DE BEERS GROUP

2020 DIAMOND
VALUE CHAIN
DASHBOARD
 DOWNSTREAM
Global consumer demand for diamonds grew modestly in 2019 in US dollar terms.
Although growth was strong in the US and Japan, this was dampened by currency exchange
rate effects in other main markets. In 2020, COVID-19 caused unprecedented disruption
to diamond markets. Recovery is likely to be non-linear and extend well beyond 2020.

2019 DIAMOND JEWELLERY AND POLISHED DIAMOND DEMAND (IN US DOLLARS, NOMINAL)

Global demand for GLOBAL (USDbn) US (USDbn) CHINA (USDbn)

Four of the five main diamond markets With a favourable macro-economic Demand by Chinese consumers in
diamond jewellery (US, China, India and Japan) grew backdrop, demand rose in both the local currency increased by 1 per cent,
reached US$79bn in local currency terms, with Japan
and India posting positive growth
bridal and self-purchase segments.
Sales of diamond jewellery grew
despite a sharp decline in travel to and
shopping in Hong Kong. However,
in 2019. This was an in US dollars too. 4 per cent to reach US$38bn – nearly foreign currency effects led to a
increase of just under half (48 per cent) the global market. 3 per cent decline in US dollar terms.

1 per cent on the

previous year, with
growth driven by a Polished Diamond Polished Diamond Polished Diamond
Change: +0.5% Change: +3.9% Change: -2.8%
nearly 4 per cent
increase in the US. 26.57 26.69 12.32 12.80 3.47 3.37
Diamond Jewellery Diamond Jewellery Diamond Jewellery
Change: +0.7% Change: +3.9% Change: –2.8%
78 36 10
79 38 10

INDIA (USDbn) JAPAN (USDbn) GULF (USDbn) REST OF WORLD (USDbn)

Sales rose 3 per cent in local currency Consumers gravitated towards larger Demand from consumers in the Gulf Demand for diamond jewellery
but only 1 per cent in US dollars with diamonds and designer jewellery declined 5 per cent as macro-economic elsewhere declined by 4 per cent in
depreciation of the Indian rupee. New brands, pushing up average sales prices conditions remained challenging. US dollars, depressed by unfavourable
analysis(1) shows this market was more and leading to a 2 per cent sales However, this was an improvement exchange rates. The main Western
robust in size and growth before 2019 increase in local currency terms. over the previous year, when VAT was European markets grew modestly
than previously estimated, as it was With yen appreciation, this reached introduced in the UAE. in local currency.
powered by the most affluent consumers 3 per cent in US dollars.
and the large organised jewellery retailers.

Polished Diamond Polished Diamond Polished Diamond Polished Diamond

Change: +0.8% Change: +3.0% Change: –4.7% Change: 2018: –4.6%

2.62 2.64 1.16 1.19 1.53 1.46 5.47 5.22

Diamond Jewellery Diamond Jewellery Diamond Jewellery Diamond Jewellery
Change: +0.8% Change: +3.0% Change: –4.7% Change: –3.5%
5 5 3 18
5 6 3 17

CONSUMER Among the many dramatic effects – an increased desire for We observe these trends
precipitated by the COVID-19 diamond jewellery as internationally and it appears
TRENDS IN A pandemic, De Beers Group has representing a meaningful gift they are likely to endure.
CHANGING identified changes in consumer
behaviour and the acceleration
that holds its value
– a preference for higher quality
WORLD of some existing trends in the products and the reassurance
diamond jewellery market: of brands
– growing use of online channels
for browsing and purchase

1 D E B E E R S G R O U P 2 0 2 0 D I A M O N D VA L U E C H A I N DA S H B OA R D
 GLOBAL POLISHED DIAMOND SHARE BY GEOGRAPHY
2018
2019

Growth in demand for polished growth rate was lower than in 2018. De Beers Group has revised historic
GLOBAL POLISHED DIAMOND VALUE diamonds was greatest in the US China and India also saw slower diamond demand trends in India
GROWTH (% y/y) in 2019, resulting in a rise of two growth. By contrast, slight improvements as a result of new studies conducted
percentage points in its global market in growth were evident in Japan and in 2019.
share. Greater China and the Gulf lost the Gulf, but the latter market still shrank.
-0.5% 2.6% ground in US dollars. However, the US
2.9% 1.9% 0.5%
3.6%
3.8% 0.4%
10.0%
13.0% 48%
18% 15% 10%
5% 4%
REST OF
US CHINA* INDIA GULF JAPAN
WORLD

