The rapidly-spreading coronavirus pandemic has quashed diamond miners’ dawning hopes of a recovery in a sector severely hit by weak prices and demand since late 2018.
The market began suffering from the effects of the covid-19 spread in early March and measures to contain it has already pushed De Beers, the world’s largest producer by value, to cancel its April sales event.
Russia’s Alrosa, the world’s No.1 producer by carats, is studying options for online trade as global travel restrictions make traditional physical inspection of gemstones almost impossible.
Smaller producers, however, have been forced to make more extreme decisions, suspending guidance for the year and halting operations. Mines in South Africa, Canada and Lesotho have been put on care and maintenance for at least a few weeks to stop the spread of the virus.
According to VTB Capital’s estimates, increasing mining disruptions put at risk 2.5% of rough diamonds supply expected for the year. Canada’s Lucara Diamond (TSX:LUC) said on Wednesday it continued to operate, but noted the extent of how covid-19 might change the business landscape was impossible to judge.
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