De Beers Unable to Raise Supplies While Diamond Prices Keep Rising

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As some rough diamond markets see a rise in prices following Russia’s invasion of Ukraine, De Beers, one of the world’s leading diamond retailers, is finding it difficult to plug the supply gap the way it typically used to do in the past.

The price of a small rough diamond has jumped by around 20 percent since the beginning of March according to Bloomberg. The increase in prices followed the war in Ukraine and subsequent sanctions imposed by Washington on Alrosa, a Russian state-controlled entity that accounts for a third of global diamond production.

Around two decades ago, De Beers’ safes in London used to hold stocks of diamonds worth up to $5 billion. But this is not the case now. The company now only holds a working inventory of stock.

Moreover, its mines are also running at full speed, and chances of any significant additional supply prior to 2024 are said to be remote. “It’s very difficult to see us bringing on any new production,” Chief Executive Officer Bruce Cleaver said to the media outlet. “Thirty percent of supply being removed isn’t sustainable.”

Last month, Alrosa suspended the publication of its quarterly results and monthly sales data. According to Tom Neys, spokesperson for the Antwerp World Diamond Center, the Russian company is “holding off” on regular sales. However, he cites “informal” communications to reveal that there are occasional “on demand” sales to the city.

“Russian goods are still flowing [into Belgium],” he told jewelry media outlet JCK. “We do know that goods that are bought take a very long time before they arrive. Every import creates a lot of extra checks, making sure that goods get to their destination. That creates a difficult process and that means, of course, extra risk is involved. Because of that, it’s hard to say if and how much [volume has dropped].”

In the United States, big-name jewelers like Signet and Tiffany & Co. have announced ceasing the purchase of diamonds mined in Russia. De Beers is implementing steps to track products from mines to retailers to make sure that Western customers know that the diamonds they buy do not come from Moscow.

“Traceability and pipeline integrity are going to be the things that get accelerated out of the Russia-Ukraine war,” Cleaver said, according to Reuters. “We’re in good shape to be able to prove that to our consumers. We’ve been working on provenance for 20 years.”

The company has also launched a blockchain platform through which rough diamonds can be registered and tracked every time they change hands. In 2021, De Beers registered sales to the tune of $4.82 billion, half of which was from the United States. With Alrosa under sanctions, De Beers’ sales and market share could rise in the coming months.

Naveen Athrappully


Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.

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