Zimbabwe to influence price and demand of rough diamonds

Zimbabwe to influence price and demand of rough diamonds
Published: 04 February 2012 (8541 Views)
Backed by high demand from the world's biggest diamond cutting and polishing centre in Surat, Zimbabwe is set to influence price and demand for rough diamonds in 2012. The market is currently ruled by the giant mining companies like De Beers, Alrosa and Rio Tinto.

Having received export approval from the Kimberley Process (KP) in November-2011, about 11 million carats of Marange goods from Zimbabwe are expected to enter the market in 2012, especially in India where the stones are largely manufactured in Surat.

Industry experts said Zimbabwe diamonds are expected to flow in the market in huge volumes throughout the year. This would further put an end to the price wars and the supply shortage experienced by Surat diamantaires post-recession.

Sources close to Marange operations in Zimbabwe told TOI that four mining firms operate in Marange, namely Diamond Mining Company (DMC), Chinese company Anjin, Mbada and Marange Resources. These four concessions are expected to reach about 20 million carats this year, up from about 9 million carats in 2011.

"Zimbabwe is set to rule the global rough diamond supply market in the next few years. Right now, the country is offering its average goods at $40 per carat, which is very cheap compared to other mining countries, whose diamonds are sold above $100 per carat. Already, Indian cutters are aware that the Marange goods offer them best margins in the market," a diamond analyst Anirudh Lidbide said.

According to the official statistics from Kimberley Process Certification Scheme (KPCS), the global diamond production fell by about four per cent to approximately 122 million carats in 2011 and the value of production rose to around 25 per cent to an estimated $14 billion. The rough diamond production remains significantly below the peaks of 2005 and 2006 when some 176 million carats of rough stones - Zimbabwe's production was not counted as the country was banned under KP.

For the first time after the KP's approval, diamonds from Zimbabwe's controversial Marange area are being tendered in the capital Harare this week. The DMC is holding a tender offering an estimated 4 lakh carats of rough stones and the Chinese owned mine Anjin is tendering some 5 lakh carats. The tendering process is most likely to be participated by the rough dealers and merchants from India and Israel.

Also, two other diamond mining firms - Mbada and Marange Resources - are auctioning about 7 lakh carats of rough stones in the next few days. However, a total of 1.6 million carats of rough stones will enter into the global supply chain.

"An excess supply of raw material in the market is set to increase the employment opportunities for the diamond workers here. Moreover, the rough inventories is likely to rise and that it will soften the prices, which was a double digit increase in 2011," chairman, Sanghavi Export, Chandrakant Sanghavi said.

- timesofindia

Tags: Diamonds,
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