After the Diamond Peak . . .
October 16, 24
It's been downhill since 2005. That was the year the diamond industry hit its all-time peak, in terms of carats recovered. And it's highly unlikely we'll ever reach that level again.
"We must recognise that we are already past the peak for diamond supply, Moses Madondo, CEO of De Beers Group managed operations, told delegates at a mining industry conference in Johannesburg a couple of weeks ago.
Demand for natural diamonds is declining and the global economy is in poor health. But all of that aside, the simple fact is that diamonds are in (relatively) short supply.
Old mines are closing and there aren't many new ones to take their place.
"Despite extensive exploration, only one commercial discovery - the Luele mine in Angola - has been made in the 21st century," said Madondo, during his address at the Joburg Indaba.
Let's dig a little deeper. Global diamond production reached its peak in 2005, at 176.7m carats, according to Kimberley Process data.
It's been in overall decline since then. The latest KP figure, for 2023, is 111.5m carats (a 37 per cent drop on the 2005 figure) and 2024 is forecast at around 107m carats.
Let's not forget that it wasn't until the 1980s that diamond production reached anything like the levels we've seen in recent decades.
The impact of discoveries in Russia, Botswana and Australia suddenly turned a +40m carat-a-year industry into a +100m carat-a-year industry.
After the 2005 peak, we've now settled back at mid-1990 levels of production, and many of the mines that fueled the surge are running dry.
Australia's Argyle mine was, at some points during its 37-year lifetime, the largest diamond producer in the world (14m carats in 2018). It closed in 2020.
Canada's Diavik mine, which has produced over 140m since it opened in 2003, is due to close in 2026.
The Renard mine, in Quebec province, has closed and will be repurposed as a lithium processing plant.
Ekati, the country's first diamond mine, could operate until 2040, according to Australia-based Burgundy, its new owner, but is currently appealing for government help to survive.
There is a flipside. Angola opened its Luele mine last year, which is expected to eclipse Catoca and produce 6m carats a year.
De Beers is investing $2.2bn in the underground transition of its Venetia mine, in South Africa, and Alrosa is spending $1.2bn on a replacement for Mir, which closed after the 2017 flooding disaster that claimed eight lives.
But there is nothing significant on the horizon in terms of new discoveries, either among the current elite (+1m carats a year) of diamond producers - Angola, Botswana, Canada, DRC, Namibia, Russia, South Africa, Zimbabwe - or among any surprise newcomer.
Production of natural diamonds is likely to continue along its downward trajectory for the foreseeable future (lab growns are a discussion for another time).
One final thought, from poring over diamond data. The total weight of diamonds ever recovered, from ancient times until today, is estimated at 6bn carats.
Or 1,200 tonnes. Which is a little more than a single fully-loaded Cat 797F, one of the world's biggest dumper trucks (truck 623 tonnes, load 363 tonnes).
Have a fabulous weekend.