De Beers, the world鈥檚 largest diamond miner by value, on Thursday, as the coronavirus pandemic has brought the global supply chain to a halt, affecting demand.
The Anglo American (LON:AAL) unit said it expected to produce between 25 and 27 million carats this year, down from a previous forecast of 32 to 34 million carats.
It expects to produce 25 to 27 million carats in 2020, down from a previous forecast of 32 to 34 million carats
The revised figure, De Beers said, is subject to ongoing adjustments to disruptions related to covid-19 as well as the timing and scale of the recovery in trading conditions.
The diamond market was in a dire state even before the coronavirus came along. Now, weeks into lockdowns聽in India, where most stones are cut and polished, and in other key nations, including top retailers, even major players face a bleak future.
India鈥檚 diamond hub was officially closed on March 24 and most retail outlets that sell diamonds and jewellery throughout the world, excluding China, were mandated to close in mid-to-late March.
鈥淟ockdown measures have significantly impacted diamond production in southern Africa, manufacturing in India and retail operations in the United States,鈥� De Beers .
Dominion Diamond insolvency
The news comes only hours after Dominion Diamond Mines, the Canadian miner聽that聽sold its luxury division Harry Winston in 2013, .听
Late on Wednesday, Dominion Diamond said the company and some of its affiliates 鈥渉ave filed for insolvency protection under the Companies鈥� Creditors Arrangement Act (CCAA)鈥澛燼nd has received an order from the Alberta Court of Queen鈥檚 Bench granting protection to the company under the act.
Dominion Diamond, the controlling owner of Ekati mine and a 40% partner to Rio Tinto in the Diavik mine, owes its creditors $550 million. That bill is due in 2022.
Operations at the Ekati mine聽have been suspended聽since March 19 due to the covid-19 pandemic, while production at Diavik continues. Both operations are located in Canada鈥檚 Northwest Territories.
鈥淲hile some rough diamond trading has taken place in recent weeks, the relative volume of transactions has been minimal due to the travel restrictions, and ultimately a lack of downstream demand as closed jewellers have no need to replenish inventory,鈥� diamond analyst聽Paul Zimnisky said earlier this week.听
鈥淭ypically in a crisis environment diamond trading liquidity dries up, however, now the circumstances are especially severe due to the unique nature of an acute concurrent demand and supply shock,鈥� he noted.
Global demand for all types of diamonds fell between 2018 and 2019, affecting small stones producers the most, due to an oversupply in that segment that dragged prices down.
Increasing demand for synthetic diamonds also weighed on prices. Man-made stones require less investment than mined ones and can offer more attractive margins.