Mercuria eyes equity in African assets, new metals boss says
“You will see us very present in Africa and putting our money where our mouth is in respect of the Copperbelt,” Kostas Bintas said.
Diamonds reserves in Russia, Congo and Botswana combined account for at least 80.6% of the world’s total, estimated at about 1.1 billion million carats, a report released on Wednesday shows.
According to data gathered by London-based Learnbonds.com, Russia has the largest reserves at 650 million diamond carats, representing about 52% of the global capacity.
Congo comes in second with 150 million carats or 13% of the world’s total, the report shows, while Botswana takes the third place, with diamond reserves totalling 90 million carats.
South Africa and Australia also account for a significant portion of the global reserves, with 54 and 39 million diamond carats respectively.
Despite the current drop in demand, a result of lockdowns measures triggered by the coronavirus pandemic, Learnbonds.com expects sales of rough stones to climb steadily over the next 30 years.
The study predicts that demand will hit 292 million carats by 2050, representing a growth of more than 88% by from 2018’s figure of 155 million diamond carats.
The forecast seems nearly too optimistic when considering current market conditions. The global diamond sector was still reeling from a collapse in prices and sales since late 2018, when covid-19 hit earlier this year.
A couple of months into serious measures to slow the spread of the virus, it has already squashed diamond miners’ dawning hopes of a recovery.
Alrosa (MCX: ALRS), the world’s top diamond producer by output, reported on Tuesday a 95% decline in sales during April, compared to the same months last year.
Last week, the Russian state-controlled company had decided to halt production at two of its mines, citing worsening market conditions.
De Beers, the world’s largest producer by value, cut 2020 production guidance by a fifth last month. It had earlier cancelled its April sales event.
Canada’s Dominion Diamond Mines, the controlling owner of Ekati mine and a 40% partner to Rio Tinto in the Diavik mine, filed for insolvency protection in April.
Lucara Diamond (TSX:LUC), another Canadian company, posted last week a net loss of $3.2 million, or $0.01 a share, for the first three months of the year.
The global diamond market was still reeling from a collapse in prices and sales since late 2018 when covid-19 hit earlier this year
The figure was in sharp contrast with the $7.4 million in net income, or $0.02 in earning per share the miner reported in the same period last year.
South Africa’s Petra Diamonds (LON:PDL) has recently delayed interest payments to borrow $21 million in new debt, a crucial move to keep the company afloat.
Investment banks are increasingly reluctant to extend credit to diamond producers, as inventory is not being sold and defaults are possible, analysts have warned.
“We are concerned about oversupply of rough diamonds following the reopening of economies, as a lot of inventory could potentially be flooded into the system and the market might not be able to absorb all of it, resulting in increased pricing pressure,” Citi said in an early May note.
2 Comments
Peter John Hatgelakas
That confirms to me that diamonds may be forever but they are amongst the world’s most common place gem. They are only rare because great stockpiles are being withheld from the market. I for one will hang onto my mineral collection where stones like actual mined gems, not synthesized or lab-grown ones, are the actual rarities. What a scam the diamond market has portraited on the public with these over-priced common placed minerals.
Christian Mutamba
I beleive that according to the numbers you provided in the article, Russia reserve represents 65% of the global capacity , Congo comes second with 15% and Bostwana third at 9%.