Diamond Industry Overview

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Diamond Industry Overview

Key Takeaways

  • By 2027, the global diamond industry market size is expected to reach $113.63 billion. In 2021, rough diamond production grew to 116 million carats, according to The 11th Global Diamond Industry Report.
  • Major players in the market include ALROSA, Anglo American (De Beers), Rip Tinto, Petra Diamonds, and Mountain Province Diamonds.
  • Diplomatic sanctions on trade with Russia have created uncertainty in the diamond industry, given that Russia is the top global producer of diamonds. Because of this issue, the global supply of rough diamonds may be cut by more than 25%

Introduction

This report provides an overview of the global diamond industry, including the market size (in dollars and carats), a list of major players (producers) and major geographic markets (producers and importers), the current state of diamond supply, demand drivers, along with industry trends and predictions. The report takes a high-level look at each of these areas.

Global Diamond Industry: Market Size

In Dollars:

  • By 2027, the global diamond industry market size is expected to reach $113.63 billion.
  • In 2020, the lab-grown diamond market was worth $19.3 billion and is expected to be $49.9 billion by 2030, growing at a CAGR of 9.4%.
  • In 2019, the sales value of rough diamonds was $13.9 billion globally. The value of the diamonds once polished is $26.7 billion.
  • According to a recent report by Bain and Company, "In 2020, diamond jewelry sales fell 14% and rough diamond sales declined 31%. Luckily, industry revenues rebounded faster than expected and quickly exceeded 2019 levels. In 2021, revenue increased 62% in the diamond mining segment, 55% for cutting and polishing, and 29% for diamond jewelry retail—all rising above pre-pandemic levels (+13%, +16%, +11%, respectively)."
  • In 2021, sales of diamond jewelry was $84 billion.

In Carats:

  • In 2019 alone, about 142 million carats of diamonds were produced from mines, globally.
  • In 2020, global rough diamond production decreased to about 111 million carats.
  • In 2021, rough diamond production grew to 116 million carats, according to The 11th Global Diamond Industry Report,
  • According to data published by Statista in 2022, the global reserves of diamonds amount to about 1.2 billion carats.

Major Players

1: ALROSA

  • A link to this company's website can be found here.
  • ALROSA holds a 27.5% share of the diamond mining market, globally.
  • ALROSA produced 28% of total carats produced globally in 2021.

2: Anglo American (De Beers)

  • A link to this company's website can be found here.
  • De Beers holds a 23% share of the diamond mining market, globally.
  • De Beers produced 28% of total carats produced globally in 2021.

3: Rio Tinto

  • A link to this company's website can be found here.
  • Rio Tinto holds a 13.5% share of the diamond mining market, globally.
  • Rio Tinto produced 3% of total carats produced globally in 2021.

4: Petra Diamonds

  • A link to this company's website can be found here.
  • Petra Diamonds holds a 3% share of the diamond mining market, globally.
  • Petra Diamonds produced 3% of total carats produced globally in 2021.

5: Mountain Province Diamonds

  • A link to this company's website can be found here.
  • Mountain Province holds a 2.9% share of the diamond mining market, globally.
  • Mountain Province recovered 6,229,042 carats in 2021, which represents about 5.4% of total carats produced in 2021 (116 million carats, according to data cited in the Market Size section above).

Major Markets

Producers:

1: Russia

  • Russia produced about 32% of diamond carats globally in 2021.
  • Russia produced about 24.5 million carats of diamonds in 2021 (or about 32% of 116 million carats).

2: Botswana

  • Botswana produced about 19% of diamond carats globally in 2021.

3: Canada

  • Canada produced about 15% of diamond carats globally in 2021.

4: Democratic Republic of the Congo (DRC)

  • DRC produced about 12% of diamond carats globally in 2021.

5: South Africa

  • South Africa produced about 8% of diamond carats globally in 2021.

Importers:

1: China (including Hong Kong)

  • In 2020, China (except Hong Kong) imported $5.9 billion in diamonds and Hong Kong (separately) imported $11.4 billion in diamonds. Together, the total is $17.3 billion.
  • In 2020, China's diamond imports (without Hong Kong) represented an 8% share of total global diamond imports, while Hong Kong (separately) represented a share of 15.3%. Together, the total share is 23.3%.