2018: 6% 2018: 4%
2018: 10%
2018: 18% 2018: 16%
2010

2018
2014

2016
2015

2019
2012

2013

2017
2011

*Includes mainland China,

2018: 46% Hong Kong and Macau

GLOBAL DIAMOND JEWELLERY VALUE

GROWTH (% y/y) T HE IMPACT OF COVID-19 ON DIAMOND
3.3% 0.7%
DEMAND OUTLOOK
3.4% -1.7%
2.8%
2.8% -0.0%
2019 finished on a positive trajectory for regional diamond jewellery retailers reported
4.9%
3.2% diamond jewellery demand in the main positive growth year-on-year in mainland China.
10.5%
consumer markets. In the US, demand grew
In the US, the second quarter saw sales dip by
more strongly over the holiday season than
approximately 40 per cent. Overall diamond
at any other point during the year; the main
jewellery sales in the first half of 2020 were
diamond jewellery retailers in mainland China
estimated to have fallen by just under 20 per
reported growth in fourth quarter gem-set
cent year-on-year. Starting in June and continuing
jewellery sales; in India leading retailers’
into quarter three, there was evidence of
diamond jewellery sales were up in strong
rising sales among independent jewellers
double digits. This upward trajectory was
and jewellery chains as well as online.
disrupted when COVID-19 struck, first in China
2010

2018
2014

2016
2015

2019
2012

2013

2017
2011

in the first quarter of 2020 and then in the US In India, demand declined in the first half of
and the rest of the world in the second quarter. 2020 by more than 30 per cent, as sales
Jewellery shops closed for an average of four during the April-May lockdown dropped
weeks in China and six weeks in the US and by nearly half.
Notes: other main markets, resulting in significant sales
1 The global figure is affected by the change in market estimate for The demand recovery is not expected to be
India – see note 2 declines for an industry traditionally dependent
linear, particularly as localised lockdowns take
2 De Beers Group commissioned large-scale consumer research in on the in-store experience.
India in 2019, revealing that the demand for diamond jewellery place. Retailer expectations for the second half
there was higher than previously estimated. This has been De Beers Group research indicates that in the of the year are mixed, with more optimism in
corroborated by independent sources. The revision reflects several
trends since 2013: the strong growth in the Super Elites (UHNWI)
first quarter of 2020 sales of diamond jewellery the US but muted sentiments in India and the
who form a significant proportion of the market for diamonds in to Chinese consumers declined by nearly half Far East.
India, the organic growth of the middle classes and the expansion (45 per cent) year-on-year. A tentative recovery
of the market into lower tier cities. This new estimate for India The severe impact of COVID-19 on the
affects the global figure and some geographical splits. and release of pent-up demand took place
global economy and the second wave of
3 Retail Sentiment Studies in US, China, India and Japan, July 2020 the following quarter, benefitting established
lockdowns in quarter four put further strain
brands and online sales in particular.
on consumer sentiment and spending power.
Overall, sales of diamond jewellery to Chinese The consequences of these events will determine
consumers were still about one-third lower in the short to medium-term outlook. However,
the first half, but on a clear recovery path. In a weakening US dollar could offset some of
the third quarter, the major international and the softness in demand in local currencies.
 MIDSTREAM
2019 was challenging due to excess stocks
of polished diamonds, continued tightening
of liquidity and lower demand from retailers.

