Alrosa World's Largest Diamond Producer by Volume

While De Beers remains the world's largest producer of diamonds by value, Russian diamond mining company Alrosa is now the world's biggest producer by volume, which elevates its importance significantly.

Current economic sanctions against Russia do not extend to diamonds and although there are reports of broader and deeper sanctions being considered, the sanctioning of diamond supply from Russia is not on any current agenda.

"At this stage, nothing is happening to stop diamonds coming out of Russia and let's hope the situation does not escalate where additional sanctions are imposed.

"It would be an absolute loss to the industry if Russia were not allowed to sell its goods freely," Ernie Blom, who is serving his third term as president of the World Federation of Diamond Bourses, comments to Mining Weekly Online in the attached video interview.

The US government's sanctions against Zimbabwe continue to inhibit dollar-based diamond sales from that country, but with European Union sanctions against Zimbabwe lifted, Belgium is now aggressively trying to reverse its loss of market share from the Zimbabwean sanctions, by holding quite a few rough Zimbabwean diamond tenders in Antwerp.

The 25 000-member world federation that Blom heads has 30 exchanges in 28 countries and 95% of all the world's rough and polished diamonds go through these exchanges. In South Africa, Blom would like to see the government and the cutting-and-polishing industry join hands to halt the industry's significant decline.

During its diamond heyday, South Africa had 4 500 polishers, a number that has since fallen to fewer than 600. "There has to be a partnership between government and industry to reverse the trend and start to build up the diamonds industry again," says Blom, who points out that South Africa's neighbours to the north and west and other countries have growing diamond industries.

"We can do the same, provided we work," he reiterates, pointing out that the State Diamond Trader is working under difficult legislative circumstances in having to buy run-of-mine diamonds and sell them to beneficiators who have difficulty in viably polishing cheaper end goods.

By the same token, he is not sure that the mining companies would be happy if legislation were changed and they were forced to sell the cream of their production to the State Diamond Trader and be left with lower-end production.

"The industry has a fantastic growth potential," he tells Mining Weekly Online.

While the federation does not see synthetic diamonds as a threat to the natural diamond industry, its biggest concern is the passing off of synthetic diamonds as natural diamonds. To counter this, it has rolled out machinery and tools that are able to check the authenticity of each and every diamond.

Because diamonds can also lend themselves to money laundering, the federation is putting systems in place to ensure that the concealment of the origins of illegally obtained money cannot be part of the legitimate diamonds trade.