Bain & Company, Antwerp World Diamond Centre Publish Yearly Report

Bain & Company, in association with the Antwerp World Diamond Centre, published The Global Diamond Report 2013: Journey through the Value Chain, an annual report on the global diamond industry. One important finding is that while the rough diamond market is expected to remain balanced until 2017, after that time, supply is likely to fall behind demand driven by China, India and the United States.

According to the press release, other report highlights include:

• Upstream: a focus on operational excellence, strengthening the asset portfolio and adjusting the development pipeline. With stable market conditions in the next four years, mining companies are likely to focus on maintaining healthy balance sheets, attaining operational excellence and investing in technology to improve productivity. Given the supply-demand balance outlook, mining companies are also expected to carefully review their development pipelines to identify the projects that promise the highest returns.
• Middle market: continuing consolidation. The middle market has traditionally garnered the lowest margins along the diamond value chain, with some companies earning as little as 1–2%. Further consolidation and integration is expected in the middle of the value chain in order to maximize margins through scale and scope.
• Downstream: ensuring security of supply. Diamond jewelry retailers will be looking to capitalize on the growing demand for diamonds. Their key challenge will be to secure an adequate and consistent supply of polished diamonds in the range of sizes, shapes and colors suited to their product lines. A number of premium retailers have already integrated backwards along the value chain by investing in mining assets and cutting and polishing operations and securing access to primary rough supply. This trend is expected to continue.

Click here to read the full report.