2: India

  • In 2020, India's diamond imports represented a 21.3% share of total global diamond imports.

3: United States

  • In 2020, the U.S.'s diamond imports represented a 16.7% share of total global diamond imports.

4: Belgium

  • In 2020, Belgium imported $8 billion in diamonds.
  • In 2020, Belgium's diamond imports represented a 10.7% share of total global diamond imports.

5: United Arab Emirates (UAE)

  • In 2020, UAE's diamond imports represented an 8.5% share of total global diamond imports.

State of Diamond Supply

  • Diplomatic sanctions on trade with Russia have created uncertainty in the diamond industry, given that Russia the top global producer of diamonds.
  • Major diamond retailers, such as Tiffany & Co, are planning to suspend sales of Russian diamonds.
  • Because of this issue, the global supply of rough diamonds may be cut by more than 25%.
  • ALROSA, the Russian producer of rough diamonds was placed on the sanction list. The company is responsible for 28% of the global diamond supply. The Russian government owns 33% of ALROSA.
  • According to Bloomberg, these "disruptions could crimp supplies across North America and cost India $2.5 billion this quarter, or nearly 10% of its annual sales."
  • In Surat, India, one of the biggest diamond polishing hubs in the world, demand for polishing has fallen drastically as imports of new stones have decreased.
  • According to Bloomberg, "a caveat in US sanctions allows imports that are 'substantially transformed' in a country like India, though lawmakers are pushing to close loopholes. But polishers say some clients have started refusing Russian-mined stones, characterizing them as conflict diamonds. With so much uncertainty, India’s traders are preparing to mark the origin of every stone — re-routing Russian ones to friendlier markets in China, Southeast Asia, or the United Arab Emirates."
  • As of May 2022, India is still in the process of exporting pre-conflict Russian diamonds to the U.S., however, this supply was expected to run out in early June.
  • Vipul Shah, vice chairman of India’s Gem & Jewelry Export Promotion Council said that a long-term loss of access to Russian diamonds would be devastating to the industry and jeopardizes thousands of Indian jobs, and have a significant impact on major trading hubs globally.
  • These supply chain issues are expected to result in higher prices for diamonds and diamond jewelry.

Demand Drivers

1: Construction

  • An increase in construction activities globally is driving demand in the diamond industry, as diamond material is used in construction tasks such as hand sawing, core drilling, and wire sawing.
  • The global construction market is expected to grow at a rate of 7.4% CAGR between 2022 and 2028.
  • Diamond tools are among the most widely used types of tools on construction sites, as they have a wide variety of uses across material types (wood, metal, concrete, etc). Natural diamonds are important for construction uses, as artificial diamonds cannot be used due to their lower ability to resist wear and tear.
  • Within the global drill bit market, polycrystalline diamond compact (PDC) bits hold the largest market share. According to Mordor Intelligence, "since the invention of the polycrystalline diamond compact (PDC) by General Electric in 1971, this technology has impacted nearly all material removal industries." Between 2020 and 2025, the polycrystalline diamond compact (PDC) drill bit market is expected to grow CAGR of 4%+.

2: Industrial Applications

  • Industrial applications for diamond are also driving demand in the market, as diamond has unique properties such as low thermal expansion coefficient, the highest sound velocity and optical dispersion, low adhesion, optical transparency, and low friction.
  • An 'industrial diamond' is the name given to any diamond that is used for industrial purposes.
  • The use of diamonds within industrial applications is most commonly for abrasion. Demand is mostly generated by metal machining, construction, and exploratory drilling.
  • The demand for industrial diamonds has been increasing over the past 10 years.
  • By 2027, the industrial diamond market is expected to be valued at $2.30 billion, up from $1.9 billion in 2020, growing at a rate of 2.8%.

3: Jewelry

  • Use of diamonds for jewelry (ornamentation) is a key demand driver in this market.
  • The global luxury diamond jewelry market is expected to grow CAGR of 7.29% between 2022 and 2030, reaching a market size of $30.45 billion by 2030.
  • A 2021 survey of 5,000 millennial and Gen Z respondents from the U.S. found that diamond jewelry is the most desired tangible luxury item, and is the second most desired item across both tangible and non-tangible luxury items (only preceded by a vacation). The survey also found that 20% reported making a luxury jewelry purchase in the past two years, 50% of which featured mined diamonds.

