Zim diamonds projected to hit 14m carats

time when the country was facing extreme domestic and international impediments,” says the report.
Equity Communications is an investor communications firm and business information provider specialising on the Zimbabwe economy and industries that have global significance, such as tobacco and platinum.

“The country has not conquered all its problems but it has emerged as an important diamond producer. Diamond production from Zimbabwe is now projected to rise to 14,5 million carats, valued at US$1,7 billion by 2014, after the country was given the Kimberley Process green light to freely resume export of diamonds from Marange,” says the report.

The world production of rough diamonds last year stood at 125,6 million carats, a decline of 2,1 percent from a year earlier, said the report.
The decline in world production for 2011 would have been “steeper” had it not been for “significant” growth of 31,5 percent in Zimbabwe production.
The value of the world’s 2011 production was US$13 billion, an increase of 12,9 percent on the 2010 value.
On the sales front, diamond producers had another splendid year with sales rising by 21,9 percent to US$15,6 billion.

The report also noted that Anjin Zimbabwe’s US$350 million investment in Marange would result in the company emerging as one of the largest diamond producers in the world, with 10 percent of global output by 2018.
The report said Zimbabwe would experience the biggest gain in production in the forecast period, becoming the second largest producer in 2018 after more than doubling market share to 17 percent. Australia, Russia and Zimbabwe were expected to account for two-thirds of world output growth in the forecast period.

The report also noted that from 2010 to 2018, the annual value of world production of diamonds would increase 113 percent from US$11,5 billion to US$24,5 billion.
For the forecast period, per carat value of production “should” rise steadily with increased production.
Increased output, mainly from Zimbabwe and Australia, will drive down the annual growth in per carat value of production from the current 19,47 percent per annum to 4,78 percent per annum.

In the eight years to 2018, world diamond producers plan to spend US$15 billion on new mines and expansion of existing mines. If all projects go according to plan, annual production capacity will increase to plus-180 million carats around 2017-2018.
“Zimbabwe has also announced the discovery of new diamond fields in different parts of the country while the Marange diamond fields have been extended by a further 50 000 hectares to 120 000 hectares,” said Mr Tinashe Takafuma, Equity Communications director and lead author of the report.

“However, because of the difficult operating and financing environment in Zimbabwe, we do not foresee any new mines coming on board in the near future.”
Unprecedented diamond demand for investment consumption appears to have taken over diamond markets in recent times. International trade in rough and polished diamonds increased 56 percent from US$191 billion in 2007 to US$297 billion at the end of 2011.

At the consumer end, global diamond jewellery products sales reached a record US$75 billion in 2011, finally surpassing 2007 sales of US$68,3 billion.
But global diamond jewellery sales are now expected to retreat 5 percent this year to US$72 billion because of short-term economic uncertainty that has engulfed key emerging consumer markets for diamonds.

This economic uncertainty will slow down consumer purchases of discretionary goods.