Many of the world’s major diamond mines are in decline and cannot maintain previous high levels of output. Whilst some new mines are planned to come on stream in the coming years, there is nothing of significant size to make up for this shortfall and there have been no important new discoveries since the early 1990’s.
Meanwhile, demand for diamonds continues to rise, in both established markets, such as the US and Japan, and new markets, most notably China and India. Demand growth for diamonds in emerging markets is expected to continue as global wealth and consumer spending increase.
Whilst the rough diamond market is dominated by the four major producers – De Beers, Alrosa, Rio Tinto and BHP Billiton – which account for approximately 70% of the global diamond market by value – none of these companies can be invested in directly in order to gain direct exposure to diamonds.
A key characteristic of diamond deposits is their scarcity, in contrast to many other commodities, and there are currently only 30 significant diamond mines operating in the world today. To date, the most important discoveries (other than Argyle in Australia) have clustered into three regions of the world: southern Africa, Siberia, and western Canada.
Source: Petra Diamonds