Which country is richest in diamonds?

Diamond is beautiful, mysterious, individual – it is a stone with a world-wide, centuries-old history. No other stone in the world is associated with so many legends. The stone is millions of years old. Diamond is not only precious, but also the hardest stone on earth. Every year the demand for diamonds is growing more and more. Diamonds are used in various industries. Diamond mining can perfectly support the economy of any country. The mining of these precious stones tends to spread almost all over the world. How are diamonds formed? Deep in the earth, at a distance of about four hundred kilometers from the surface, under enormous temperature and pressure. Diamonds fall to the surface along with erupted magma. This is how primary deposits called kimberlite pipes are formed. This type of pipe has a cone-shaped shape. Placers were considered to be secondary deposits – they are formed as a result of soil erosion, in cases where stones are washed out of deposits and end up in river beds, on the bottom of the sea or ocean. The first diamonds were discovered in the 9th century in India. Wherever diamonds are mined: in two oceans, in deserts, tropics, savannahs. India and Brazil are the most common places for diamond mining. In India, for example, the largest diamonds to date have been found. These diamonds are famous all over the world. These are the famous “Hope”, “Sancy”, “Regent”, “Florentine” and, of course, “Shah”. And Brazil, by the way, is precisely the country in which the quality of precious stones has always been at its best. Diamond deposits can also be found in Venezuela. True, the volume of diamond mining in this particular area is not so significant, although South America is considered one of the brightest and most promising diamond mining areas in the whole world. For a long time, diamond mining was the task of silent slaves. Their destiny is backbreaking manual labor, which was used by their owners. Today, diamonds are found in more than 35 countries around the world. But the bulk of diamonds are found in Russia, South Africa, Namibia, and Angola. The main diamond-producing countries in Africa primarily include Botswana. It accounts for about 19% of world stone production. It is followed by the Democratic Republic of the Congo with 17%. South Africa has 8% of the deposits, Angola – 4%. In addition, diamonds are also mined in Guinea, Ghana, Namibia and Tanzania. Rich diamond deposits can be found in Australia, India and the countries of the Far East. In Australia, for example, the largest and richest deposits were found – lamproite pipes. These deposits significantly influenced the economy of this country. Previously, diamonds were found in river placers in India and Brazil. They were washed out of river sand. In Russia, the first diamond was found on July 5, 1829 in the Urals by Pavel Popov. In Siberia, a diamond was first found near Yeniseisk on the Melnichnaya River in November 1897. In Russia, the search for diamonds was carried out for about a century and a half, but only in the mid-50s were huge, incredible diamond deposits found in Yakutia. After the discovery of deposits in the Yakutia region, a diamond mining industry was created in Russia. In addition to these countries, diamond deposits can also be found in China and Indonesia. Over time, diamond mining in these countries is becoming more popular and widespread. China is especially different. Unbelievable but true. From two hundred tons of rock, only one carat of diamond can be extracted. About half of the diamonds mined are called technical, that is, acceptable only for industry. They are not used for cutting. Only 25% of the total diamonds are of excellent quality and are perfect for jewelry cutting. Jewelry diamonds have stunning, simply crystalline transparency. The beauty of a cut diamond cannot be compared with anything. The most famous among diamonds are colorless or brightly colored diamonds. Fortunately, today the process of diamond mining has changed from manual labor to a machine process. Diamonds are extracted by special electronically controlled machines. The rock is extracted from a quarry or from the ocean floor. Diamonds today are the most important raw material, perfectly used in industry and jewelry. Recently, the demand for diamonds has been increasing all over the world. Diamonds are often used in the mining industry. In the jewelry industry, due to its extraordinary properties, diamonds find wide application. Diamond is a fairly rare mineral, so it is distributed absolutely unevenly throughout the territory.

