Analyst sees global diamond output rising 11.5% in 2017

9th May 2017 By: Henry Lazenby - Creamer Media Deputy Editor: North America

Analyst sees global diamond output rising 11.5% in 2017

VANCOUVER ( – Global mined diamond output in 2017 is expected to increase 11.5% year-on-year to 142.3-million carats, worth some $15.6-billion, which itself is a 9.9% increase in forecast total value produced, evaluation by independent diamond analyst Paul Zimnisky has found.

The top ten largest mines in the world by value produced are estimated to represent 58% of global output. De Beers' Jwaneng mine, in Botswana, is ranked number one, and is estimated to independently produce 15% of the world’s diamonds by value.

Russia is estimated to be the largest producing nation by value at 35%, followed by Botswana at 22%, Canada at 14%, Angola at 8%, South Africa at 7%, Namibia at 5%, and Australia at 3%, he reported.

Currently, Canada is arguably the most active nation in the global diamond mining scene, Zimnisky said. The country hosts five large-scale diamond mines with state-of-the-art infrastructure, two of which are the newest world-class diamond mines in the world, Gahcho Kué and Renard.

Three of the five largest players in the industry - De Beers, Rio Tinto, and Dominion Diamond - own assets in Canada, and the nation also has the most robust diamond development project pipeline in the world, the New York-based analyst advised.

Gahcho Kué and Renard are estimated to bring to market 4.5-million carats of incremental supply this year, worth $500-million, with the two mines contributing about a third of the estimated 14.7-million carat increase is global diamond output in 2017 over 2016. Zimnisky believes that most of the balance of additional supply in 2017 is likely to come from De Beers, Alrosa and Rio Tinto increasing output relative to capacity.

For example, De Beers currently has about 35-million carats of production capacity and is estimated to produce 32-million carats, or 91%, of capacity this year, whereas the company only produced 83% of capacity in 2016, according to Zimnisky.

According to Zimnisky, several Canadian firms are advancing what have the potential to be world-class mines.

TSX-listed Peregrine Diamonds, which is currently expanding the resource at its Chidliak project, in Nunavut, has the potential to eventually produce more than a million carats a year worth in excess of $200/ct.

Fellow TSX-listed Shore Gold is updating the feasibility study on its Star-Orion project, in Saskatchewan, after working to optimise overburden removal and recovery options. If put into production Star-Orion has the potential to produce well over a million carats a year at a mine life that could exceed 50 years.

Meanwhile, Kennady Diamonds and North Arrow Minerals this week announced a raise of C$10-million and C$5-million to advance their Kennady North and Naujaat projects, in the North West Territories and Nunavut, respectively.