Wednesday, May 2, 2012
Low production of rough diamonds alarms Surat
Industry sources said India is the biggest consumer of rough diamonds in the world. In 2010-11, India imported about $11 billion worth of rough diamonds while about polished diamonds worth $28 billion were exported.
Varda Shine, managing director of Diamond Trading Company (DTC), who recently visited Gaborone in Botswana where De Beers is shifting its sales and aggregation activities from its London office, said, "We do not anticipate the production to go back to 150 million carats a year for another two to three years."
Diamond producers have struggled to find new large mines to replace aging assets. Production at many of the world's biggest mines is falling as supplies of more accessible diamonds near the surface are depleted. De Beers' Orapa mine in Botswana began output in 1971, while its Jwaneng project - world's largest diamond mine by production value - and Rio's Argyle started in 1982. The last major mine to enter production was Rio's Diavik in 2003.
Rough diamond prices rose 24% last year after two consecutive annual gains of 32% as producers struggled to keep pace with consumption. That advance could be prolonged as stagnant production fails to satisfy surging demand from China and India. However, the recent research by US-based consultancy firm Bain & Co. stated that the use of diamonds may grow at double the pace of supply through 2020 because of an expanding middle class in India and China.
Sanjay Kothari, vice-chairman, Gems and Jewellery Export Promotion Council (GJEPC), told TOI, "Depleting diamond production the world over is a cause for concern. But, we have Zimbabwe and other African countries where the rough diamonds reserve is quite high and largely remain unexplored. We have to tap these countries in order to satisfy the needs of the diamond industry."
A DTC sightholder said, "Some diamond categories like the large and natural coloured stones are going to be a rarity because diamond production is depleting due to old mines. There are no new discoveries in the sector in the recent years and thus the supplies are likely to remain very low."