De Beers sees diamond demand outstripping supply in years ahead

Rising global demand for diamonds, led by China and India, is expected to outpace growth in supply over the coming years, according to the industry's dominant force, De Beers.

In the next decade, demand is projected to grow on average by 1 to 1.5 percentage points above global inflation assumed at 2 per cent, executive head of strategy and corporate affairs Bruce Cleaver told the South China Morning Post. "We expect supply growth to be somewhat less than that of demand," he said, without giving numbers. "This is an exciting industry to be in as the fundamentals are good."

While six to seven mines were scheduled to come on stream in the next five to seven years, Cleaver said supply was tipped to peak in 2017, plateau in subsequent years and start falling in 2020.

It took 10 to 15 years to bring a discovery to production, he said, adding De Beers planned to maintain its exploration annual spending in the next few years at a level similar to last year's outlay of US$53 million.

The industry's exploration spending is running at just half the record level of almost US$1 billion seen in 2007, according to De Beers' inaugural Diamond Insight Report released yesterday at the Hong Kong Jewellery & Gem Fair.

"This situation is not expected to change in the near future, as the global mining industry continues to face pressure on capital expenditure," it said.