LSE-listed Gem Diamonds CEO Clifford Elphick looks forward to 2020 and is expecting higher diamond demand and prices.
In a video interview distributed by the diamond miner on Wednesday, Elphick said 2019 had been a tough year for the diamond mining industry globally, as evidenced by major companies going into business rescue.
For example, some Trans Hex operations in South Africa had shut down, and Russian miner Alrosa had announced cutbacks in its supply.
However, Elphick believes there are some green shoots in the industry, stating that prices had picked up from unprecedentedly low levels in the last two months.
Elphick expressed hope that this was the turnaround in pricing that the industry needed.
He stated that, for many years, the company had been speaking about a supply and demand gap and that prices would start reflecting the fact that demand was higher than supply.
“The market has looked ahead, noticing that, for example, pink diamonds were becoming more rare. Additionally, various studies had confirmed that Millennials have a high propensity to acquire diamonds, which will also contribute to diamond price increases.”
Meanwhile, Elphick said synthetic diamonds continued to emerge, for example with De Beers’ Lightbox business, and he believed it was benefitting the diamond mining industry.
“Many people find diamonds to be too expensive, but synthetic diamonds are an easier and cheaper way to get into the diamond consumption world,” he noted, adding that synthetic diamonds were complementary to real diamonds.
Gem Diamonds, too, was looking for impactful places that it could use new technology. For example, the company has a monitoring system at its operations, which, through computing power, drives efficiencies in the dispatch of trucks, limits distances travelled, and increase efficiencies of fuels, explosives and loading.
Elphick said the holy grail of the diamond industry was to not process kimberlite that did not contain diamonds.
“Our quest has been to find a way to see diamonds in the rock. We have been at it for six years and we have evaluated many technologies and we settled on one, which, according to lab testing, showed promise.”
The company was working through some remaining tweaks to the technology and Elphick anticipated that Gem would be ready to demonstrate how diamonds could be seen through kimberlite next year.