beers Chief Executive Bruce Cleaver told Reuters.

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