While De Beers remains the world’s largest producer of diamonds by value, Russian diamond mining company Alrosa is now the world’s biggest producer by volume, which elevates its importance significantly.
Current economic sanctions against Russia do not extend to diamonds and although there are reports of broader and deeper sanctions being considered, the sanctioning of diamond supply from Russia is not on any current agenda.
“At this stage, nothing is happening to stop diamonds coming out of Russia and let’s hope the situation does not escalate where additional sanctions are imposed.
“It would be an absolute loss to the industry if Russia were not allowed to sell its goods freely,” Ernie Blom, who is serving his third term as president of the World Federation of Diamond Bourses, comments to Mining Weekly in a video interview.
The US government’s sanctions against Zim-babwe continue to inhibit dollar-based diamond sales from that country but, with European Union sanctions against Zimbabwe lifted, Belgium is now aggressively trying to reverse its loss of market share as a result of the Zimbabwesanctions by holding quite a few Zimbabwe rough diamond tenders in Antwerp.
“They’ve seen the need and they’re starting to address it,” says Blom.
The 25 000-member World Federation that Blom heads has 30 exchanges in 28 countries and 95% of all the world’s rough and polished diamonds go through these exchanges.
In South Africa, Blom would like to see government and the cutting and polishing indus-try join hands to halt the industry’s significant decline.
During its diamond heyday, South Africa had 4 500 polishers, a number that has since fallen to fewer than 600.
“There has to be a partnership between govern-ment and industry to reverse the trend and start to build up the diamonds industry again,” says Blom, who points out that South Africa’s neighbours to the north and west and other coun-tries have growing diamond industries.
“We can do the same, provided we work,” he reiterates, pointing out that the State Diamond Trader is working under difficult legislative circumstances in having to buy run-of-mine diamonds and sell them to beneficiators who have difficulty in viably polishing cheaper end goods.
By the same token, he is not sure that the mining companies would be happy if legislation were changed and they were forced to sell the cream of their production to the State Diamond Trader and be left with lower-end production.
He sees it as a conundrum that government, the industry and mining houses have to work out together if South Africa is to gain a bigger share of the global diamond-polishing market, which is currently very buoyant.
There has been phenomenal year-on-year growth, driven by the new emerging markets of China and India supplementing the American market as well as increased strength in the European market.
“The industry has fantastic growth potential,” he tells Mining Weekly.
Neighbouring Botswana, in creating facilities that are as good as, if not better than, London’s, has customers attending sights every five weeks, which has put Botswana on the map, increased tourism and assisted the country in becoming a regional hub.
While the federation does not see synthetic diamonds as a threat to the natural diamond industry, its biggest concern is the passing off of synthetic diamonds as natural diamonds. To counter this, it has rolled out machinery and tools that are able to check the authenticity of each and every diamond.