INDIA ROUGH DIAMOND TRADE

The year started with negative sentiment in (Mcts)1
the midstream. US/China trade issues and 152

a US government shutdown led to reductions 120

in consumer spending and therefore in
demand from US and Chinese retailers. 100 Net-import
Many diamantaires had excess inventories
of polished diamonds, particularly in lower 80
carat weights. De Beers Group estimates
that, even though consumer demand for 60
diamonds grew marginally in US dollar terms,
demand for polished diamonds from jewellery 40

retailers at polished wholesale prices fell

2.6 per cent in US dollar terms in 2019 due 20

to retailer destocking.
0
This translated into lower demand for rough
diamonds. Net rough diamond imports into -20
India, the world’s major diamond cutting and H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1
polishing location, declined by 17 per cent 2014 2015 2016 2017 2018 2019 2020
in carats in the first half of 2019 as factories
Import
reduced manufacturing capacity. Export

In the second half of 2019, lower rough 1): Source: Gem and Jewellery Export Promotion Council (GJEPC) Carats for rough imports and exports in February 2020 have been
diamond purchases, decreased manufacturing estimated using the average price of rough carats imported and exported in January 2020 and March 2020.
capacity and higher demand for polished
diamonds meant polished stocks started
returning to more balanced levels. Rough
diamond net imports into India increased
by 7 per cent in carats in this period. Despite
this, total rough diamond net imports declined
by 5.9 per cent in carats across the year.
Liquidity from lending banks declined,
due to both reduced demand and tighter
lending norms. However, leading midstream
businesses were able to de-risk their funding
by accelerating their cash cycles, accessing
term finance from the capital markets and
increasing the equity component of their
funding. This reduced their dependency on
banks for short-term working capital finance
and also created a cushion of undrawn
credit facilities.
By the beginning of 2020, following improved
demand from US and Chinese retailers,
midstream sentiment was starting to improve.
Then the COVID-19 pandemic hit.

IMAGE
DIAMOND BEING CUT AND
POLISHED AT KGK, BOTSWANA

2 D E B E E R S G R O U P 2 0 2 0 D I A M O N D VA L U E C H A I N DA S H B OA R D
COVID-19 IMPACT ON THE LOOKING AHEAD
MIDSTREAM IN THE FIRST
HALF OF 2020
As the COVID-19 outbreak spread, related Rough diamond demand and volume of
business closures and restrictions brought the cutting and polishing are expected to remain
industry to a halt. Most of the midstream was significantly below normal trading conditions
under some form of lockdown by the end in 2020. COVID-19 will accelerate the
of the first quarter, creating unprecedented transformation that was already underway in
supply chain disruption. Temporary closures retail: increased omni-channel, personalisation,
took place in factories in India and southern greater e-commerce sales and better inventory
Africa, and diamond trading halls in Tel Aviv, management. This shift could lead to a
Antwerp and Dubai. more efficient and healthy diamond pipeline
longer term.
Temporary retail store closures had a major
impact on sales of polished diamonds. Successful midstream players are expected to:
Limited sales in the second quarter, mainly
– work more closely with their customers to
to Hong Kong with the ultimate destination
understand their future polished diamond
being China, were not enough to offset falls
requirements
in the US.
– use data and analytics to improve their
No significant bankruptcies arose as banks ability to match customer demand
responded flexibly, maintaining credit lines,
– innovate in their systems and processes
extending borrowers’ repayment terms
and adapt to emerging technologies
and assessing covenant compliance on a
case-by-case basis. Credit lines remained – have impeccable business practices,
largely open for when business resumes recognising consumer and brand demand
at more normal levels. for authenticity and ethical credentials
– build financial strength despite decreased
With Indian factories closed in April and May,
bank liquidity and faster sales cycles
rough diamond demand fell substantially.
Major producers were flexible about
pre-agreed allocations. Rough diamond net
imports decreased by 58 per cent in carats
in the first half of 2020.
When factories reopened in June, new social
distancing requirements and lower demand
meant that overall capacity fell to less than
a third of its pre-COVID-19 levels. The
midstream shifted its limited capacity towards
the most sellable polished diamonds –
certified, better quality product.
The risk of reclosures remained high as
infections rose and at the end of June
factories in Surat closed again for two weeks,
due to a spike in new local COVID-19 cases.
 UPSTREAM
Global rough diamond production decreased by an estimated
6 per cent year-on-year in volume in 2019. Rough diamond
sales to cutting centres decreased by approximately 18 per cent
year-on-year in US dollar terms.

