Chapter 3: What will diamond supply look like ten years from now?

There are many questions to answer about future supply of diamonds. But here you will find answers to the most important ones.

Here is a summary:

Global Diamond Production

Mother Earth decides what types of diamonds are going to be available for consumption. Thus, supply of diamonds generally precedes demand.

Ellendale Yellow Diamonds

For instance, Ellendale Mine was the world's leading producer of fancy yellow diamonds - accounting for 50 per cent of global supply. In 2010, Tiffany & Co negotiated exclusive rights to these fancy yellow diamonds for the full economic life of the mine. Sadly, Ellendale Mine was shut down in 2015, putting a massive dent on fresh global supply of yellow diamonds.

Diamond miners produced more diamonds in the last twenty years than in all of history.

Ekati Diamond Mine

The Ekati Diamond Mine is Canada's first diamond mine. The mine officially began operations in 1998 and instantly introduced Canada as a major diamond producer. The Ekati Mine has produced over 60 million carats of rough diamonds since 1998, helping to greatly increase global diamond supply.

At current mining rates, it is possible that we will run out of accessible diamonds within fifty years.

Jwaneng Mine Cut 8

Debswana has to go deeper into the earth's surface at huge cost to recover more diamonds from the world's richest diamond deposit - Jwaneng

There is large surplus supply of diamonds because of many years of excessive production of polished diamonds. Thus, future supply shortfalls will be specific to a particular type, size and quality of diamond.

India diamond polishing.jpg

Insatiable demand for diamonds by diamond traders in India has distorted actual world diamond consumption


New projects in Canada and Russia are positive for the world's supply of gem quality diamonds over the next five to twenty years.

Gahcho Kue Diamond Mine

New projects like the Gahcho Kue mine in Canada are positive for future supply of gem diamonds. Gahcho Kué is estimated to produce approximately 5 million carats annually which would make it the 7th largest diamond mine in the world in terms of value produced, and 11th in the world in terms of carats produced, using 2014 estimates. De Beers owns 51 percent of Gahcho Kué, and Canadian-based Mountain Province Diamonds (TSX: MPV) holds the other 49 percent.

 

Forecast Diamond Production in 2025

We first divide all diamond producing countries into three groups. These groups are based on the average market value of each country's production footprint.

Production footprint refers to a profile of types of diamonds present in a diamond deposit. In this case, in a country's diamond deposits.

Diamond producer countries grouped by average quality of diamonds produced

Classification of Diamond Producer Countries.png


Market share of producer groups

Market Share of Diamond Producer Group 2013 versus 2025.png


Group 1 countries produce the fewest pure gem quality diamonds. They mainly produce industrial diamonds and near-gem quality diamonds destined for fashion jewelry markets.

Group 2 countries produce the largest number of commercial grade diamonds mainly destined for wedding markets all over the world but mostly to USA, Japan, India and Greater China.

Group 3 countries produce a relatively high number of premium quality diamonds - top quality white diamonds and rare large size diamonds - mainly destined for luxury consumer markets.

Diamond production by producer classification

 Diamond Production by Producer Group.png

We then add pipeline and expansion projects to the total diamond production for 2013

High-end estimate of global diamond production in 2025

Estimate of Diamond Production in 2025.png


We then subtract production from mines that are scheduled to close before 2025


Probable estimate of global diamond production in 2025

Probable Estimate of Diamond Production in 2025.png

Market share of producer groups 2013 versus 2025

Market Share of Producer Group 2013 versus 2025.png

Diamond Supply Landscape in 2025

 

It is not possible for diamond producers to selectively mine just the type of diamonds in current demand. Thus, diamonds not yet required in consumer markets are stored in the diamond pipeline.

Moreover, sometimes producers oversupply diamonds, even for those diamonds in current demand. Such excess supply is also stored in the pipeline.

There is large surplus supply of diamonds because of many years of excessive production of polished diamonds. Thus, future supply shortfalls will be specific to a particular type, size and quality of diamond.

For example, the closure of the Argyle mine in a few years is going to affect availability of fashion diamonds. Certain hues of colored diamonds such as fancy pinks will also be affected.

Diamonds in short supply could rise in value in the coming years. Nonetheless, consumer purchases of diamonds are price sensitive. It is customary for consumers to find an alternative diamond if their first choice is not available for whatever reason.

What Type Of Diamonds Are Going To Be Available Ten Years From Now?

 

2025 diamond production will carry a higher proportion of gem quality diamonds

Canada Diamonds Mines

There is not going to be a blanket shortfall of diamonds to meet consumer demand. Supply shortfalls will be specific to a particular type, size and quality of diamond.

The last five years did not produce any new major discoveries of diamond deposits.

Even so, there are significant new diamonds mining projects now at the advanced stage. Together they are equal to at least one Jwaneng Mine (world's richest diamond deposit).

Generally, diamond value and grade are the dominant factors that influence the decision to proceed with mine development.

In recent years, diamond exploration has focused on the development of deposits with a higher footprint of gem quality diamonds.

Diamond production footprint set to improve towards 2025

Production Footprint Gem and Near-gem Diamonds.png

Nowadays, gem quality and near-gem diamonds refers to any diamonds suitable for use in jewelry.

Polished diamond production to increase more than rough diamond supply

Forecast Polished Diamond Production.png

The current cycle of production increases and new projects will carry a higher proportion of gem quality diamonds.

In particular, new projects in Canada and Russia are positive for the world's supply of gem quality diamonds over the next five to twenty years.

Diamond Supply and Production: The Definitive Guide

Diamond, composed of carbon, is the hardest natural substance in the world. It is mined for use in precious jewelry and industrial applications.

You will find all the important things to know about diamonds and their production here. As well as information on the major source countries like Canada and the major diamond mining companies like De Beers. 

Diamond Design.pngChapter 1: Basics of Diamond Supply and Production

Chapter 2: Statistics on Diamond Supply and Production

Chapter 3: Future of Diamond Supply and Production

Chapter 4: Diamond Facts and Trivia