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Business Reporter
DEMAND for diamonds is expected to remain stable this year with mining companies in Marange projected to produce 12 million carats, diamond experts Rapaport have said.Last year Marange produced close to 17 million carats.
In its latest weekly report, Rapaport said during the first quarter to March, combined production of ALROSA, De Beers, Rio Tinto, Dominion Diamond Corporation and Petra Diamonds rose 11 percent year on year to 20,875 million carats.
It said the first quarter had been a period of relatively low production in the past two years falling short of the preceding three quarters.
“Based on published production reports, global production is expected to rise nearly 11 percent to approximately 141,5 million carats in 2013 — compared to 127,4 million carats in 2012 as published by the Kimberley Process (KP),” Rapaport said.
“According to Rapaport assessments, growth in 2013 was driven by steady increases at ALROSA, De Beers and Rio Tinto, while Zimbabwe reportedly significantly ramped up output at the Marange mines.
“However, production at Marange is anticipated to drop back to around 12 million carats in 2014. Furthermore, ALROSA is planning for this year’s production to remain at 2013 levels, while De Beers maintained its forecast for stable production of 30 million to 32 million carats in 2014.
“Rio Tinto, Dominion and Petra Diamonds are expected to continue to ramp up production for the remainder of the year, albeit at a slower year-on-year growth rate than experienced in the first quarter.”
In March, Zimbabwe auctioned about 400,000 carats at the inaugural Dubai Stock Exchange sale while in February it realised $70 million from the sale of 959,931 carats in Antwerp.
During the first quarter, ALROSA raised its production by 6 percent year on year to 7,9 million carats, largely thanks to a jump in output from its Aikhal division.
De Beers quarterly production grew 18 percent to 7,5 million carats.
Rio Tinto expanded its production by 13 percent to 3,7 million carats as the company processed higher-grade ore from the underground operations at its Argyle mine.
Rio Tinto also owns the Murowa mine in Zimbabwe and a 60 percent stake in the Diavik mine in Canada.
While production increased in the first quarter, so did demand for rough diamonds.
Rapaport, however, said demand slowed in April as manufacturers and dealers signalled that rough prices rose too quickly and they hope the polished market will catch up to the rough in the coming months.
Rough prices are projected to hold steady, or soften slightly, for the remainder of the year.
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