Every year, more than 130 million carats of natural diamonds are mined, processed and sold globally. It is estimated that 30% of these rough diamonds are used in the jewelry market while the remainder 70% of them end up in industrial applications.
Given the important role that diamonds play in our everyday lives, have you ever wondered where do diamonds come from or where they are found? If you did, you’ve come to the right place.
In this article, we will reveal some fascinating statistics about the diamond producing countries, the huge conglomerates involved and interesting information about the places where diamonds are found.
Let’s jump right in…
Here is a list of topics we will be covering:
Globally, diamonds can be found in more than 30 countries around the world. However, the vast majority of diamond production is concentrated within 5 countries, namely: Russia (45 million carats), Botswana (24 million carats), Canada (19 million carats), Democratic Republic of Congo (14 million carats) and Australia (13 million carats).
Collectively, these 5 countries account for more than 80% of the world’s supply of rough diamonds and below, I’ve also provided a brief overview of diamond mining in these countries.
Russia – It is widely believed that Russia holds the world’s largest reserve of rough diamonds and this is largely concentrated in the Yakutia region of northeastern Siberia. ALROSA is the state-owned mining company that has a near-monopoly of the industry in the country and they operate more than 10 mines in the region.
Botswana – Botswana may be a small African country but it is the 2nd largest diamond producer in the world behind Russia. The country’s massive volume of rough diamonds is driven by two of its primary mines – Orapa and Jwaneng. De Beers has a 50/50 partnership program with the Botswana government to run and operate these mines while the smaller mines are operated by companies like Lucara and Gem Diamonds.
Canada – Canadian diamonds have gained a reputation for being “clean” and conflict free because of strict environmental regulations and worker interests. Ekati is the first operational mine that was discovered in 1991 followed by the opening of Diavik mine several years later. While the kimberlite pipes in Canada are highly productive, they are also located in the far reaches of the Arctic region. This makes mining operations very difficult under extreme and frigid environmental conditions.
Democratic Republic of Congo – While the DRC is Africa’s largest diamond producer, the political environment has always been plagued by turmoil and tension. Unlike other high volume producing countries, the mining sector is made up of largely artisanal miners instead of big commercial players. DRC has also been known for producing “conflict diamonds” where mining operations are controlled by rebels and there is little care for labor or human rights.
Australia – Currently in fifth place for production volume, Australia’s Argyle mine is renowned for the fancy colored gemstones it produces. This mine is operated by Rio Tinto and produces largely industrial grade diamonds. It is important to note that the Argyle mine is near the end of its life span and the deposits there have been depleted.
In nature, diamond formation is a violent and chaotic process that happens deep within the Earth. As you can imagine, rough diamonds that are created naturally aren’t going to be perfect and will usually have some degree of flaws.
Depending on the source, the quality of mined diamonds can range from being industrial grade to being suitable for usage in jewelry (gem-grade quality). Below is a chart that depicts the share of gem and near-gem quality diamonds for the major diamond producers from 2009 to 2018.
It is estimated that 90% of diamonds from Canada will be of gem or near-gem quality while only 62% of Russian diamonds will be classified in the same category. While Russia is the world’s biggest producer of diamonds, its production numbers include a large portion of industrial grade diamonds. This results in a lower price per carat value of their overall diamond production.
From the chart above, it is very clear that Namibia’s rough diamonds fetch the highest price per carat in the world by a wide margin. The reason behind this is that most of Namibia’s diamonds are mined off-shore as secondary deposits which are washed into the rivers and oceans.
During this process, the rough diamonds have to undergo severe weathering and withstand the elements of nature. As a result, only the higher quality diamonds find their way into the secondary deposits while the heavily included diamonds don’t survive the journey.
In their raw form, rough diamonds look unassuming and do not display the beautiful sparkle that most people associate them with. Hours of planning, faceting and polishing are required by skilled craftsmen to produce a gemstone that radiates brilliance in the light.
India dominates the cutting and polishing industry with a market share of nearly 90% because of its low labor costs and a favorable regulatory environment. Outside India, China is the next largest polished diamond manufacturer due to its strong domestic demand for jewelry.
The “Others” segment is mainly made up of smaller niche market players found in New York City and Israel that deal with specialty stones like large-sized diamonds or highly valuable fancy colored diamonds.
Lab created diamonds have been disrupting the jewelry industry and they provide a less-expensive alternative to consumers shopping for an engagement ring. Besides cheaper prices, lab diamonds are also conflict-free and eco-friendly compared to mined diamonds.
The global market volume of synthetic diamond production is estimated to be around 6.5 million carats and it is growing at a rapid clip annually. Here’s a rough breakdown of the biggest producers of lab diamonds in the world.
Currently, most of the synthetic diamonds are produced in China and exported to consumers in the western world. China holds more than 50% of the market share and uses HPHT (high pressure high temperature) technologies to produce their diamonds while countries like USA and India adopt CVD (chemical vapor deposition) techniques to make their diamonds.
