With temporary mine closures at risk of becoming permanent, diamond miners are seeking ways to extract more value from their stones.
Prices for high-quality one-carat diamonds are rising steadily and are currently around 12% higher than at the start of the year, in contrast to still-depressed prices for lower-quality stones of the same size, data from trading platform RapNet shows. “What has happened in the second quarter, I have never seen in my life,” De Beers Chief Executive Bruce Cleaver told Reuters. “There was no really properly functioning rough market.”Indian imports of rough diamonds plunged from US$1.5 billion in February to just US$1 million in April, data from the Gem & Jewellery Export Promotion Council shows.
Lucara Diamond Corp, which mines in Botswana, struck a deal in July with Antwerp manufacturer HB Group under which the miner’s diamonds larger than 10.8 carats are sold for a portion of the estimated polished price. With Rio Tinto’s massive Argyle diamond mine in Australia among those coming offstream soon, global diamond production will likely be reined in until 2025, independent analyst Paul Zimnisky forecasts.
Even De Beers is feeling the pain, saying job cuts are likely, as it remains unclear whether supply will shrink enough to meet plunging demand in the global diamond jewellery market, which Bain estimated was worth US$80 billion in 2019.