GLOBAL PRODUCTION ROUGH DIAMOND SALES

TO CUTTING CENTRES
In 2019, volumes decreased by an estimated 6 per cent from Rough diamond sales to cutting centres decreased by an estimated
154 million carats (Mct) to 144 Mct i, owing to lower production from 18 per cent in 2019, primarily as a result of lower sales from
De Beers Group (–5 Mct) and a downward revision of production De Beers Group and ALROSA. De Beers Group’s shareiii of global
estimates for Dominion Diamond’s Ekati mine (–4 Mct). Russia remained rough diamond sales in US dollar terms fell to an estimated
the largest producing country in volume terms for 2019, contributing an 31 per cent (2018: 35 per cent), while ALROSA’s estimated share
estimated 30 per cent of global volumes. Botswana was the second dropped to 24 per cent (2018: 26 per cent). SODIAM, another large
largest producing country, responsible for approximately 16 per cent producer of rough diamonds, contributed an estimated 9 per cent
of volumes. In value terms, De Beers Group was once more the largest (2018: 7 per cent) towards global rough diamond sales to cutting
producer in 2019, with ALROSA as the second largest. centres in 2019.

PRODUCTION BY COUNTRY
2018
2018 (Mcts)
12
1 2 3 4 5 6 7 8 154
2019
2019 (Mcts)
11 12
1 2 3 4 5 6 7 8 144 1
11 1
1. Russia 2. Botswana 3. Canada 4. DRC

$13.9bn
5. Australia 6. Angola 7. South Africa 8. All others
10

10
PRODUCTION BY COMPANY 9 estimated 1*
8
7 9
6 5 8
2018 (Mcts) 7 1*
4 6 4
1 2 3 4 5 6 7 154 5
3 2
3
2019 (Mcts)
1 2 3 4 5 6 7 144 2

1. De Beers Group 2. ALROSA 3. Rio Tinto 4. Dominion Diamond

5. Catoca 6. Informal sector 7. Juniors/ROW
1. De Beers Group 2. ALROSA 3. Rio Tinto 4. Petra Diamond
1*. of which DTCB 5. Gem Diamond 6. Lucara 7. Stornaway
At the time of publishing, De Beers Group estimates for rough diamond production volumes for 2019 to ODC iii 8. Firestone Diamonds 9. Mountain Province 10. SODIAM
(144 Mct i) were 5 per cent higher than the estimates in the Kimberley Process (KP) report for 2019 11. Informal sector iv 12. Other iv
(137 Mct ii). The variance is likely due to differences in timings of data sourcing. De Beers Group
production estimates were continually updated – as and when producers and national statistics agencies
published their production updates. The reporting methodology may also have led to some divergence
of the two production estimates. For instance, since production data for DRC in the second half of
2019 was not available for the KP report, an estimated production figure for DRC for the full year 2019
was produced by grossing up output from the first half. While necessary to create a reference point for
the analysis, this intervention could introduce inaccuracies for total production for the year. See note (i) 
on confidence levels of De Beers Group estimates of artisanal and informal rough diamond production.

3 D E B E E R S G R O U P 2 0 2 0 D I A M O N D VA L U E C H A I N DA S H B OA R D
COVID-19 IMPACT ON UPSTREAM LOOKING AHEAD

COVID-19’s impact on diamond mining began towards the end The time it will take for global production to return to pre-COVID-19
of the first quarter of 2020, bringing several temporary closures of levels of operating capacity will depend heavily on the pace of
diamond operations across the globe. Mandatory safeguarding economic recovery, the impact of potential lockdowns in the future
measures enforced by national governments, compounded by a desire and the growth of consumer demand. The longer-term outlook for
to conserve liquidity, put several mines under care and maintenance global production levels may fall if more mines are permanently
in the first half of 2020. closed this year as a result of the challenging market conditions due
to the pandemic.
MAIN MINES UNDER CARE AND MAINTENANCE
(AS OF AUGUST 2020) At the time of writing, Argyle, a large mine in Australia producing
predominantly small diamonds, remains the only officially planned mine
MINE PRODUCER ESTIMATED ANNUAL closure in 2020. The mine produced 13 Mct xix of rough diamonds in
PRODUCTION 2019, which accounted for 9 per cent of De Beers Group’s estimate
of global rough diamond production volumes for that year.
Aikhal ALROSA 2.6 Mct x
Underground v MAJOR NEW EXPECTED PROJECTS AND CLOSURES TO 2025