The world’s diamond deposits are largely found in Africa, Russia, Australia and Canada. Here are the top 5 biggest diamond mines in the world where large deposits are found and being mined.
#1 Aikhal – The Aikhal mine is located in the Yakutia region of Russia and is one of the most productive diamond mines in the world in terms of volume. It was originally an open-pit mine but was later converted into an underground mine to extend its lifespan to 2021. Its reserves are currently estimated to be a whopping 176 million carats.
#2 Jwaneng – The name Jwaneng has a literal meaning of “a place of small stones” when translated in Setswana. But don’t be fooled by its name as this is the world’s richest diamond mine in value. Operated by the Debswana Diamond company, it is the flagship Botswana mine under their portfolio and contributes a massive 60% of their total revenue. It is estimated to have a diamond reserve of about 166 million carats.
#3 Udachny – Established in 1971, the Udachny mine in Russia’s Yakutia region ranks as the 3rd largest mine globally. The word Udachny means “lucky” in Russian and it is blessed with a large underground reserve of diamonds. The latest estimates are placed at 164 million carats. Like many other open pit mines, it was converted into an underground mine to extend its productive lifespan.
#4 Nyurba – Owned by Alrosa, this Russian mine is made up of a total of 3 deposits which are called the Nyurbinskaya Pipe, Botuobinskaya Pipe and Maiskoye Kimberlite Body. Together, they are projected to have approximately 133 million carats in their reserves.
#5 Orapa – With roughly 130 million carats of diamonds in their reserves, the Orapa mine is a joint venture between De Beers and the local Botswana government. Orapa is the biggest diamond mine in the world by physical size and covers a surface area of 1.18 square kilometers.
In the past, the world’s diamond supply is notoriously controlled by cartels such as De Beers but that monopoly has since been broken with the discovery of new diamond sources around the world. Today, the diamond market is supplied by numerous mining companies that vary in the type, volume and value of rough diamonds they produce.
De Beers Group – De Beers is probably the most well known (or infamous) name in the industry and has been around for more than a century. They are involved in many facets of the diamond industry all the way from downstream direct retailing to upstream diamond mining and trading. In recent years, they had also entered the lab-created diamond market with their “Lightbox” brand of synthetic diamonds.
Alrosa – The state owned Russian mining company is the world’s largest diamond producer and also has operations in Africa. ALROSA is also known to discover some of the rarest and biggest fancy colored diamonds in the world (with the most recent being a 236ct amber colored diamond). Alrosa is also a social investment leader among gold and mining companies and contributes to various social and conservation causes in Siberia.
Rio Tinto – Rio Tinto is a publicly listed company that has businesses in global mining and processing mineral resources. They operate diamond mines across different continents like Canada, Zimbabwe and Australia. With strong corporate governance, their goal is to develop sustainable mining operations while providing economic benefits to the countries they operate in.
Dominion Diamond – Dominion Diamond Mines is a Canadian company with major stakes in the Ekati and Diavik mine. They were also the former owners of Harry Winston Inc where they operate a retail arm to sell diamond jewelry but have since sold the asset to the Swatch Group.
Petra Diamonds – A London-based company with a rich history and a widely diversified portfolio of mines in South Africa and Tanzania. Petra Diamonds shifted its core business from mineral exploration to production and grew to become one of the largest producers. Its fortunes turned when business was severely hit by COVID 19 and had to undergo a massive restructuring.
Others – This segment is made up of smaller diamond companies that are usually jointly owned by private businesses and countries. Notably, some of the top diamond producers in this category are Lucara Diamond Corp and Gem Diamonds which have mines in Bostwana and Lesotho.
The answer is both yes and no. Ever since the launch of the movie Blood Diamonds, there had always been questions about ethics and controversy surrounding the diamond industry. There’s also increasing consumer awareness about buying products that are associated with conscientious social or environmental values.
Given the growing market opportunity of a better-educated consumer market, companies like Brilliant Earth have also positioned their business to offer products that are sourced from ethical origins and fair-trade policies. Even gemological labs like GIA have started offering grading reports (GIA Diamond Origin Report) that evaluate a diamond’s geographic origin because of the demand for sustainability and ethically sourced products.
In my opinion, it shouldn’t matter whether a diamond comes from a large or small mine or whether it is lab created or natural. However, what does matter is that wherever the diamonds are from, they should be ethically sourced from sustainable practices and the human rights of all stakeholders are protected.
I hope this article has given you a better understanding of the upstream diamond industry and a better appreciation of where the shiny diamond on your engagement ring comes from.
If you are looking for more fascinating facts and statistics, head over to these links to learn more about the industry or how diamonds are created. And if you have any questions or feedback, feel free to leave a comment below or get in touch directly via email.