For the first time in 25 years, diamond production is declining, and that may make the world's most coveted stones a better investment than copper, nickel and zinc, this year's top-performing commodities.

Output from diamond mines worldwide is likely to fall 2 percent by 2015, says James Picton, a diamond analyst at W.H. Ireland who's been following the industry for 35 years. Production has increased about 9 percent in the past five years, according to the New York-based World Diamond Council, as mining companies hurried to find new deposits to meet soaring demand.

A rally in prices will fuel earnings for producers African Diamonds Plc and Petra Diamond Ltd., according to Merrill Lynch & Co. and JPMorgan Chase & Co. The drop in production comes as purchases of the stones rise, helped by the booming economies of China and India. China alone doubled jewelry purchases since 2001 and may buy 20 percent more this year, according to Diamond Forecast Ltd., a London-based research firm.

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