It was a fantastic year for the diamond industry with record-level sales, and it did not skip the major diamond producers. De Beers and ALROSA’s 2021 market share benefited from the improved business environment, posting large market share gains.
Compared to 2019, the two posted a double-digit rise in market share. In fact, except for Rio Tinto, which closed its massive Argyle mine in December 2020, all leading diamond producers increased market share.
The following figures include a few assumptions: While Kimberley Process production figures are assumed to be an accurate reflection of global diamond production, they are not. They do not factor in the certain amount of smuggling that occurs, which is addressed later in this article.
In addition, value of market share is calculated against the Kimberley Process’ total production value, which is somewhat misleading. That said, the ratios are close enough to provide a solid comparison for us. Finally, since Catoca didn’t publish production volume figures for 2021, they are estimated here.
De Beers 2021 Market Share
According to the Kimberley Process, global diamond production was 120 million carats, worth $14 billion. With $4.83 billion in rough diamond sales, De Beers’ 2021 market share by value was 34.5%. By volume, the miner held a 27.8% global market share.
ALROSA’s 2021 market share was 28.4% of value ($3.98 billion) and 37.9% by volume (45.5 million carats).
The two leading diamond producers are number one by value (De Beers) and volume (ALROSA), and jointly were the source of about two-thirds of global diamond supply.
Compared to 2019, De Beers’ diamond market share rose sharply, up 17% by value and nearly 25% by volume. ALROSA’s 2021 market share rose 18% by value and made a tremendous leap in share by volume, up 36%.
The Rest of the Pact: Four Leading Producers
There are several other significant suppliers, certainly by value: Rio Tinto, Catoca, Petra, and Gem Diamonds.
Together with De Beers and ALROSA, the six represent more than 76% of global diamond production. Collectively, they supplied 94.1 million carats valued at $10.67 billion.
What is interesting is that while collectively these companies mined 20% less in 2021 compared to 2019, their collective market share rose 9.4%. The reason is simple. In 2019, the largest miners lost market share to a small group of junior miners and the multitude of alluvial miners.
In 2021, this trend was reversed. Countries like Canada, DRC, Brazil, and Angola – all countries with junior and artisanal miners – had a decline in production compared to 2019.
Smuggling and How It Impacts the Figures
The issue of diamond smuggling is a painful one for the diamond industry. It’s rarely discussed, although it is addressed in a variety of ways: through the Kimberley Process, the rising use of traceability technology, and internal procedures in the main diamond centers.
And yet, there is a fear of discussing this publicly, which is a shame. Collectively, the industry is attempting to stamp this out, and they have nothing to be ashamed of. On the contrary, it is in a considerably better state in this regard than many others.
In 2019, the estimated smuggling ratio was about 4% by value, mainly of lower-priced items. Since the COVID lockdowns, it is believed that smuggling operations have declined.
The immediate suspects are smuggling activities out of the DRC and Zimbabwe, as well as the CAR. Sometimes, this is an activity of convenience – hopping across the border to sell the goods makes sense to local diggers/traders and spares them the “need” to make a long and difficult trip in-country.
Is it illegal? Absolutely. Is it necessarily a malicious attempt to dodge tracking? Not always.
Whatever the driver to do so may be, a current estimate is that the value of smuggling is back to about 4% by value, and a little more by volume.
From the perspective of the major diamond companies, the damage is marginal to none. They don’t operate in the suspect countries, and the goods are not stolen from their mines.
The largest downside is that it robs countries of a source of taxes and royalty income. Also, illicit goods, by nature, tend to be sold for less, and that may drag down prices. That is something that hurts all legitimate operations – not to mention the reputational damage.
ALROSA 2022 Market Share
Placed under sanctions and currently (somewhat) on the bench, what ALROSA’s 2022 market share will look like is intriguing.
Looking at De Beers’ first half of the year results, the miner clearly raised diamond prices. The average per carat price in the first half of 2021 was $213, compared with $135 per carat in H1 2021. This is a massive 57.8% year-over-year increase.
De Beers clearly seized an opportunity. But was it really opportunity? In volume, De Beers’ diamond supply shrank 20%. Not only that, it didn’t offset a shortcoming created by ALROSA’s absence. In fact, it didn’t even meet its own sales from a year ago.
The opportunity was really far more traditional – high polished-diamond prices. Miners consistently increase rough diamond prices when polished prices rise.
As for ALROSA, it is not out of the game. It still makes sales, working around the US sanctions quietly and effectively.
The Bottom Line
The major diamond-mining companies increased their market share in 2021. The sole exception was Rio Tinto, which closed Argyle. This year, it is ALROSA that is expected to lose market share, but it won’t be wiped out. It is still doing business – just keeping a low profile about it.
Although rough diamond supply to the market decreased in volume compared to 2019, total value increased. This means that ALROSA will miss out on increasing their market share, while cautiously generating sales for its survival in the international diamond market.
If you are interested in diamond miners’ activities, including rough diamond prices, sales, and production data, then by all means, please get in touch.
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