Diamond Production Dropped, Now It Is Nosediving

(edahngolan.com) - Global diamond production sank 6.9% in 2019, the deepest plunge in a decade. By value, production dropped 6.2%. There were good reasons for this, and our updated production forecast calls for an even more significant slide in 2020. More than halfway through 2020, a devastating year for global economies with extensive lockdowns and hardly any rough diamond sales, it is clear that diamond production in 2020 will be considerably lower than it was in 2019. Based on production reports published so far and miners’ updated guidance for the year, diamond production is estimated to decline 22% in 2020. Using the KP figures, this translates to 108 mcts in 2020, or 108.5 mcts based on the full global production including smuggling. A 22% decline in the volume of diamond production is a very conservative figure. It does not take into account the realistic possibility that several mines that closed or were put on care and maintenance in recent months may not open until the diamond market recovers. A more aggressive estimate, which takes into account the issues that mining companies in Canada have, the high inventories held by the leading producers with the impact lower prices will have on less profitable smaller mines, and the decline could sink a further several million carats to 103 mcts, a 25% drop in production.