FINANCE FORUM •
Photo by Edgar Soto on Unsplash
DEMAND FOR DIAMONDS REMAINS ROBUST
By Oliver Scott for Finbold
Although the unprecedented health crisis of 2020 affected diamond mining operations , three countries waged the challenges to account for at least threequarters of the precious stone ’ s global production .
Data analysed by Finbold indicates that only three countries produced 79.62 % of all the estimated 54 million carats of natural diamond produced in 2020 globally .
Russia tops with a share of 35.18 % or 19 million carats , followed by Australia with 22.22 % or 12 million carats . Therefore , the two countries cumulatively accounted for more than half ( 57 %) of the mined diamonds in 2020 . The Democratic Republic of Congo ( DRC ) also produced 12 million carats of diamonds .
Russia ’ s position as the leading industrial diamond producer in 2020 reflects the country ’ s status with the highest reserves globally , Botswana comes a distant second while the DRC ranks third . The diamond production data is provided by the Mineral Commodity Summaries 2021 report published by the US Geological Survey ( USGS ).
Why Russia produced more diamonds in 2020 Russia arguably holds the pole position in diamond production by having the most reserves globally . However , several policies aided the country in maintaining high production levels globally . Before the pandemic , the government had announced plans to increase domestic diamond production within the next several years .
When the pandemic hit , the country stuck to its policy , although most mining operations were initially shut . Furthermore , in 2020 , the government embarked on a more active role in developing and scaling existing diamond fields in existing extraction sites to maximise production .
Elsewhere , last year , perennial challenges also impacted diamond production to an extent . For instance , in a country like the DRC , constant political turmoil has affected general production despite holding the third spot . In the absence of clear leadership and
www . africanmining . co . za
African Mining Publication governance , production has resulted in blood diamonds that have led to global debates .
However , the emergence of technologies like blockchain is touted to help end the scourge . The country is known to have great potential in diamond production , but the exercise has been restricted mostly to small-scale operations .
In general , global industrial diamond production faced various challenges as a result of the coronavirus pandemic . Leading mining companies were forced to suspend operations as governments imposed lockdowns aiming to contain the spread of the virus . Similarly , with mining being a non-essential operation , workers were sent home as a safety measure .
The easing of restrictions later in the year inspired miners to resume operations despite reduced demand for the precious stone . However , the pandemic also offered miners the perfect opportunity to service and maintain machines and equipment . Overall , most miners began the year on a bright note , backed with improving customer sentiments across critical markets with soaring demand . However , the pandemic halted demand after miners cancelled and delayed sales . Furthermore , major diamond shows were scrapped due to health and travel restrictions as prices dropped .
How long will diamond reserves last ? Although estimates indicate that Russia ’ s diamond reserves are significant compared to other countries , the figures might change considerably . As more extraction continues , the reserves are bound to reduce drastically in the future . However , most mining companies are still carrying out explorations , and the reserves might increase .
Like other minerals , there are questions around the next step when all-natural diamonds have been mined . Notably , the possibility of current reserves being exhausted in the near future is rare . Still , the stone ’ s production will keep decreasing in the future . •
African Mining African Mining • June 2021 • 33