India will lead demand for natural diamonds in 2024, says David Kellie, CEO of Natural Diamond Council (NDC), as US buyers increasingly switch to lab grown.
“The Indian market remains the strongest growth market in the world because of its strong financial position and changing demographics,” he told The Economic Times, in India.
“Indian women are now financially stronger, and they are driving the demand. The key economic indicators in the US are not yet favourable for a demand recovery in diamond purchase.”
Kellie (pictured) predicts a polarization between the natural and lab grown markets, with a price difference currently at 80 per cent to 90 per cent.
Natural diamonds will become increasingly rare, he said, with no new mines in prospect, and with miners digging deeper, and spending more, to reach remaining deposits.
De Beers reduced rough-diamond prices by an average of 10% to 15% at this week’s sight, aiming to stimulate sales and bring its rates more in line with the rest of the market, sources told Rapaport News.
The miner lowered prices by 5% to 10% for rough under 0.75 carats, with thinner or no reductions for the smallest items that produce melee, sightholders and other market insiders said Monday on condition of anonymity.
Rough weighing 0.75 to 2 carats saw reductions of approximately 10% to 15% on average, while prices of 2-carat and larger goods dropped about 15%, the sources added.
Select makeables — the 2- to 4-carat rough stones that produce SI2 to I2 diamonds — fell more sharply, with estimates ranging from 20% to 25%. This reflects the impact of lab-grown competition on mid-market US demand in the past year, sightholders explained. De Beers does not comment on pricing.
De Beers tends to sell less volume during a downturn and reduce prices only once the polished market has improved. The RapNet Diamond Index (RAPI™) for 1-carat diamonds slid 21% in 2023, the worst year on record for the category, but sightholders reported a moderate uptick in US demand since the holiday shopping season began, though Chinese orders remain weak.
The global market also stabilized as a result of India’s two-month voluntary freeze on rough imports, which ended December 15.
“[In the past, De Beers] didn’t want to change prices because they didn’t know [what the state of the] polished [market] was,” one of the sources commented. “They have an idea where polished is now, and have adjusted rough to polished.”
However, several sightholders said the drops did not go far enough, with De Beers’ prices still above those of outside tenders and auctions and also too high for many manufacturers to make a profit.
Even with the price reduction, the sources expected demand at the sight to be limited, with sales of around $300 million. The trading session, De Beers’ first of the year, began Monday and runs through Friday in Gaborone, Botswana.
Global diamond giant De Beers said it will go ahead with a planned $1 billion investment to extend the life of its flagship Jwaneng mine in Botswana, even as last year’s downturn in gem demand persists.
The Anglo American (AAL.L) unit and the Botswana government, which jointly own Debswana Diamond Company, have approved the spending that will convert the Jwaneng pit into an underground operation.
Debswana said in 2018 it planned an investment to extend the lifespan of the mine by 11 years from 2024. De Beers said the spending is necessary as long-term supply of rough gems is expected to tighten.
Angola last year started mining at its new Luele project, the biggest in the country and one of the world’s largest by estimated resources, despite depressed diamond demand.
“The global supply of natural diamonds is falling, so moving forward with the Jwaneng underground project creates new value for investors,” De Beers CEO Al Cook said.
Demand for rough diamonds has been weak in recent months with India – cutter and polisher of 90% of the world’s rough diamonds – asking global miners to stop selling it gemstones to manage accumulated stocks.
“This investment is aligned with our strategy to prioritise investments in the highest quality projects,” Cook said.
De Beers last year agreed a new diamond sales pact, which will see the government’s share of diamonds from the Debswana joint venture gradually increase to 50% over the next decade.
Africa-focused miners Gem Diamonds and Lucara Diamond have recovered big, high-quality Type IIa diamonds at their respective operations.
Gem Diamonds said on Thursday it had unearthed a 295-carat rough stone at its Letšeng mine in Lesotho, adding to a long list of diamonds over 100 carats found at the operation over the past two years.
The prolific mine is one of the world’s ten largest diamond operations by revenue. At 3,100 metres (10,000 feet) above sea level, Letšeng is also one of the world’s most elevated diamond mines.
Canada’s Lucara recovered a 166-carat rough in the Coarse X-Ray Transmission unit at its Karowe diamond mine in Botswana. The company said the precious stone was sourced from direct milling of ore from the South lobe of the mine.
The 166-carat rough diamond recovered at Karowe. (Image courtesy of Lucara Diamond.)
Lucara’s latest find is the 328th diamond over 100 carats found at Karowe since it began operations in 2012. Chief executive William Lamb said the recovery further supported the economic rationale for investing in the underground expansion project to extend the mine’s life to at least 2040.
The recoveries bring some positive news into a market affected by ongoing weak conditions, with prices for wholesale polished diamonds dropping 20% last year, which also dragged down rough diamond prices.
Bruce Cleaver will leave his role as cochair of De Beers’ board of directors and will also relinquish his position on the board of the miner’s lab-grown diamond-manufacturing company, Element Six.
The move follows Cleaver’s exit as CEO in early 2023 after six years in the position. Cleaver’s appointment to the boards was to enable a smooth transition of leadership to his replacement, Al Cook, a De Beers spokesperson told Rapaport News.
Additionally, while on the board, “Bruce also supported the finalization of the commercial negotiations with the government of the Republic of Botswana,” the spokesperson said. “With the leadership transition complete, and with De Beers and Botswana having signed heads of terms for the new agreements, Bruce has delivered on those objectives, and so has stepped down from the board of directors.”
