Lower Prices Hurting Canadian Diamond Industry

Reuters reported that lower diamond prices are hurting the Canadian diamond industry. Diamond juniors are having a tough time raising money and thus are doing less and less exploration — as a result, the region’s long-term prospects are looking increasingly worse.
As quoted in the market news:

Exploration spending in Canada’s diamond-rich Northwest Territories (NWT), the world’s third-biggest producer, is forecast to drop 54% this year, according to a Canadian government estimate earlier this year. That is bad news for an industry where even profitable deposits can take 10 to 20 years to develop into a mine.
“It’s worrisome,” said Tom Hoefer, executive director of NWT and Nunavut Chamber of Mines, which is based in Yellowknife, the territories’ economic hub and capital. “Exploration is the lifeblood of mining.”
Once the engine for booming diamond demand, the growth in China’s appetite for polished gems has slowed alongside its economy.
Anglo American-owned De Beers, the world’s top producer by value, expects 3% to 5% sales growth in China this year for its polished diamonds. They grew 5% last year, down from 29% in 2011. De Beers forecast flat global diamond jewellery demand in its 2015 annual outlook for the industry.

Click here to read the full Reuters report.