De Beers raises price of small diamonds amid shortage

Prices for those diamonds, which usually end up clustered around the solitaire of a ring, have skyrocketed since early April, when Alrosa was the target of U.S. sanctions linked to Russia’s invasion of Ukraine.

Diamonds are one of Russia’s top ten non-energy exports by value, with shipments in 2021 totaling more than $4.5 billion, and its state-owned diamond producer is responsible for about a third of global sourcing.

Unlike Alrosa, De Beers does not produce many of the diamonds used in low-end jewelry, typically found in chain stores such as Costco or Walmart – creating growing shortages as Alrosa’s ability to supply the market remains. uncertain.

People familiar with the matter told Bloomberg that De Beers applied a 5-7% price increase this week in Botswana, where the company holds 10 sales each year at events known as sights.

Around 60 hand-picked customers – known as sightholders – receive a black and yellow box each time. These contain plastic bags filled with stones, the number of boxes and the quality of the diamonds depending on what the buyer and De Beers had agreed in an annual allocation.

Prices for small rough diamonds, the type that would eventually be clustered around the solitaire stone of a ring, are climbing. (Image reproduced with the kind permission of Anglo-American | Flickr.)

The miner has raised the price of its rough diamonds for much of 2021 as it seeks to recover from the first year of the pandemic when the industry nearly came to a standstill.

The strategy, which applied to stones over 1 carat, saw De Beers recover steadily throughout the year, with prices earning 23% in just over a year, parent company Anglo American said in a presentation in December.

De Beers has only working stocks left and its mines are running at full capacity. There is little chance of significantly increasing supply before 2024, when a $2 billion underground expansion of its Venetia mine in South Africa is expected to be completed.

The diamond jewelery industry begins the year with diamond supply at historic lows, estimated by Bain & Company at 29 million carats in 2021. the report said.

(With files from Bloomberg)

Sarah C. Figueiredo