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Gem diamond demand to grow faster than rough supply

7 December 2016 – London. Global rough diamond production is set to rise from 127 million carats (Mct) in 2015 to 134.5 Mct by 2020, representing a compound annual growth rate of 2.1%, according to research and consulting firm GlobalData.

The company’s latest report states that this growth will be supported by the expansions at operating mines including Lukoil Oil Company’s Vladimir Grib project in Russia, the Diavik and Ekati Diamond mines in Canada, and Rio Tinto’s Argyle mine in Australia. However, the global output is expected to decline after 2019 as a result of reserve depletions in the Argyle, Diavik and Ekati mines, which account for 18% of global production as of 2016.

Cliff Smee, GlobalData’s Head of Research and Analysis for Mining, explains: “Global demand for diamond jewellery is expected to record a Compound Annual Growth Rate of 6.4%, with China and India together expected to consume around 50% of the global production, while global supply of polished diamond is expected to grow at an average of 4% per year over the next four years to 163 Mct in 2019, resulting in a demand-supply gap of around 5% to 6% after 2019.

However, this supply deficit could be worsened by the fact that 47% of global diamond production comes from countries of high political risk such as the Democratic Republic of Congo and Russia. Supply could fall below projected levels if political disruption affects these projects.

Information based on GlobalData’s report: Global Diamond Mining to 2020.

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The newspaper started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at https://economist.com.na. His editorial focus is on economic analysis based on budget analysis, dissecting strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored scores of journalism students as interns and as young professional journalists. He often assists economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to [email protected]