The global diamond mining industry may be one of the world’s best-kept secrets. Next to anything else having to do with diamonds, that is. The four largest diamond miners in the world are De Beers Group, Alrosa, Rio Tinto (NYSE: RIO) and BHP Billiton (NYSE: BHP). De Beers is privately held, having delisted from the Johannesburg stock exchange in 2001. Alrosa is owned by the Russian government.
Read The Ten Richest Diamond Mines In The World
Until about two decades ago, De Beers effectively controlled 70% to 80% of the rough diamonds market. Because of that control, the company could fix the price of diamonds. Not only that, but those prices were nonnegotiable and could differ from one customer to another. The whole business was shrouded in secrecy that still persists today. Alrosa, for example, reveals little about individual mines, choosing instead to refer to project groups.
To compile the list of the top diamond mines, 24/7 Wall St. reviewed public documents issued by the mining companies, professional journals and websites, as well as information provided by the Rapaport Diamond Report. We’ve indicated estimates where appropriate and dates when data for 2010 were not available.
In 2010, diamond miners produced more than 133 million carats of the precious stone, which were sold for a total of about $12 billion, according to a report from the Kimberley Process Certification Scheme. The top five producing countries — Russia, Botswana, Democratic Republic of Congo, South Africa, Canada — account for more than 75% of total production by weight. This state of affairs is not unlike the oil business, where about 100 massive fields supply about half the world’s oil.
As for scarcity, diamonds are far rarer than gold. Only about 175,000 tons of gold have been mined in all of human history. The estimate for total rough diamond production is around 500 tons, of which just 20% to 30% are gem-quality stones.
The value of scarcity is indicated in the difference between the price of gold, currently around $1,800/ounce, and as much as $1,800/carat for a diamond from Lethoso’s Letseng mine. There are 5 carats in a gram and about 30 grams in an ounce, for a diamond price of $270,000/ounce. Even at the 2010 average price of $90/carat, an ounce of diamonds costs nearly three times as much as an ounce of gold.
In the 1990s, the diamond trade suffered from a connection to civil unrest in west and central Africa. Stones came to be called “blood diamonds” in the press and, finally, “conflict diamonds” by the trade. In 2003, the industry adopted the Kimberley Process Certification Scheme under which diamonds were certified and labeled as originating legally from conflict-free mines. Sales of conflict diamonds have fallen below 1% of the worldwide total, although Zimbabwean diamonds’ acceptance is being questioned.
Following is our list of the top ten diamond mines in the world in 2010. The ranking is based on number of carats produced.
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