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De Beers warns of rise in diamond price as stones become even rarer De Beers warns of rise in diamond price as stones become even rarer
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De Beers has warned that global diamond production will decline from 2020, in a forecast that could spell pricier jewellery for consumers.De Beers has warned that global diamond production will decline from 2020, in a forecast that could spell pricier jewellery for consumers.
A dearth of major new diamond finds means that production might not keep up with ever-increasing demand from the US, China and India, the firm claimed.A dearth of major new diamond finds means that production might not keep up with ever-increasing demand from the US, China and India, the firm claimed.
"Unless major new discoveries are made in the coming years, supply can be expected to decline gradually from 2020," De Beers said, forecasting a difficult future for the £52bn a year industry. Existing mines in Botswana, South Africa and Namibia are becoming depleted and the need to dig deeper has made operations less profitable."Unless major new discoveries are made in the coming years, supply can be expected to decline gradually from 2020," De Beers said, forecasting a difficult future for the £52bn a year industry. Existing mines in Botswana, South Africa and Namibia are becoming depleted and the need to dig deeper has made operations less profitable.
De Beers, owned by FTSE mining group Anglo American, said exploration has now turned to Angola, the Democratic Republic of Congo, Zimbabwe, the Siberian Arctic and Canada.De Beers, owned by FTSE mining group Anglo American, said exploration has now turned to Angola, the Democratic Republic of Congo, Zimbabwe, the Siberian Arctic and Canada.
The last major mine discovery came a decade ago in India, at Rio Tinto's yet to be completed Bunder project.The last major mine discovery came a decade ago in India, at Rio Tinto's yet to be completed Bunder project.
A supply shortage might not necessarily be bad news for the Luxembourg-based firm, which accounts for around 33% of global rough diamond sales. Demand from the US – the world's largest market for diamonds – and a growing appetite for the gems from China and India's middle class, will likely create a seller's market. A supply shortage might not necessarily be bad news for the Luxembourg-based firm, which accounts for around 33% of global rough diamond sales.
Demand from the US – the world's largest market for diamonds – and a growing appetite for the gems from China and India's middle class, will likely create a seller's market.
"Even under scenarios of volatile or weaker global economic growth, demand for diamonds is expected to show positive real growth in the next decade," De Beers said."Even under scenarios of volatile or weaker global economic growth, demand for diamonds is expected to show positive real growth in the next decade," De Beers said.
China has the fastest growing demand, jumping to a share of about 15% of the world's diamond market from less than 3% in 2003. But it is not expected to overtake the US market's 40% share for more than a decade, De Beers CEO Philippe Mellier said. China has the fastest growing demand, jumping to a share of about 15% of the world's diamond market from less than 3% in 2003. But it is not expected to overtake the US market's 40% share for more than a decade, De Beers's CEO, Philippe Mellier, said.
"China and India, the engine for growth, these two big markets clearly could be as big as the US in the next maybe 15 years," said Mellier, adding that he expects the Chinese market to grow at more than 10% per year for "many more years"."China and India, the engine for growth, these two big markets clearly could be as big as the US in the next maybe 15 years," said Mellier, adding that he expects the Chinese market to grow at more than 10% per year for "many more years".
De Beers said China's anti-corruption drive, which has hurt demand for luxury goods, would not affect the diamond industry.De Beers said China's anti-corruption drive, which has hurt demand for luxury goods, would not affect the diamond industry.
The company had said earlier than it expects "good to very good" second quarter results in India, which has seen increasing demand for the gems. The company had said earlier than it expects "good to very good" second quarter results in India, which has seen increasing demand for the gems. De Beers last year reported £600m in operating profit, more than double that of 2012.
De Beers last year reported £600m in operating profit, more than double that of 2012.