An Education in Diamonds

Whatever it is you want or need to know about diamonds, or your diamond specifically, we can help. Whether or not you choose to wear a CALA Diamond, or a piece of diamond jewelry from the CALA Collection, we’d love to help you make the right decision.

The Future of Diamonds

According to Howard Davies, head of Commercial Development for DeBeers, diamond supply is expected to increase in the coming years, but likely to plateau by 2020. Then supply is expected to significantly drop off during the following decade unless new major discoveries are made. Estimated global production will drop to 115 million carats by 2030, down from 160 million carats in 2014.

This trend would likely result in a widening gap between supply and demand that the industry will have to address because, while supply will likely slow, demand will not and, in fact, is expected to grow. Finding diamonds isn’t easy. In fact, over the past 150 years of exploration, only 60 commercial mines have been discovered, with only seven of those — Venetia, Orapa, Jwaneng, Mir, Udachnya, Catoca and Cullinan — considered “world class.”

The rising costs of exploration, coupled with the harsh realities of searching for new diamond-rich areas — brutal climates, extremely remote and inhospitable locations and challenging natural obstacles from which the diamonds must be unearthed — raise the possibility that maybe all the diamond mines have already been discovered.

Still, the obstacles haven’t kept De Beers from searching. The company has spent $50 million in the past two years hunting for new areas to mine. But are the mitigating factors of the costs and complexities of exploration worth the risk of those dividends not paying off? “It’s more hope than expectations,” Davies said, referring to the chances of uncovering a yet untapped treasure trove of gems. “And we’ve literally gone to the ends of the earth looking.”

In light of rising exploration costs, the shrinking supply and the difficulties in identifying new territories to mine, what then, is the answer? Expansion of existing mines is one solution. These include underground exploration at the Venetia mine in South Africa and the Jwaneng Cut 8 project in Botswana. Along with exploiting current sites, Davies said the industry must also exploit growing diamond demand, particularly in the emerging markets of China and India. The Far East, especially China, is where demand is growing exponentially and it presents the most powerful market for potential profits. De Beers estimates that by 2020, affluent and middle-class Chinese will account for the majority of the country’s population. “Potentially, the Chinese market could be bigger than the U.S. market,” Davies said.