Diamond Mining Research and Analysis - Page 3 of 3

The economics of diamond mining, how it works, the leading players involved in the industry, the issues they face, and the diamond value chain.

What Are the Forces Impacting Diamond Mining?

Above all, diamond mining is mostly impacted by consumer demand. Long-term shifts in interest as measured by how much consumers are willing to buy, the amount they are willing to spend, and the type of diamonds they are interested in all have an effect on diamond mining.

The impact of consumer demand may seem direct, however, the midstream – the manufacturing section of the diamond industry – often serves as a buffer between miners and consumers.

The following posts provide insights into exactly how this works, the ways miners sell rough diamonds, and the role mining plays in the economies of producing countries.

Who are the Largest Diamond Miners?

The leading miners by value are:

  1. De Beers

  2. ALROSA

  3. Rio Tinto

  4. Petra

  5. Dominion

Where are Diamond Mined?

Based on the Kimberley Process reported data, the leading diamond-producing countries are:

  • The Russian Federation

  • Botswana

  • Canada

  • Australia

  • The Democratic Republic of Congo

  • Angola

The order may change over time, yet these countries are almost always the largest source of diamonds.

How Are Diamonds Mined?

There are four main mining methods. In some cases, the choice of method is easy. In others, the decision is usually based on the economics of the mine. The four methods are:

  • Open pit

  • Alluvial

  • Underground

  • Marine

For a deeper look into this topic, please see below:

1

Sight Okay, Retail Not at All

Sight Okay, Retail Not at All - Gem Diamonds

If you are trying to see the half-full part of the glass, you’ll hear the voices that say that “De Beers finally got the message and lowered prices.” From a Sightholder perspective, the conclusion is that the Sight was okay. While that may be true and important, the issue is not only about price, but also about quantity. As the …

3

Sightholders Begin New Contract Period Cautiously

Smallish Sight Expected as Sightholders Begin New Contract Period Cautiously

On Monday, 84 Sightholders and two  will begin attending the first Sight of the new contract period – but quite cautiously. The Sight is not expected to be very large, around $400 million, because Sightholders opted to start the contract by scheduling fewer goods for the upcoming Sight. The first Sight of the 2015-2018 Global Sightholder Sales (GSS) contracts will …

4

Rethinking the Diamond Model

Rough diamond sorting - De Beers

Sometimes, connecting figures in ways in which they are not usually put together can highlight a great truth – a truth hiding in plain sight. Most people who follow the diamond industry already are familiar with the following figures. Yet what they disclose in this context is perhaps new and may require rethinking the diamond model.

Refusals, Strops, Contracts and Conspiracies – A Rough Market Review

Refusals, Strops, Prices, New Contracts and Conspiracies – A Rough Market Review

In a way, there were no surprises this past week, and that in itself should be a surprise. De Beers offered a large rough diamond supply to its clients – at slightly higher prices – and the market just could not digest it, leading to many refusals. Why did the miner offer so many goods in an overloaded market? Why …

The US State of the Jewelry Market Report

US Market report jewelry diamonds consumer expenditure

Millennials spend more on jewelry than any other age group Age group between 25-34 spent 28% more than average household Consumers are buying more jewelry but at a lower price-per-piece Fine jewelry sales in the US reach $68.8 billion Watch sales reach $9.13 billion, increasing 7.7% Buying season spans throughout the year, with sales during traditional holiday season dropping 1.2% …

Interview with Rubel & Menasche

Interview with Rubel & Menasche

In an interview for Rubel & Menasche, The Old Days Are Gone, A New Way Of Doing Business Is Here, Edahn discusses how lab-grown, transparency, Amazon’s low price-point jewelry, Anglo American’s takeover of De Beers, and high retailer fragmentation are influencing the diamond industry today. A few excepts: Lab Grown Lab-grown diamonds are an interesting concept, among other things because …

De Beers Sales +11% in 2014

Rough diamond sorting - De Beers

Anglo American announced its results this morning and with it De Beers‘ results: Sales: $7.114 billion (+11%) Carats sold: 32.73 million carats (+5%) Underlying EBITDA: $1.818 bln CAPAX: $689 million Return on CAPEX: 15%   Highlights from the 2014 financial report: De Beers’ underlying EBIT increased by 36% to $1.4 billion (2013: $1.0 billion). The increase was due primarily to solid demand …

Rio Tinto’s Diamond Sales +5.8% in 2014

Rio Tinto’s Diamond Sales +5.8% in 2014 The Argyle Pink Jubilee Diamond

A strong rise in rough diamond prices have led to an increase in Rio Tinto’s gross revenue from diamonds in 2014 despite a sharp drop in diamond production. Gross revenue increased to $901 million, up 5.8% from $852 million in 2013. In 2014, the company mined 13.87 million carats, a 13% year-over-year decrease. The decrease coincides with the move from …

Large December Sight

Sorted rough in bags. Photo: De Beers

As expected, De Beers has an uncharacteristically large December Sight. According to early estimates, the Sight this week offered ~$650 million worth of rough diamonds. There was very little ex-plan reported and box assortments are leaning towards smaller size goods, which possibly explains the somewhat lower prices.

Rough Diamond Market Report: Subdued Market Ahead of Diwali

Even with a very small supply of rough diamonds from the major diamond suppliers De Beers and Alrosa during this diamond cycle, premiums in the secondary market were so low that in some categories it meant selling at a loss for the first hand buyers – the Sightholders and Alrosa clients. There are several reasons for this, the upcoming Diwali holiday …