The focus of this bulletin revolves around the looming supply side gap in the diamond industry due to the lack of significant new diamondiferous kimberlite finds in the last 10 to 15 years. Although technology is improving recoveries of rough diamonds, this will not be sufficient enough to deal with the issue. The results are obvious with increased efforts being made on extending the life of mines of existing operations. For example, Debswana recently announced that both Orapa and Jwaneng will be able to produce at near current levels through to 2050, and an upswing in exploration activities.
The spectre of synthetic diamonds also continue to rear its head as a potential threat to the industry. This issue will continue to gain prominence in light of the supply gap issues, and it is important that the industry develops a clear strategy with it. This should include ensuring that there is a clear differentiation between ‘natural’ and ‘synthetic’ to avoid a loss of confidence and a potential erosion of the long-term value of diamonds.
- Nigel Dixon-Warren
KPMG in Botswana