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De Beers’ Market Share Falls in 2019, Hides a Surprise

De Beers’ Market Share Falls in 2019 - rough sorting - Edahn Golan diamond Research and Data.jpg

After a year of pains, and ahead of one of the most complicated years since World War II, De Beers’ market share sank in 2019. Not only De Beers, but ALROSA, Rio Tinto, and Petra all lost market share.

De Beers’ Market Share

In 2019, De Beers’ rough diamond sales totaled $4.04 billion. Based on the latest Kimberley Process (KP) figures, global diamond production totaled $13.57 billion in 2019. This brought De Beers’ market share to 29.5% in 2019. A deep 21.3% year-over-year plunge from 37.4% in 2018.

By volume, De Beers’ market share stood at 22.3% of global production.

Despite its lost market share, De Beers is still the world’s largest diamond mining company. Its interests span from mining to retail, including activities in diamond science research, lab-grown, toolmaking, grading, and more.

Sliced Market Share at the Top

De Beers is not the only company that lost market share. All leading miners shared in this loss. ALROSA, the largest diamond miner by volume, saw its market share drop 20.9% to 24.1% as its sales hit $3.27 billion in 2019. Rio Tinto, the third largest diamond miner, saw its market share shrink by 5.1%.

Mid-size miners suffered from shrinking market share too. Dominion, Gem Diamonds, and Petra also lost sizable chunks of market share.

Top diamond miners ALROSA De Beers market share 2018-2019 - Edahn Golan Diamond research & Data

The Anonymous Market Share Winners

De Beers and ALROSA are the power houses of the diamond industry. Together with the mid-size players, the top six companies sold $9.1 billion worth of rough diamonds in 2019. Based on the KP figures, the top six diamond miners accounted for two-thirds (66.7%) of global diamond production in 2019.

In 2018, the top six companies produced 82.8% of the goods in the market. Together they lost a massive 19.4% market share. This begs the question – to whom?

The big market share winners are a small group of junior miners and the multitude of alluvial miners around the world. With few exceptions, they are completely anonymous.

Most of the market share gainers are an endless array of diggers in Congo, Sierra Leone, Angola, the Central African Republic, Brazil, and elsewhere. They are responsible for an increase in production, while the market was actually shrinking.

How Did This Happen?

Developing a good understanding of the market is why the larger firms reduced production. They saw that demand and prices are softening, and adjusted production accordingly.

There were some exceptions on the volume side. ALROSA, as a policy, keeps production levels fairly steady even when demand declines. Petra had a better than expected output in the second half of 2019.

Other than that, it was all based on analyzing the market, seizing inventory levels, consumer demand, and financing. They all pointed to a decrease in real demand.

Independent diggers don’t size up the market or analyze it. They dig, produce, and sell. In 2019, they produced more and suffered from the decline in prices. Ideally, we would want all parts of the diamond industry to be able to adjust their activity according to consumer demand.

Regrettably, it is those smaller operators that prove less nimble. We see this throughout the diamond value chain.

Another conclusion from a market with a growing sector of smaller players and a shrinking market share of the larger firms: The diamond industry is not a monopoly.

* A full account of real diamond production by value, volume, and size of unaccounted for production is available upon request.

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Edahn Golan
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Edahn Golan has 20 years of experience as a diamond industry analyst. He has a unique ability to provide a global view with context to the exclusive granular data he shares. The New York Times, Wall Street Journal, Business Insider, and other leading publications quote him regularly.

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Comments 3
  1. What are the details with ALROSA keeping production levels even? Is production cost so low it’s more expensive to cut production than not, a strong case position or is government buying or supporting production? With stock piling up they must be hoping demand comes back with a strong future? Anyway you look at it it’s a tough proposition. Please give us your opinion. Thank you.

    1. Avatar for Edahn Golan Post
      Author

      In a way, the company thinks like an engineer, looking for efficiency. They have serious government backing, including a finance ministry agency serving as a diamond and precious metals reserve.

      I hope this answers your question.

      Edahn

  2. To elaborate on what Edahn write, the Russian agency buys excess Alrosa production then, when demand improves, resells it through Alrosa. This allows Alrosa to keep mining at peak efficiency while keeping excess goods off the market

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