Diamonds Are Not Forever: Africa’s Production To Fall From 2020 – De Beers

Written by Kevin Mwanza

Sep 17, 2014

The De Beers diamond cartel warned Wednesday that global production will decline from 2020, a trend that could spell pricier bling for consumers.

A dearth of major new diamond finds means that production might not keep up with ever-increasing demand from the United States, China and India, the firm claimed.

“Unless major new discoveries are made in the coming years, supply can be expected to decline gradually from 2020,” De Beers said, forecasting rocky times ahead for the $85 billion a year industry.

Existing mines in Botswana, South Africa and Namibia are becoming depleted and the need to dig deeper has made operations less profitable.

De Beers said exploration has now turned to Angola, the Democratic Republic of Congo, Zimbabwe, Arctic Siberia and Canada.

But the last major mine discovery came a decade ago in India, at Rio Tinto’s yet to be completed Bunder project.

Still, a shortage of supply might not necessarily be bad news for the Luxembourg-based firm, which accounts for around 33 percent of overall rough diamond sales.

“China and India, the engine for growth, these two big markets clearly could be as big as the U …

Demand from the United States — the world’s largest market for diamonds — and growing appetite for the gems from China and India’s middle class, will likely create a seller’s market.

“Even under scenarios of volatile or weaker global economic growth, demand for diamonds is expected to show positive real growth in the next decade,” De Beers said.