Global diamond supply expected to decrease this year – by Paul Zimnisky ( – March 6, 2018)

Expert estimates it will fall 3.4% to 147 million carats.

Coming off of 2017, a year in which global diamond supply by volume increased by 11.7% year-over-year, supply is forecast to contract by 3.4% to 147M carats in 2018 (see appendix at bottom for itemized analysis by mine).

Out of the world’s top three diamond miners by volume, only De Beers is expected to increase production this year, while diamond output at Russia’s ALROSA (MICEX: ALRS) and diversified-major Rio Tinto (LSE: RIO) is estimated to decline, more than offsetting De Beers’ increase. Combined, the three companies represent approximately 70% of global diamond supply by volume.

De Beers

Company-wide, De Beers is estimated to produce 34.6M carats worth $5.7B in 2018 which is enough to maintain its status as industry-leader in terms of value produced. The production volume figure represents a modest 1.2M carat increase year-over-year, with the boost expected to primarily come from the company’s Jwaneng mine in Botswana, the richest diamond mine in the world in terms of value produced.

In 2018 Jwaneng is estimated to produce 13.5M carats worth $2.7B, which compares to 11.9M carats worth $2.3B in 2017. The mine by itself represents 17% of global diamond supply by value on an annual basis and with an estimated resource of over 350M carats, it has a remaining mine-life of 25 years.

At current estimates, De Beers would be producing at approximately 95% of production capacity in 2018, which compares to 91% last year and only 80% in 2016. De Beers’ strategy of “producing to demand” over the past two years has reduced the company’s excess inventory to more normal levels.

For the rest of this article: