Modern Mining January 2024

India is a major diamond processing country.

Day sales preparations. However, the global dia mond industry finds itself in a precarious state, following the weak 2023 Hong Kong Jewellery and Gem Show, albeit the activity was in line with par ticipants’ low expectations, the reality is that there is weak mainland demand amid an economic slump. According to Rapaport, (a provider of indepen dent diamond and jewellery industry news and analysis) suppliers reported minimal sales of pol ished under 5 carats. Larger, high-value stones saw some movement, as high-end brands and wealthier consumers continued to buy, but these deals were still limited, exhibitors said. Smaller Asian markets such as Singapore and the Philippines offered some sales. This puts a strain on the market as the Hong Kong show is generally viewed as the market check for events leading up to the festive season. In general, trade in different diamond centres is challenged and under extreme pressure. India, a major diamond processing country, considered halt ing rough imports for a period of two months ending December 2023 in the hope of alleviating the polish inventory in the diamond pipeline. Rough production The G7 countries account for almost 70% of the world diamond jewellery consumers market and are in the process of introducing mechanisms to stop the flow of Russian diamonds from entering G7 countries as of January 2024. Industry players are concerned that this will be parallel to that of the Kimberly Process mechanism. Alrosa, the Russian rough producer accounts for about 30% of global rough production. This development has been met with mixed sentiments in the market globally and it remains to be seen whether supply disruptions will make any reasonable impact on rough diamond prices, market stability and the supply and demand curve as it pertains to the natural rough diamond industry. This development, some might argue, is not what the diamond industry needs at a time when the industry is experiencing the current slug gish state.

The natural diamond industry has been negatively impacted by the rise in popularity of lab-grown diamonds.

Forecasting There remains an important need for differentiation between natural diamonds and lab-created ones. To counter the negative impact of the lab-grown ones, the natural diamond industry has to employ an aggressive marketing approach, but that will require a significant increase in necessary spending on this critical aspect. The natural rough diamond industry must improve supply chain transparency, provide traceability, and promote responsible sourcing mechanisms that will drive consumers’ confidence and understanding that natural polish diamonds are an invest ment purchase.

SDT The State Diamond Trader is a state owned entity established in terms of Section 14 of the Diamonds Amendment Act, 29 of 2005. The company is eligi ble by law to purchase up to 10% of the run of mine from all diamond producers in South Africa.

The price and commodity correction will require collaboration throughout the diamond value chain, ensuring that all the players in the different streams act responsibly and allow for profitabil ity throughout. The natural diamond industry has shown its resilience over the years in the face of adversity. 

January 2024  MODERN MINING  17