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World diamond supply to peak in 2017, De Beers chief executive says
As stones become harder and more costly to extract, very little new supply is expected until 2020
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Global supply of diamonds will peak in 2017 and plateau in 2019, as the world’s largest miner and trader of the precious stone reins in production to weather waning demand for jewellery and rising production costs.
But as more rough stones lie in ever deeper mines, the cost of extracting them is increasing, said Bruce Cleaver, chief executive of De Beers Group since July, in an interview with the South China Morning Post.
“What we see is a slow decline in supply, as mines get deeper,” said Cleaver, who was in charge of the company’s strategy and business development before taking up the post to head the former near monopoly of global diamond trade.
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“Between now and 2020 there is very little supply even if all the new projects come online.”
The company, owned by Anglo American, which suffered from dwindling diamond prices and rising inventories in a tumultuous 2015, has seen consumer demand growth for diamonds slow in China, at a time when cost pressures are mounting for diamond producers given the challenges now faced in extraction.
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De Beers, and its Russian rival Alrosa PJSC, both cut their output in response to last year’s downturn. The dominant player has already closed some mines in Canada and Botswana.
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