Given the slowdown in rough diamond production of mining companies across the world caused by the coronavirus pandemic, it seems interesting to see how diamond mining has developed over the past decade.
Diamond production in the Russian Federation by diamond-mining regions and enterprises in 2008-2018 is shown in Table. 1.
Table 1
Diamond production in the Russian Federation by diamond-mining regions and enterprises in 2008-2018, $ million
According to the above figures, the Russian Federation and the Republic of Sakha (Yakutia) produced rough diamonds to the amount of $ 3,842 million and $ 3,294 million respectively in 2018. Thus, the annual decline in diamond production reached 9.5% in Russia and 13.9% in Yakutia.
Decrease in diamond production in Russia in the first half of 2019
In 2019, the pressure from lab-grown diamonds increased and production of natural diamonds started to decline. According to the Kimberley Process data for the first half of 2019, the Russian Federation produced 19.46 million carats of diamonds worth $ 1 907.9 million. This is less than in the second half of 2018 by 18.1% in terms of carats and by 6.6% in terms of value.
Prospects for diamond mining in Russia in 2020
The lower prices of synthetic diamonds compared to natural diamonds, as well as the market advantages associated with ethics and sustainability, have significantly affected the minds of buyers. In addition, a less obvious factor also contributes to the promotion of artificial diamonds - the profit they provide to retailers. Analysis of wholesale and retail prices for unbranded synthetic and natural diamonds revealed that the gross retail profit from popular carat sizes of synthetic diamonds is 1.8 times higher versus natural diamonds.
Given the decline in production due to the coronavirus pandemic, it seems obvious that diamond production in the Russian Federation and the Republic of Sakha (Yakutia) in 2020 will be reduced even more.
Yury Danilov, Ph. D., independent expert and analyst