Cleaver will remain with De Beers in an advisory capacity, the spokesperson added. Duncan Wanblad, CEO of De Beers parent company Anglo American, will now be sole chair of the miner’s board of directors.
The European Union on Wednesday imposed sanctions on Russia’s state-run diamond giant Alrosa and its CEO as part of a ban on imports of the precious stones over the Ukraine war.
The EU in December agreed to prohibit diamonds exported from Russia as it tightens sanctions to further sap the Kremlin’s coffers.
The 27-nation bloc added Alrosa, the world’s largest diamond mining company, and its chief executive Pavel Marinychev to a blacklist subject to a visa ban and asset freeze in the EU.
The EU said the company — which accounts for 90% of Russia’s diamond production — “constitutes an important part of an economic sector that is providing substantial revenue to the government.”
Russia’s diamond exports totaled around $4 billion in 2022.
The EU’s ban went into force on Jan. 1, targeting natural and synthetic diamonds exported from Russia.
A prohibition on Russian diamonds processed in third countries will be phased in by September.
The EU ban came after months of painstaking negotiations with G7 countries to set up a system to trace Russian diamonds.
Belgium, which is home to the world’s largest diamond trading hub, insisted the system needed to be put in place to make any embargo effective.
The EU has so far imposed 12 rounds of sanctions on Moscow since Russian President Vladimir Putin launched the full-scale invasion of Ukraine in February 2022.
India has urged the Group of Seven (G7) countries to delay an incoming ban on Russian diamonds because the rules to trace the origins of gems remain unclear, two sources aware of the matter said.
India, home to 90% of the world’s diamond cutting and polishing industry, is critical to the implementation of the ban.
New Delhi has also sought more clarity in its talks with G7 leaders, said the sources, who did not wish to be identified because they are not authorised to talk to the media.
Earlier this month, G7 nations announced a direct ban on Russian diamonds starting Jan. 1, followed by phased-in restrictions on indirect imports of Russian gems from around March 1. A new system to trace the origin of the gems will be introduced in September.
Russia is the world’s biggest producer of rough diamonds by volume. New restrictions on the trade of Russian gems are part of the bloc’s broader measures designed to limit Moscow’s revenues that aid and fund its invasion of Ukraine.
“The timeline to start restrictions on indirect imports from Russia in three-four months is impractical, as the rules on how the origin for a gem will be traced are not clear,” one of the sources said.
India has also expressed its reservations over G7’s new “traceability-based verification and certification” system, which may require sharing of data about Indian businesses, the first source said.
Some data might be sensitive and businesses might not be comfortable with sharing such information, he said.
The federal trade ministry, which is involved in talks with G7 on proposed restrictions, did not immediately respond to a request for comment.
India mostly processes smaller Russian diamonds, and that’s why the country expects minimal trade disruption, a government official said earlier this month.
Still, the proposed ban would impact the diamond supply chain, industry officials say.
India’s diamond sector already faces weaker demand. The country’s polished diamond exports fell 29% to $10 billion during the first seven months of the current fiscal year that began in April.
It exported polished diamonds worth more than $22 billion last fiscal year that ended on March 31. The industry, based mainly in the western state of Gujarat, employs millions of people across small and medium firms.
A Lepanto man just learned he found a 4.87-carat diamond this spring. Jerry Evans visited Crater of Diamonds State Park for the first time this year and within ten minutes of entering the park, he found what he thought was a piece of glass.
A release from the Arkansas Department of Parks, Heritage, and Tourism says he put the glass in his pocket with the rest of his finds from the day. Evans told the department he and his girlfriend “were picking up everything thinking it was a diamond.”
Eventually, though, Evans couldn’t contain his curiosity and sent the stone to the Gemological Institute of America for identification. A few weeks later, he learned his clear piece of glass was actually a diamond.
Evans told the department that “when they called and told me it was real, I was tickled to death!”
Assistant park superintendent Waymon Cox said it’s not uncommon for people to ask him to identify something they’ve found, but “this is the first time someone has contacted [him] after they’ve had a diamond identified by the GIA.”
Cox said Evans has since taken the diamond back to the park to have it officially registered.
This is the largest find registered at the park since 2020. Kevin Kinard of Maumelle discovered a 9.07-carat brown diamond on Labor Day that year.
The park says Evans has decided to name his diamond the “Evans Diamond”. Many diamond-finders choose to name the diamonds they find at the state park.
Dubai-based manufacturer Choron has signed an agreement with Storm Mountain Diamonds to cut and polish a 108.39-carat stone from the Kao mine in Lesotho.
Storm Mountain, a joint venture between Namakwa Diamonds and the Lesotho government, recovered the type IIa diamond in March. The stone is one of the largest pink diamonds ever discovered, Storm Mountain said last week.
“Storm Mountain continues to consistently deliver extraordinary diamonds, and this diamond further cements the Kao mine as the primary producer of pink diamonds globally,” said Storm Mountain board chairman Robert Cowley. “We are thrilled to enter into this agreement with Choron, and we look forward to the next chapter of this diamond’s story.”
Storm Diamonds will retain a minority share in the stone, while Choron will manufacture and market it, Choron CEO Anshul Gandhi told Rapaport News. The company has not disclosed the other terms of the partnership.
“It is a privilege for Choron to unlock the secrets within this remarkable pink diamond, and we look forward to revealing the story of this historic diamond,” said Ghandi. “Our artisans will meticulously transform this rough diamond into an array of polished diamonds that will be remembered for generations to come.”
