Today, the total reserves of rough diamonds in foreign countries are estimated at 2 billion carats. Diamonds are mined in more than 26 countries of the world; new deposits are constantly being searched for on all continents. The level of annual diamond production in the world is currently 131 million carats.
Demand for Diamonds
Based on the Dominion Diamond Corporation's estimates, global demand for rough diamonds will soon outstrip supply, leading to higher prices. Till 2024, diamond production is projected to decline due to the lack of new deposits. Demand is projected to continue to grow thanks to fundamental processes such as the rise in the wealth of the middle class in developed and developing countries. Currently, the largest global diamond consumer markets are the United States, China, and India.
Diamond is a rare but at the same time quite widespread mineral. Commercial diamond deposits are known on all continents except Antarctica. Several types of diamond deposits are known. Already several thousand years ago, diamonds were mined on an industrial scale from placer deposits. Only towards the end of the 19th century, when diamondiferous kimberlite pipes were first discovered, did it become clear that diamonds did not form in river sediments.
Kimberlite pipes are vertical or close to the vertical geological body formed when magma breaks through the earth's crust. The kimberlite pipe is filled with kimberlite. The geological structure and accompanying rocks are named for the city of Kimberley in South Africa.
There is still no exact scientific data on the origin and age of diamonds. Scientists adhere to different hypotheses - magmatic, mantle, meteorite. Most are inclined to the magmatic and mantle theories, to the fact that carbon atoms under high pressure (usually 50,000 atmospheres) and at a great depth (about 200 km) form a cubic crystal lattice - the diamond itself. Stones are carried to the surface by volcanic magma during the formation of the so-called "explosion tubes".
The age of diamonds, according to some studies, can be about from 100 million to 2.5 billion years.
The three leaders in diamond mining for 2019 are Russia (33%), Botswana (17%), Canada (14%). In total, the three countries mine 63% of all diamonds in the world. In addition to these countries, development is being carried out in the Democratic Republic of the Congo, Australia, Angola, South Africa, and some other countries. The total share of these countries in diamond mining is 95%.
Gemstone world market
In the past decade, the market for natural stones has grown largely due to an increase in consumer demand. One of the important consumers on the market for gemstones is North America.
Diamond is the most popular of all gemstones, with roughly 80% of the market in terms of sales. However, in 2019 the diamond market experienced some downturn associated with a decline in demand and some problems within the production chain.
The market for colored gemstones (ruby, sapphire, emerald) is small relative to the diamond market and is rather fragmented: there are many individual small players on the market, the products are not homogeneous, and therefore a full market analysis is difficult.
A significant part of precious stones (about 85%) on the market today is synthetic and further growth of this segment is expected due to lower prices for such stones.
Consequences of the COVID-19 pandemic
Many second diamond miners were unable to maintain an operating model during the pandemic and were in serious financial distress. Large players do not have such financial problems, in particular, due to the size of the company.
The pandemic and the ensuing restrictions on economic activity severely damaged India, the world's largest diamond cutter. In the Indian diamond market, there are thousands of small companies and hundreds of thousands of diamond cutters who were unable to pay their salaries due to restrictions on economic activity. But, by September 2020, diamond imports to India had already recovered.
Apparently, the pandemic did not harm the demand for large and expensive stones too much, but from medium stones, demand shifted towards cheaper counterparts.
The companies also report significant growth in online sales. In 2019, online sales in the US accounted for about 13% of all sales, in China - about 11%, however, restrictions associated with the COVID-19 pandemic had a serious positive impact on this sales channel.
The capacities of the existing deposits of diamonds, the degree of their production, and the expected commissioning of new mines suggest that in the medium and long term, there will be an excess of demand oversupply in the global market. The capacities of existing deposits, the degree of their production, and the expected commissioning of new mines suggest that in the medium and long term there will be an excess of demand for precious stones in the world market.