Print this page

ROUGH DIAMOND PIPELINE
SALES, DISTRIBUTION AND PRODUCTION

2014 global rough diamond sales increased approximately 12 per cent over 2013 levels to a total of just over US$20 billion.

De Beers remained the largest seller of rough diamonds worldwide by value with a share of 34 per cent (2013: 33 percent). This includes the approximately three per cent of global rough diamond sales made by DTCB (Diamond Trading Company Botswana, a joint venture between De Beers Group and the Government of Botswana) to ODC (Okavango Diamond Company, the Government of Botswana’s diamond trading company).

ALROSA was the second largest supplier, accounting for 24 per cent of global rough diamond sales value (2013: 25 per cent). Other major suppliers included SODIAM, which organises the trade of Angolan diamonds, with a seven per cent market share (2013: six percent); Dominion Diamond Corporation,with a five per cent share (2013: four per cent); Rio Tinto, with a share of four per cent (2013: five per cent); and Petra Diamonds, with a three per cent share (2013: two per cent) (see Fig. 8).

ROUGH DIAMOND PRODUCTION

In value terms, rough diamond production in 2014 was more than US$19 billion, representing an increase of almost six per cent over 2013.

However, in carat terms, global production declined in 2014 by approximately three per cent.

The largest producing countries by volume were Russia with 27 per cent (2013: 25 per cent); the Democratic Republic of Congo with 19 per cent (2013: 19 per cent); Botswana with 17 per cent (2013: 16 per cent); Canada with nine per cent (2013: seven percent); and Australia with seven percent (2013: eight per cent).

Russia was also the largest producing country by value with 26 per cent of the total value produced in 2014, the same share as in 2013. Botswana was the second-largest producer in value terms with a 23 per cent share (2013: 22 percent), followed by Canada with 12 percent (2013: 11 per cent), Angola with nine per cent (2013: nine per cent) and South Africa with seven per cent (2013: seven per cent) (see Fig. 9). Because of the type of diamonds mined in the Democratic Republic of Congo, its share of value of world production is estimated at approximately six per cent (2013: six per cent). 

De Beers and ALROSA were the two largest producing groups in 2014 by both volume and value. De Beers’ share of production was 23 per cent in volume terms (2013: 21 per cent), second only to ALROSA with 26 per cent (2013: 25 per cent). Rio Tinto was the third-largest producer with a 10 per cent share (2013: 11 per cent). Dominion Diamond Corporation was the next largest producer with a four per cent volume share (2013: three per cent).

De Beers remained the largest producer of diamonds by value with an estimated 34 per cent share (2013: 34 per cent). ALROSA was the second-largest with a 25 per cent share (2013: 25 percent), followed by Dominion Diamond Corporation with five per cent (2013: four per cent), Catoca with five per cent (2013: five per cent), and Rio Tinto with four per cent (2013: five per cent) (see Fig. 10).

A notable trend in global rough diamond production in 2014 was the decline in carats recovered from the Marange operations in Zimbabwe. It is estimated that approximately five million carats were recovered from these operations in 2014, representing a drop of more than 50 per cent compared with 2013 production volumes6.

LOOKING AHEAD

In 2014, three new greenfield mines began production. Two of these mines (Grib, operated by Lukoil, and Karpinskogo-1, operated by ALROSA) are located in Western Russia. 7

The third new project is the Ghaghoo mine in Botswana, the country’s first underground mine, operated by Gem Diamonds8. ALROSA also commissioned a further new mine, Botuobinsky, in early 20159.

The greenfield diamond project pipeline remains sparse, however, with just two scale projects currently in development: De Beers and Mountain Province Diamonds' Gahcho Kué project and Stornoway Diamond’s Renard project are both expected to begin production in 201610. ALROSA has also announced its intention to begin mining the Verkhne Munskoe pipe in 2018 (see Fig. 11).

While the development of new greenfield mines has been limited, several brownfield expansions are currently producing or are planned to start production over the next five years. Rio Tinto is transitioning its operations underground at its Argyle mine in Western Australia11, while similarly ALROSA is moving the Udachny mine from an open pit operation to an underground mine12. De Beers, via Debswana, is currently stripping waste for the Jwaneng mine Cut-8 project in Botswana, which is scheduled to start producing in 2017 and extends the life of mine to beyond 2030. De Beers is also constructing an underground mine at Venetia in South Africa, which will ensure diamonds are recovered at the mine until at least 2043.

Further brownfield expansions are expected to take place in Canada’s Northwest Territories where Rio Tinto and Dominion Diamond Corporation have announced plans to extend production at both the Diavik and Ekati mines. Rio Tinto and Dominion Diamond Corporation will produce from a fourth pipe at Diavik (called A-21) starting in 201813. Dominion Diamond Corporation is also proceeding with plans to mine the Jay pipe at the Ekati mine. This project would produce first ore in 2020 and extend the life of Ekati to 203014. In Lesotho, Firestone Diamonds is building the Main Treatment Plan at the Liqhobong mine. This will increase diamond production to approximately one million carats by 2019. The plant is expected to be commissioned in 2016.

The total impact of the rough diamond production expected from both greenfield mines and brownfield expansion is expected to lift total carat production to levels similar to the mid-2000s but, owing to the mix of new diamonds mined, value growth is expected to be less pronounced.

6 Ministry of Mines, Chamber of Mines Zimbabwe www.mineweb.com/news/diamonds-and-gems/zimbabwe-2014-diamond-exports-down-34/; De Beers analysis

7 Mining.com http://www.mining.com/web/commissioning-of-grib-complex-marks-successful-implementation-of-modular-plant-design/ and ALROSA http://eng.alrosa.ru/alrosa-launches-mining-onkarpinskogo-1-pipe

8 Gem Diamonds www.gemdiamonds.com/gem/en/operations/botswana

9 ALROSA http://eng.alrosa.ru/alrosa-launches-mining-onbotuobinskaya-pipe

10 Stornoway Diamonds www.stornowaydiamonds.com/English/our-business/renard-project/default.aspx

11 Rapaport www.diamonds.net/News/NewsItem.aspx?ArticleID=50149

12 ALROSA http://eng.alrosa.ru/alrosa-commissions-udachnyunderground-mine

13 Dominion Diamond Corporation www.ddcorp.ca/investors/news-single?id=1993309

14 Dominion Diamond Corporation www.ddcorp.ca/investors/news-single?id=2025431