Zarya Open Pit v ALROSA 0.4 Mct xi NOTABLE NEW DIAMOND PROJECTS

Ekati vi Dominion Diamond 2.5 Mct xii – Maiskaya – Luaxe – Chidliak

Mines ALROSA, 2025 ALROSA/Endiama, De Beers Group,
Unspecified Unspecified
Liqhobong vii Firestone Diamonds 0.8 Mct xiii
MINES APPROACHING END OF LIFE
Williamson viii Petra Diamonds 0.4 Mct xiv
– Argyle – Komsomolskaya – Diavik
Renard ix Stornoway 2.0 Mct xv Rio Tinto, 2020 ALROSA, 2021 Rio Tinto/Dominion
Diamonds (anticipated to (no production Diamond Mines,
continue production reported to date 2025
In April 2020, De Beers Group publically revised its production guidance until the end 2020) in 2020)
for the year from 32-34 Mct down to 25-27 Mct. In May 2020,
ALROSA publically downgraded its production guidance for 2020
Notes:
from 34 Mct to 28-31 Mct xvi. Other diamond producers (e.g. Mountain i. Figures for informal production remain at a lower level of confidence than other production figures due
Province Diamondsxvii) have also reduced their production outlook to data availability but could be updated if new information becomes available  ii. Kimberley Process
2019 Global Summary  iii. Okavango Diamond Company sales, by value, are included in the De Beers
for this year, whilst some (e.g. Petra Diamondsxviii) have withheld this Group share of sales estimate as sales from Diamond Trading Company Botswana (source: De Beers
information due to uncertainty over the future impacts of COVID-19 Group Performance Reporting)  iv. Sales values are based on De Beers Group estimates where company
on mining operations. reports are unavailable  v. ‘ALROSA temporarily suspends mining at Aikhal and Zarya pipes’ (May 2020)
vi. ‘Dominion Diamond Mines announces decision to suspend operations at Ekati Diamond Mine
Among companies with published data, sales to cutting centres fell by in response to coronavirus pandemic’ (Mar 2020) vii. ‘Firestone Diamonds – QUARTERLY UPDATE – Q4
FY2020’ (Jul 2020)  viii. ‘Petra Diamonds – FY 2020 Trading Update’ (Jul 2020)  ix. ‘Stornoway Extends
nearly half (49 per cent) in the first half of 2020 compared with the first Care and Maintenance Period at Renard Diamond Mine’ (Apr 2020)  x. ‘Q4&12M 2019 ALROSA
half in the previous year. De Beers Group and ALROSA separately Trading update’ (Jan 2020)  xi. Calculated based on published mine data ‘The open pit mine on
Zarya Pipe deposit reached depth of 100 meters’ (Jul 2018)  xii. Estimated based on reported
cancelled sales events due to travel restrictions and offered their clients diamond production in Canada ‘Natural Resources Canada – Annual Statistics of Mineral Production’ 
greater flexibility to defer purchases. In July this year, ALROSA also xiii. ‘Firestone Diamonds – Final results for the year ended 30 June 2019’ (Dec 2019)  xiv. ‘Petra
began to provide a zero buy-out obligation for its long-term clients. Diamonds Limited Annual Report and Accounts’ (Oct 2019) xv. Estimated based on 2019 production
guidance ‘Stornoway Announces Fourth Quarter and 2018 Production and Sales Results, and 2019
Reduced consumer demand for diamond jewellery due to store closures Guidance’ (Jan 2019)  xvi. The Strategy Committee of ALROSA Supervisory Board recommends
downward revision of 2020 production guidance (May 2020)  xvii. ‘Mountain Province Diamonds
and the economic impact of the pandemic have resulted in a lower Announces Second Quarter and Half Year 2020 Results’ (Aug 2020) xviii. ‘Petra Diamonds – Q3 FY 2020
level pull-through of polished diamonds from the midstream and thus Trading Update and Liquidity Update’ (May 2020)  xix. Rio Tinto Annual Report 2019 (Feb 2020)
lower rough diamond sales. Demand for rough diamonds has also
been reduced as a result of lockdown measures (particularly in India)
restricting the midstream’s capacity to process rough into polished
diamonds. For ALROSA and De Beers Group, this has also caused
a build-up of some excess stocks, which is expected to decrease as
the market recovers.
© De Beers UK Limited 2020. All Rights Reserved.