1 company does not a cartel make. That's a nitpicking definition issue. More important point: arguably, even if they went way down in market share, the cartel (and hence high diamond prices) would survive. There is no incentive for the other cartel members (e.g., Russians) to cheat. Cartel theory teaches us that cartel members will eventually cheat in order to maximize profits (sell at a lower price to sell more) but, so far as I can tell (and I don't really understand how diamonds are mined, etc.), there may be no real way for Russia or whoever to ramp up production more than it has already. It's not like taking common raw materials and turning them into something else -- i.e., there's not a way to easily make more just because the price goes up. So Russia's best option is, probably, to not disrupt the cartel. Let deBeers set the prices and offer its diamonds at an equal price.
Something could change that, but that's the way I see it.
Golfer
(antitrust lawyer and pseudo-economist)