About diamonds

Diamond color
The most important characteristic that affects its appearance. Diamond clarity
Read about inclusions in diamonds and their purity, characteristics that affect their value. Diamond weight
Measured in carats, a small unit of measurement that corresponds to 0,2 grams. Cut quality
Cut quality is one of the most important characteristics of a diamond. Certificates
Our company can use diamonds with GIA, HRD and IGI certificates. Cut shape
The shape of a diamond determines its unique properties. Where is the paradise for diamond lovers? Of course, on the diamond exchanges! Today there are 29 of them in the world, but the current crisis is predicted to radically change the market landscape. What will happen to prices and whether there will be enough diamonds for everyone – read the article. September 22, 2020 256 0 –> Where are the world’s diamonds? Of course, on the diamond exchanges! The epicenter of the world’s largest transactions, where the best examples of precious stones are presented. Today there are 29 such exchanges in the world, each of which has its own unique history and geography. The diamond industry ended last year, 2019, with positive dynamics: global demand for stones and, accordingly, sales increased. However, the coronavirus pandemic has significantly impacted the diamond market and led to significant trade restrictions. Some producers have completely frozen sales, finding themselves on the brink of survival, while others have reduced prices and suspended the operation of their mines. Post-COVID, the diamond industry landscape is predicted to change dramatically. What will change soon, how will this affect prices and whether there will be enough diamonds for everyone – read below in our article. Half prices! 6 UAH 252 UAH 8 UAH 144 UAH
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The main tasks of the diamond exchange

Diamond exchanges (clubs) are the epicenter of the global trade in precious stones, the main participants of which are manufacturers, dealers and brokers. The largest diamond centers are located in Israel, Canada, USA, Belgium, South Africa, and India. For the convenience of conducting trading operations, the organizers have developed a separate infrastructure. There are entire diamond hubs – special territories where the entire production cycle is concentrated. The main tasks of the diamond exchange:

1. Improving sales efficiency for diamond miners and diamond manufacturing companies.
2. Creation of an optimal pricing tool and influence on price trends in the global market.
3. Transferring part of the world market of rough and polished diamonds to your country.
4. Providing our own jewelers with precious stones in the required volume.
5. Independent research and certification of diamonds.
6. Increasing the attractiveness of finished diamond products and individual stones for end consumers.

Industry structure

The structure of the diamond industry consists of three main processes:

1. Extraction
2. Processing and cutting
3. Trading

Five companies account for about 70% of global diamond production: ALROSA, De Beers, Rio Tinto, Dominion Diamond, Petra Diamonds. The rest of the segment is the “black market”. African countries remain the leaders in illegal trade.

Extraction (Upstream)

Recently, diamond production volumes have shown negative dynamics. This was largely influenced by the lack of new deposits, as well as the coronavirus epidemic, which led to transport restrictions.

According to the Kimberley Process, global diamond production in 2019 amounted to 141.3 million carats, down 4.8% in volume and 9.7% in price.

A decline in production volumes has been observed since 2017 (then these figures were 150.9 million carats).

Processing and cutting (Midstream)

The main diamond processing plants are located in low-wage countries (75% of exports go to India).

The key feature of Midstream is seasonality. At the beginning of the year, cutters are busy building up raw material reserves. The higher the New Year and Christmas sales, the stronger the further demand for diamonds.

Trade (Downstream)

The largest markets for the diamond industry are in the USA and China. They account for more than 60% of global consumption. Therefore, all demand forecasts for diamond products depend on the GDP growth rates of these two countries.

In 2020, analysts predict a decline in GDP for the United States and China from 1.7 to 1.5% and from 5.2 to 4.8%, respectively.

Largest exchanges in the world

Five exchanges rule the roost in the global diamond trade. They present the best examples of stones of any type, color, size, cut. People from all over the world come to do business, but getting to the world’s largest exchanges is not so easy.

Top 5 largest diamond exchanges in the world:

Ramat Gan

Here is the main diamond exchange of Israel, which is a huge complex of organizations operating in the diamond market. More than 6 people visit the exchange every day.

The active development of the exchange was facilitated by the friendly policy of the country’s leadership. Rough diamonds are imported and exported duty-free, preferential lending conditions are offered to manufacturers, and their interests are lobbied at the international level. At the same time, the activities of all enterprises, including jewelry stores and consulting agencies, are strictly controlled.

Having its own stone cutting factories also gives the country a competitive advantage in the market.

The Diamond Exchange in Ramat Gan reliably maintains its leadership position despite the emergence of other similar organizations. It’s all about maintaining access to consumer markets in the US, Hong Kong and other Far Eastern countries. In conditions of intensified competition, Israel will occupy a dominant position for a long time.

