They say that diamonds are forever. But recently, the diamond industry has been in a downward spiral, with trade plagued by high production costs and falling prices.

It’s been so bad that some of the world’s biggest mining companies, including Rio Tinto PLC (RIO) and Anglo American PLC(AAUKY), considered selling their diamond businesses.

Heck, BHP Billiton (BHP) did sell its diamond mines.

Even the major diamond cartels – including DeBeers (which is majority owned by Anglo American) and Russia’s Alrosa(ALRS.ME) – have suffered.

But thanks to rising demand from emerging economies, diamond prices are back on the rise.

A Cut Above

Demand from consumers in emerging economies continues to grow. Take China, for example, where demand grew 18% last year.

Meanwhile, in Latin America, a new diamond exchange – the $200-million Panama Gem and Jewelry Center – is scheduled to open later this year.

Latin America’s luxury consumption growth rate of 14% is barely behind Asia’s rate of 16.5%, and the exchange is expected to boost Latin America’s $8-billion fine jewelry retail business to $10 billion in just three years.

Yet demand isn’t the only force driving prices higher. In addition to rising demand, the absence of any new diamond lodes is helping lift prices.

The last major lode was found in 1997, when Rio Tinto made a discovery in southern Zimbabwe. And unless another lode is found soon, many industry observers believe that diamond supplies will hit a peak in 2018.

An Investor’s Best Friend

With diamond prices once again on the rise, now is a good time to invest in the industry.

Here’s a look at the three major players:

• Alrosa – The world’s largest diamond producer, Alrosa accounts for 27% of global output and roughly one third of the world’s diamond reserves. The company is set to begin underground operations at its Udachny project in northeast Russia, which is expected to be the country’s biggest diamond mine.

• Anglo American (DeBeers) – Founded in 1888, DeBeers has been renowned as the world’s leading diamond company (controlling over 80% of the market) for more than a century. Now the No. 2 producer, its 51%-owned Gahcho Kué mine in Canada is expected to be the seventh-biggest diamond mine in terms of value produced.

• Rio Tinto – The third-largest diamond producer in the world, Rio Tinto has taken its diamond mines in Australia and Canada off the market and will keep the profitable division.

Though these are impressive firms, they’re not where we want to invest, as none of them offer a solid pure-play on the industry.

Diamonds are too small a part of Rio Tinto and Anglo American (DeBeers) to move the needle, and Alrosa trades only in Moscow, making it difficult for American investors to get involved.

Luckily, there is one sizeable diamond miner that offers a pure-play on diamond mining: Dominion Diamond (DDC), formerly known as Harry Winston Diamond. (The company sold its retail diamond business to Swatch last year.)

Dominion Diamond is the company that bought BHP Billiton’s diamond business, which held an 80% interest in Canada’s Ekati diamond mine. The company also owns a 40% interest in the adjacent Diavik diamond mine, owned by Rio Tinto.

Both are top 20 mines in the world in terms of annual carat production.

And in addition to owning two of the world’s top mines, DDC has a very cheap valuation. Its price-to-earnings ratio is a mere 2.5! In today’s roaring stock market, that’s a true gem.