Trends & Predictions

Trend: Increasing Adoption of Lab-Grown Diamonds

  • In 2021 and 2022, the market for lab-grown diamonds has continued to grow, as they are a more affordable diamond jewelry category.
  • Lab-grown diamonds have witnessed increased demand and decreased prices compared to natural-mined diamonds. In 2021, the average retail price of a polished, lab-grown diamond has declined to 30% of the cost of natural diamonds, while the average wholesale price has declined to 14% of natural-diamond prices. Comparatively, in 2020, these figures were 35% and 20%, respectively. This is happening because the supply of lab-grown diamonds has increased and associated technologies have become more advanced.

Trend: ESG Agendas

  • Increasingly, players in the diamond industry are launching ESG Agendas (i.e. company agendas regarding environmental, social, and governance activities).
  • According to Bain & Company, in 2021 "ESG topics appeared on executive agendas across the value chain, with climate impact and origin transparency rising to the top."

Trend: Development of Beneficiation Programs

  • In the mining industry, 'beneficiation' is a type of extractive metallurgy process that removes non-commercially valuable minerals from mined materials in order to improve the economic value of the mined ore. In the diamond industry, the term 'beneficiation' can be further applied to the practices of cutting and polishing, which also enhances the economic values of the stones.
  • In 2021, diamond-producing countries in Africa re-established their beneficiation initiatives and an increasing number of countries are attempting to develop these programs as well. The increase in beneficiation program development is expected to further increase the amount of cutting and polishing activities.

Prediction: Botswana Will Capture More Market Share

  • Botswana is currently the second-largest producer of diamonds in the world. As diplomatic sanctions on Russia continue, Botswana is poised to take on a more prominent role in the industry.
  • The government in Botswana has been making efforts to turn Botswana into a global industry hub for the diamond trade. Among these initiatives, the government is seeking to be the host of a new, permanent headquarters and secretariat for the Kimberley Process. "The Kimberley Process was initiated in 2003 by governments, civil rights groups, and industry players to increase transparency and try to eliminate trade in so-called 'blood diamonds.'"
  • Additionally, Botswana is looking into forming a new deal with De Beers while also seeking to increase the number of diamond industry jobs within the country, given that the Botswanian diamond industry is a major economic backbone of the country, as 90% of the countries exports are diamonds.

Prediction: Increased Reliance on Small Diamond Mines

  • An increased reliance on small diamond mines is likely to play out in the near future as global diamond supplies dwindle in light of sanctions on Russia.
  • For example, the India Diamond Trading Centre (IDTC) has been looking into sourcing rough diamonds from small diamond mines in South Africa and Central Africa. The diamonds from these mines are sold at diamond auctions held at trading houses, such as Bonas-Couzyn and I Hennig in Antwerp and Dubai. According to The Economic Times of India, "India Diamond Trading Centre has written to the commerce ministry to allow these auction trading houses to participate in the trading sessions in India so that small and medium diamond exporters can have access to these diamonds and spruce up their supply line."

Research Strategy

The information in this report was sourced from professionally compiled market reports, such as The Global Diamond Industry 2020-21 report and The Global Diamond Industry 2021-22 report, both published by Bain & Company, along with various market reports, such as those published by market research firms, such as Mordor Intelligence. Information was also sourced from interviews and commentary made by industry insiders and experts, as well as reputable third-party media outlets, such as The Economic Times of India and Bloomberg News. Almost all the information was found to be publicly available. A few minor calculations (percentages, addition) were performed using the available data to provide a more nuanced look at things like market shares and production output. Almost all the sources referenced were from the past two years. A couple of slightly older sources were used for historical reference and to obtain basic, non-changing facts (e.g. an industry definition). Overall, we aimed to provide the most up-to-date data for each area, while paying special attention to the impact recent economic changes have had on the industry (e.g. COVID-19 recovery, inflation, Russian sanctions).

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