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Background Diamond Exploration Canadian Diamond History Canadian Diamond Market World Diamond Market Mining Terms Recommended Reading Red Lake Gold History
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Global Diamond Supply
The production of diamonds globally in 2005 was estimated to be a total of 160 million carats, with an estimated value (rough diamonds) of US $13.4 Billion. De Beers remains the largest producer of diamonds, by value and by caratage, but has seen its stranglehold on the industry significantly decrease in recent years. In 2005 its mines in Botswana, South Africa, Tanzania and Namibia produced an estimated US $6.54 billion, or 48 % of the world production by value and 49 million carats, or 30 % by volume.
The discovery of mines in regions not controlled by De Beers has allowed companies to establish themselves and successfully compete against De Beers. Rio Tinto and BHP Billiton are two of the largest examples of companies successfully competing with De Beers. The Lev Leviev Group and the Steinmetz Group have also established mining operations, which has increased global competition.
Diamond Producing Countries
Diamond producing countries are listed in Table 1. Botswana continues to be the largest diamond producing country in terms of value and number two in terms of carats. Australia ranks number four in the number of carats mined, but ranks ninth in terms of value mined.
Estimated World Diamond Production 2005
Producer Country | Carats (000) | US$M Value | | Angola | 7,000 | 1,210 | | Australia | 30,500 | 536 | | Botswana | 31,900 | 3,080 | | Brazil | 700 | 35 | | Central African Rep. | 400 | 95 | | Canada | 12,001 | 1,470 | | Congo | 30,400 | 1,070 | | Ghana | 900 | 26 | | Guinea | 350 | 88 | | Namibia | 1,800 | 1,070 | | Russia | 23,000 | 2,540 | | Sierra Leone | 600 | 200 | | South Africa | 15,200 | 1,610 | | Tanzania | 286 | 37 | | Other | 631 | 132 | | Total | 160,000 | 13,400 |
Sources: WWW International Diamond Consultants, De Beers, Rio Tinto, BHP Billiton
South Africa remains one of De Beer's dominant areas. Mines owned by De Beers produce 97 % of the 15.2 million carats. However, DeBeers recently announced they will be closing three of their mines in South Africa, including the world-famous Kimberley mine. These three mines were responsible for 2.33 million carats in 2004. Although Botswana produces more than South Africa, the four operating mines are owned by Debswana, a 50/50 joint venture between De Beers and the Botswana government. A fifth mine has opened in the area with 2003 as the first full year of operation. Botswana recently estimated that 2006 production would decrease by as much as 10 %. De Beers holdings in Namibia produced 1.8 million carats in 2005, a decrease of 5 %.
The Russian State company Alrosa produced US $3.4 Billion worth of diamonds in 2005 and owns all of Russia's mines. This places Russia second in terms of value. However, many of the open pits in the diamond-producing region of Yakutia are almost mined out. Alrosa reported 2005 production at 23 million carats, significantly lower than the estimated 35 million carats in 2004. Alrosa is investing heavily to mine these deposits underground and actively prospecting new diamond deposits but it can be expected that Russia's production will decrease in the near future unless diamond-producing veins can be identified.
Canada is a recent entrant into the club of diamond producing nations and has redefined the organization, stepping almost immediately into the number 3 spot in terms of value. With the mines in Russia and the Argyle mine in Australia reaching their productive limits, many in the international diamond community are looking to Canada to keep the global supply steady. Canada latest diamond mind in Jericho just came online in the spring of 2006 and two new mines will start production by 2009. Canada also has many exploration projects underway, which means Canada can be relied upon to be the Country to fill part of the estimated production gap.
Global Diamond Demand
In 1983, worldwide diamond Jewelry sales were $20 billion, today that figure is over $70 billion. Demand for diamonds globally continues to outpace the available supply. In the US, retail sales of diamond jewelry grew by 7 % in 2004 to $33.7 billion. That is an increase of $2.2 billion over 2004 sales, a sum equal to roughly 50 % of the countries annual engagement ring sales. This is the tenth consecutive year of growth in retail diamond sales. Fueled by strong sales in China, India and the Middle East, global diamond sales grew almost 10 % to $70 billion in 2005. In fact, Dubai's rough diamond trade increased 46 % in 2005 to $3.7 billion, according to the Dubai Diamodn Exchange.
In China, where rough diamond sales were $1.32 billion in 2005, experts predict the market will grow by at least 15-20 % per year. Jewelry sales are expected to rise by over 40 % in the next five years, with the most significant sales for diamond jewelry. China's gold, platinum and diamond jewelry sales reached $17.5 billion in 2005, a 15 % increase. Shanghai is expected to become a sizable trading center in the world's diamond processing and trading field in the next decade. By then, in Shanghai alone sales revenue of diamonds and jewelry will come to US $3 billion- $5 billion, and the number of people engaged in the industry will rise to 100,000.
Because of the growing demand for diamonds and the limited supply, experts and retailers claim that wholesale prices are already up by a third since 2003 and De Beers raised twice at their diamond tenders in 2005 for a total increase of 9.5 %.
According to James Picton, an analyst with WH Ireland, rough diamond demand is expected to grow 6 % a year to $23 billion by the year 2015 from $13.4 billion in 2005. Prices will rise by one-third and he estimated by 2015 there will be a shortfall of $10 billion of unfulfilled demand. Several fund managers agree. Trevor Steel of Baker Street Capital Managers in London believes diamond investments will experience above average returns in the next several years and Andrew Ferguson of New city Investments Managers Ltd. in London believes diamonds will outperform base metals.
Retail diamond demand is expected to grow by at least 5 % a year over the next decade as new buyers from Asia purchase diamonds and US buyers increase their jewelry holdings. That means that a mine equivalent to $500 million of diamond production must open every year for the next ten years to meet the increasing demand from consumers. Because it takes eight to ten years to get a mine into full production, a significant increase in exploration must occur to meet the increasing demand for diamonds.
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Press Releases
2010-8-10 DiaMine Explorations Inc. Completes Byshe Gold Prospecting In The Red Lake District Property more |
2010-7-23 DiaMine Explorations Inc. Is Pleased To Announce The Results Of The Autumn 2009 Drill Program more |
2010-6-30 DiaMine Explorations Inc. Completes Line Cutting & Induced Polarization on Belanger Property more |
2010-4-9 DiaMine Explorations Inc. Acquires Gold Property In the Pickle Lake region Of Northwestern Ontario more |
2010-3-5 DiaMine Explorations Inc. Acquires Gold Property In the Belanger region of the Red Lake District Of Northwestern Ontario more |
2010-2-10 DiaMine Explorations Inc. Is Pleased To Announce The Results Of The Autumn 2009 Drill Program more |
2009-11-15 DiaMine Explorations Inc. Announces Completion of Autumn Drill Program more |
2009-10-5 DiaMine Explorations Inc. Announces Plan For Autumn Drill Program more |
2009-9-25 DiaMine Explorations Inc. Acquires Gold Property In Red Lake District more |
2009-7-25 DiaMine Explorations Inc. Submits Application For Listing On A European Stock Exchange more |
2009-6-15 DiaMine Explorations Inc. Has Completed Summer Drill Program In Northern Ontario more |
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