Business / Economy
Indian diamantaires pin hopes on Marange diamonds
05 Feb 2013 at 17:02hrs | Views
Diamantaires in world's biggest diamond cutting and polishing centre in Surat are looking at Zimbabwe for the required supplies of rough diamonds during the year as diamond production of mining companies like De Beers has decreased phenomenally.
Two of the largest diamond mines in the world -- Canada's Ekati and Diavik mines -- have exhausted open pit resources and now both are underground mines. The need to convert a mine from an open pit operation to an underground operation typically results in curtailed production given the geology of Kimberlite pipes -the geologic formation of the resource is shaped like a carrot -- and gets narrower at depth.
Ekati's production declined 28 per cent year-over-year in 2012 and Diavik's output is estimated to fall 17 per cent year-over-year in 2013. Three more of the world's largest mines are set to go underground over the next few years as Russia's Udachny mine is expected to be converted to an underground operation in the next two to four years and Botswana's Jwaneng and Orapa mines are expected to follow suit.
Rough diamonds achieved record prices in the summer of 2011, but have since slipped back to 2010 levels on global macroeconomic worries. However, current prices are still higher than historic levels of summer 2008, and supply is estimated to fall short of new demand over the next two decades, which could take prices back to new highs.
The rough diamond demand in India is pegged at $15 billion per annum since the last three years with the increased production following the rising demand of polished diamonds.
According to a recent report published by Zimbabwe government, the country expects diamond production from its Marange fields to double to 16.9 million carats in 2013 as the mining companies' ramp up production in the region where human rights groups have flagged concerns over rights abuses.
The Zimbabwe government through its mining firm Zimbabwe Mining Development Corporation (ZMDC) operates five joint venture mines in Marange, which produced 8 million carats in 2012 and generated $685 million in exports.
Diamond analyst Aniruddha Lidbide told TOI, "As the rough diamond production in world's leading mines are on a decline, Zimbabwe is the only hope for Indian diamantaires. It is only Surat, which has the skill to cut and polish the Zimbabwe stones."
Source - timesofindia.indiatimes.com