The diamond industry at a standstill

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By: Claire Fages Follow

From the mines to the rough stones trade and to their polishing, the world diamond industry is still largely paralyzed by the Covid-19. A giant in the sector, De Beers is looking to boost sales elsewhere than in the capital of Botswana, which has just re-confined itself.

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The diamond presentation sessions to international De Beers customers were canceled in April and May in Gaborone and are not about to start again: the Botswana authorities have kept the borders closed and have just imposed a new strict containment on the capital after the appearance of new cases probably imported from Covid-19.

Fifteen years after having installed the marketing of its rough stones in Botswana, De Beers is looking for alternatives to relaunch its ten annual sales as quickly as possible, even if it means bringing its product closer to its main customers in Belgium and India.

Mining production down 16 %

In India, where the activity of diamond cutting is far from starting again. In Surat, where 90% of diamonds are normally cut, the workshops are almost empty, despite the deconfinement decided by the Indian authorities. And for good reason: the employees have gone back to their regions of origin and it is they, more than the Gujarat premises, who are the most qualified. The Indian pruning industry is even considering moving to the villages.

The certification of the stones stopped in Antwerp in Belgium, as well as the polishing and the diamond trade in Tel Aviv, in Israel… Since March, the whole sector is paralyzed, the mines have been operating in slow motion in Southern Africa, Russia is reducing the airfoil in its giant Lomonosov mine, global production of rough stones could fall by 16% this year, estimates Rapoport.

25 % drop in demand in 2020

A limited offer which does not push up wholesale prices, they should drop by 10% this year according to Gemdax, the jewelers having closed shop in confined countries. Will the rebound in consumption in China be followed elsewhere and in particular in the United States, where half of the sales take place? We can doubt it with the impact that the coronavirus will have on the world economy, the French luxury giant LVMH still has a few weeks to renegotiate the purchase price of the American Tiffany.

Because diamond demand is expected to drop 25% this year, according to Gemdax. The industry is making an accelerated shift to digital to move away from the traditional model of shops where 90% of sales are still made.

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