Global diamond supply
- Global rough diamond supply decreased 22% in 2021. Material reductions in the volume of rough diamond supply came in Russia, Botswana, Australia, Canada, the Democratic Republic of Congo and Namibia, due to a combination of production being slowed or temporarily shut down due to COVID-19, pending exhaustion of resources, mine closures, operations transitioning from open pit to underground and falling alluvial output. Increased volume of output was recorded in South Africa and Zimbabwe.
- During November 2020, Rio Tinto ceased mining at Argyle in Australia after 37 years of operations, with closure and rehabilitation to take five years. Argyle produced 11 Mcts in 2020 against 13 Mcts in 2019.
- The world’s largest diamond mines are maturing and past their peak production levels
- Potentially the world has already seen peak diamond production of circa 177 Mcts in 2005
- The success rate in diamond exploration is estimated as less than 1% and there have been no major new finds for over 20 years
- A number of mines came on stream in late 2016 – namely Gahcho Kue and Renard in Canada and Liqhobong in Lesotho, however these are not ‘new’ projects (Gahcho Kue was first discovered in 1997, Renard in 2001 and Liqhobong in the 1950’s)
- For CY 2021, various sources project rough supply to increase as mines come back into production, though the increase will be ameliorated by the closure of Argyle which still accounted for 11 Mcts of global output in 2020. Bain & Co’s “Optimistic” scenario projects that mines which continue to operate will reach pre-pandemic production levels by 2021-2022 and that global inventories will gradually sell out in a year.
- Longer term, there are forecast to be few material additions to production over the next decade, with rough diamond supply forecast to remain “almost flat” at 2021-type levels over the next 10 years, according to Bain & Co, with few projects coming on line.
World Diamond Mines
A key characteristic of diamond deposits is their scarcity, in contrast to many other commodities, and there are just 30 significant diamond mines in production today. Only seven mines in the world are considered to be Tier 1 deposits (+US$20 million Reserves).
To date, the most important discoveries (other than Argyle in Australia) have clustered into three regions of the world: southern Africa, Siberia, and western Canada.