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Global rough diamond output declines 20% in ‘20, to remain stable in ‘21: Study. After a sharp 20 per cent decline in 2020, the global rough diamond output is likely to remain stable in the calendar year 2021 to keep demand and supply scenario in check, finds a Bain Capital study. The study estimates global rough diamond output at 111 million carats in 2020, a decline of 20 per cent from the previous year’s level of 139 million carats. The decline was attributed to mine closure across and supply restrictions the world following the coronavirus (Covid-19) pandemic which restricted its physical movement from mine sites to processing and consuming regions. The highest global production of rough diamond was achieved in 2017 at 152 million carats followed by 147 million carats in 2018. “Following peak levels in 2017 and 2018, rough diamond production declined by 5 per cent in 2019, hitting 139 million carats (10 per cent higher over 2016). Rough diamond sales decreased 18 per cent, reflecting both volume and price changes, and leading to a 10 per cent increase in mining company inventories. Towards the end of 2019, the market was improving significantly. Strong holiday demand positioned the industry for a better 2020,” said the study. Unfortunately, the Covid-9 pandemic severely disrupted mining operations and logistics, causing mine closures and restricting cross-border movements. As a consequence, major mining companies adopted a price-over-volume strategy and took actions to keep the value chain in balance. They cancelled major sales events between March and July, allowed customers to defer purchases, introduced a zero buyout obligation on goods allocation, and discounted rough diamond prices by 10 per cent in the third quarter, the study reveals further. Smaller players continued selling their diamonds from March through May to generate cash flow, even though prices were 25- 30 per cent lower than pre-pandemic levels. Several mining companies suspended operations for more than six months. Overall, rough diamond sales decreased by around 30 million carats (worth $4.1 billion) and rough inventory increased by 7 million carats. Meanwhile, the sharp decline in rough diamond output was largely reported from Russia, Canada, Botswana and Australia. In Russia, production levels were lowered at Botuobinskaya, Almazy Anabara, Jubilee and other smaller mines. Production in Canada declined due to suspended mining operations at Ekati and Renard in March. In Botswana, Jwaneng and Orapa decreased production by 26%. As planned, Rio Tinto shut the Argyle mine in Australia in November 2020. The only mines to increase production were Venetia in South Africa and the Udachny underground mine and Nyurba Alluvial deposits in Russia. The distribution of diamond assortment by size remained relatively constant, with medium and large diamonds accounting for 70-80 per cent or more of production values.

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