Rough diamond production in 2021 grew 5% and reached 116 million carats, still 20% below pre-Covid levels in 2019, says the 11th Global Diamond Industry Report: 'A brilliant recovery shapes up', jointly prepared by AWDC and leading consultancy agency Bain & Company.
A 16-million-carat supply increase was offset by an 11-million-carat loss from the closure of the Argyle mine in November 2020. The majority of growth came from Botswana, Canada, Russia, and South Africa. In Botswana, a 5-million-carat improvement came from De Beers treating higher-grade ore at Jwaneng. In Canada, production renewal at Ekati and Renard contributed an additional 4 million carats.
ALROSA increased output by 2.5 million carats by treating higher-grade ore at Botuobinskaya, increasing ore processing volumes at Nyurbinskaya pipe and Udachny mine, and resuming production at Aikhal mine and Verkhne-Munskoe deposit.
De Beers’ South African production increased with the higher-grade ore from the final cut of the Venetia open pit.
Rough diamond sales increased 62% in 2021. Miners increased production volumes and pulled from inventories to satisfy strong demand from cutters and polishers. Rough prices increased as midstream companies rushed to restock to meet growing demand. At the end of 2021, upstream inventories hit historically low levels—about 29 million carats, which is close to average technical stock levels.
Production is expected to hit 120+ million carats in 2022 but is unlikely to reach pre-pandemic levels within the next five years. The largest short-term threat is new coronavirus strains (e.g., the omicron variant) that might disrupt production and logistics again. Major new projects have not been announced and investments in exploration are limited, so production growth will likely stay at 1% to 2% per year during the next half-decade. Promising demand growth and production scarcity support stability or further price growth for rough diamonds, the report says.
Alex Shishlo for Rough&Polished
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