Antwerp

Belgium has been considered the world’s diamond trading center for over 500 years. In Antwerp, one and a half thousand wholesale and retail companies annually sell about 60% of all precious stones. The Antwerp Diamond Exchange (AWDC) employs more than two thousand participants, and the cutting of local cutting plants is recognized as one of the highest quality in the world.

Getting into the building of the Diamond Exchange itself is not so easy. The buyer will need an official invitation from a person who has the right to represent the interests of clients when concluding a transaction on its territory. Most of the crystals are sold wholesale to jewelry houses and businesses. However, a private person can also buy a diamond based on a recommendation.

London

The London Diamond Bourse (LDB) was founded after the end of World War II by refugees from Belgium. The first president of the exchange is Max Lack. Its services are available only to those who strictly adhere to the established code of conduct and hold a high position in the diamond industry. The total number of participants never exceeded more than 700 people.

In 2015, the London Exchange held its first open day.

Toronto

The Canadian exchange is one of the youngest. The first auction took place in January 2010. Since then, both bidders and experts have noted its great potential, which has allowed it to gain membership in the World Federation of Diamond Bourses.

The emergence of a new large platform for trading rough and polished diamonds is not accidental – Canada is the third largest producer of these precious stones, which were previously distributed through historically established sales channels. Having our own independent association is a chance for the Canadian diamond business to reach a new, more modern level.

Mumbai

It is impossible to imagine the jewelry world without Indian diamonds. Every year, India exports up to $20 billion worth of raw and cut precious stones (16% of all goods)! The organization of the Bharat Diamond Exchange was a natural continuation of the development of the Indian diamond business.

The country’s authorities spent almost two decades creating the exchange, and in October 2010 it opened its doors. Dealers, appraisers, traders, representatives of diamond companies, banking and customs offices were located on hundreds of thousands of square meters in eight buildings of nine floors each.

The Diamond Exchange fully met expectations for an increase in the volume of supplies of Indian stones to international markets – already in 2011 its turnover amounted to more than $22 billion.

Largest diamond producers

Three companies – ALROSA, De Beers and Rio Tinto account for almost 60% of global production. The first two are classified as mega-industry corporations. Mining company Rio Tinto stands apart. Along with diamonds, it also mines other minerals. Rio Tinto’s share in global diamond mining is almost 13%.

The three diamond giants are followed by rapidly developing regional companies. Their share in the global diamond industry ranges from 1 to 5%.

Top 5 largest diamond producers (at the end of 2019 – at the beginning of 2020):

• ALROSA
• De Beers
• Rio Tinto
• Petra Diamonds
• Dominion Diamond

ALROSA

The Russian ALROSA group is a leader in the extraction of natural diamonds. The main center of activity is the Arkhangelsk region and Yakutia. The company accounts for almost a third of global and about 90% of Russian production. Exploration work is also underway on the African continent.

In the spring of 2020, due to COVID-19, the company’s sales fell by 11%, and revenue decreased 10 times (compared to 2019)! As a result, the company lowered its production forecasts from 34.2 to 28-31 million carats (compared to 38 million in 2019).

De Beers

The largest diamond producer by revenue. De Beers was at the origins of the diamond industry. Until the beginning of the 80th century, the company was a monopolist and occupied about XNUMX% of the world market.

COVID has hit many companies, including De Beers. In the second quarter of 2020, diamond production volumes decreased by 54% to 3.5 million carats.

In March 2020, De Beers announced that it was abandoning its annual sales cycle.

Rio Tinto

Rio Tinto Group is an Australian-British mining concern that ranks third in the diamond market. The company is involved in the production of gold, copper, aluminum, as well as in the mining of ore, coal, diamonds and uranium.

The company’s assets are a 100% share of the Argyle field (property of Australia) and 60% of Diavik (Canada).

Did you know that.

The Argyll mine alone accounts for about 90% of the world’s pink diamond production!

Production at the Argyll mine began in 1983, and in its best years reached 40 million carats. Today, the mine’s reserves are depleted. In July 2019, after 40 years of operation, the company announced the imminent closure of its largest quarry.

