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The shift of cutting and polishing operations towards
low-cost centres in India and the Far East is likely to
have reached its peak. Over recent years, producing
countries such as Botswana, South Africa and
Namibia have been striving for increased domestic
beneficiation. However, the development of a long-
term sustainable cutting and polishing industry will
require not only government intervention but also
internationally competitive productivity levels.
Rough diamond sales and distribution
channels are
continuing to evolve, as producers experiment with
sales methods to maximise the value of their rough
diamonds. Over the last five years, auctions have grown
in importance and it is possible that, as technology
continues to evolve, this trend will continue. However,
the major rough diamond producers are expected to
continue to rely predominantly on long-term contracts
to sell their production.
Producing countries have been playing a more
important role in the sale and distribution of rough
diamonds. This is driven by national governments’
desire to increase their share of value from the
primary resource. The continuing trend towards
in-country beneficiation of diamonds saw perhaps
its largest milestone yet in 2013, with the move of
De Beers’ Global Sightholder Sales to Botswana, and
the organisation of De Beers’ first ever international
‘Sight’ in Gaborone in November 2013.
Rough diamond production
was an estimated 146
million carats in 2013, well below the 2005 peak of
over 176 million carats mined
1
. Overall diamond
supply is expected to increase moderately in the next
few years, driven by new projects coming on-stream.
By 2020, when many existing mines will begin to
see declining outputs, overall supply will be likely
to plateau and, unless major new discoveries are
made in the coming years, supply can be expected
to decline gradually from 2020.
Diamond production is becoming increasingly
challenging as mining moves towards deeper, less
profitable and more remote sources of diamonds.
This trend is explored further in the ‘In Focus’
chapter, ‘The miracle of production’.
Exploration
spend is expected to remain high as
the chase to find the next major source of diamonds
intensifies. Today, most of the diamond exploration
spend takes place in historically underexplored
African countries such as Angola, the Democratic
Republic of Congo (DRC) and Zimbabwe, as well
as the vast swathes of Arctic Siberia and Canada.
Large-scale profitable discoveries will most likely
remain elusive, however. Viable diamond deposits
of any scale are rare and difficult to find, and no
amount of investment in exploration guarantees
the discovery of deposits on which sustainable
mining operations can be built.