Supplies of diamond will be limited for several years

The world's largest diamond miner, Russia's Alrosa Group, has warned that supplies of precious stones will be limited for several years, due in part to downtime and a lack of new mining projects. Alrosa's inventory has dropped to an all-time low. Demand has picked up after last year's slowdown caused by the covid-19 pandemic, Deputy CEO Yevgeny Agureev said. "Our industry will work with limited supplies," he told the Financial Times (FT). Anti-pandemic closures and weak demand last year cut diamond mining by about 20 percent, according to consulting firm Bain. Large mines also stopped the activity. An example is the Australian Argyle mine, which falls under the mining company Rio Tinto. Before it shut down last November, it produced about a tenth of the world's diamond supply. Bain expects demand for diamonds to remain constant over the next decade. According to Agureyev, the situation will be difficult, but it will help prevent diamond prices from falling again due to their market surplus, as happened in 2016, for example. "On the one hand, it's a challenge because there is demand and supply is limited," he said. "On the other hand, it is a good situation, because there will be no surplus in the market," he added. Alrosa believes that the shortage of diamonds will increase their price, which is now lower than it was before the pandemic began. The Russian miner expects that the sale of diamond jewelry in the entire industry will reach a new record of $ 90 billion this year. The situation is complicated by the spread of coronavirus and weather. Alrosa has mines in Russia and South Africa. The state-controlled company, which accounts for more than a third of the world's production of rough diamonds, is trying to get the Russian Mir mine back into operation. In 2017, eight miners died here due to water leaks. But the launch of Mir will take "five to seven years," Agureev said "The increase in production is not easy to achieve," he said. "Once you decide to adjust your production, it's not easy to start over in one, two months or half a year. We work in regions where conditions are difficult and difficult to logistically operate, "he explained.