Rio Tinto also warned that the closure of the field would likely lead to higher prices and a fall in production.

In 2020, Rio Tinto Group plans to produce 12 to 14 million carats of rough diamonds (up from 17 million carats in 2019).

Petra Diamonds

Petra Diamonds is a Jersey-based diamond mining group with 8 mines in South Africa and Tanzania, as well as an exploration program in Botswana.

Today the company is one of the largest independent manufacturers in Africa. Petra Diamonds’ activities are focused on the extraction of stones. The company owns the most productive mines in the world. These are the Finsch and Cullinan mines. The latter produces the world’s largest rough and polished diamonds.

Did you know that.

The Cullinan mine is famous for producing the world’s largest precious diamond, weighing 3106 carats (0.6212 kg).

The coronavirus pandemic has made negative adjustments to the company’s sales strategy. The self-isolation regime, as well as the cancellation of planned sales, intensified the trend towards a reduction in supplies.

In 2020, Petra Diamonds produced 3.59 million carats, which is 7% less than in 2019. The company’s revenue also declined. In March 2020, Petra was only able to meet its sales target by 50%.

Dominion Diamond

A Canadian company that owns 40% in the Diavik field (Canada) and 89% in Ekati (Canada).

Dominion Diamond supplies diamonds to major diamond centers in Antwerp (Belgium) and Mumbai (India). They are of high quality thanks to their own sorting system and evaluation point for each stone.

Each diamond is cleaned, sorted by weight and volume, and individually assessed by company employees.

Dominion Diamond sorts rough diamonds into 10000 different categories! Diamonds are grouped into lots based on the needs of each client.

In March 2020, due to COVID-19, work at the Ekati field was suspended.

Prices in the diamond industry

Diamond prices depend on the category of stone, which determines its quality:

1. Technical – low quality diamonds that are used in industry;
2. Jewelry – high quality, which is used in jewelry.

Diamond producers make the greatest profit from jewelry stones, since prices for industrial diamonds are an order of magnitude lower.

How is the price determined? The value of a stone depends on its “pedigree”, carat value, purity and color.

Diamond trends

The advent of synthetic stones marked the beginning of a new era in the history of diamonds. They are cheaper than natural ones (20-40%), while their characteristics are not inferior to their natural counterparts.

The profit from synthetic diamonds is almost 2 times higher than from natural diamonds. Therefore, according to forecasts, their production will increase in the near future.

Another important trend is the change of generations, which has influenced the nature of consumer preferences. Young people (19+) mainly pay attention to new technologies and brand positioning. They are critical by nature and less attached to things.

Forecasts and prospects

The year 2020 has been a difficult year for the diamond industry. By the end of May, disruptions caused by the coronavirus epidemic affected almost 40% of global production. Net imports of diamonds have virtually stopped, and exports of polished diamonds and gold accessories have halved.

As a result, the production reduction of the largest producers ALROSA and De Beers amounted to 17-20 million carats (13% of world production last year). As for small producers, there is a high risk that they will not open before the end of the year.

Analysts predict that only two giants, ALROSA and Rio Tinto, will be able to continue operating without severe damage; others risk remaining frozen indefinitely. Experts admit that all this will affect the balance of power in the global diamond market. It is possible that a new major player will appear who will take risks and combine the assets of crisis companies.

Rapaport estimates global production will fall to about 119 million carats and prices will fall by about 15%. In their opinion, a shortage of natural diamonds is unlikely, but may arise in the future if demand recovers and production continues to fall.

But synthetic diamonds, on the contrary, are strengthening their positions. A report by the Gem & Jewelery Export Promotion Council of India states that lab-grown diamond exports stood at $2020 million in January 44.10, up from $20.87 million in 2019. According to experts, this gives reason to believe that the production volumes of synthetic diamonds will in the future increase to 10% of global production.

The main drivers of demand for jewelry are the USA (50% of global consumption) and China (10%). However, a new round of trade wars between countries could worsen consumer sentiment in the coming years.

As economists note, further consumption of jewelry (including diamonds) depends on the rate of GDP growth in the USA and China, which is projected to fall (in the USA from 1.7 to 1.5%, in China – from 5.2 to 4.8%).