A recent analysis conducted by analyst Anastasia Smolnikova from the Institute for Natural Monopolies Research (IPEM) for Rough & Polished looks at the performance of several major diamond miners in 2020 and their production guidelines in 2021, and crunches the numbers to come up with a positive trend for the industry. Here are some major points from the article:

Alrosa: The Russian mining giant reduced its diamond production by 22% in 2020 to 30 million carats. According to its forecast published in March of this year, the miner plans to increase diamond production to 31.5 million carats in 2021. As for sales, in 2020 Alrosa’s rough diamond sales decreased by 19% by value and by 4% by volume compared to 2019 and amounted to 32.1 million carats for $2.652 billion. In Q4 2020, things looked much better: sales were higher by 29% by value (compared to Q4 2019) and by two times by volume. 

De Beers: Alrosa’s main competitor reduced its diamond production by 19.4% to 25.1 million carats in 2020. In 2021, De Beers plans to increase its diamond production to 32-34 million carats. In 2020, the miner’s rough diamond sales decreased by 30% by value and by 27% by volume against the previous year and totaled $2.8 billion and 21.4 million carats, respectively. De Beers’ sales in its January 2021 Sight were 20% higher year-on-year, while its 2nd Sight showed a rise of 55% compared to the second sight in 2020.

Rio Tinto: Rio Tinto’s Argyle mine closed in November 2020. In 2020, Rio Tinto recovered 14.7 million carats – a 14% decrease year-on-year. The miner’s only active asset is Diavik, which is forecasted to produce 3-3.8 million carats in 2021.

Lucara Diamond: Lucara, which operates the Karowe mine in Botswana, recovered 381,700 carats in 2020 – down 12% from the previous year. In 2021, the company expects to recover 340 to 370 thousand carats. At the same time, the forecasted sales volume is slightly higher and totals 350-390 thousand carats. 

Gem Diamonds: Gem Diamond recovered 100,800 carats in 2020 at its Letseng mine in Lesotho – down 12% year-on-year. However, the company achieved an average price of $1,908 per carat – 16.5% higher than in 2019. In 2021, Gem Diamonds plans to increase its diamond production to 123-127 thousand carats.

The article analyses the performance of several other mines, including Petra, Catoca and more, and comes to the conclusion that the industry is heading into “a very positive trend”. In 2021, according to the companies’ forecasts, diamond production may increase by 2.5%. However, production level may equal the current one or even drop below it if Arctic mining does not pan out. 

The writer concludes: “In general, when describing the industry sentiment at the end of Q1 2021, the words “very cautious optimism” can be used. “Very” – because any forecasts, especially favourable ones, in the so-called “new reality” are made with a high degree of probability, and this situation is unlikely to change in the short and medium term”.