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Posted on Wednesday, June 29th, 2022 in Diamond.
A diamond’s beauty is incomparable to any other gem, making it one of the most sought-after gemstones in the world. But natural diamonds aren’t the easiest to find. Diamonds take billions of years and a combination of intense heat and pressure to form under the earth’s surface. There are only a finite number of diamonds available in the world and it is becoming increasingly difficult and expensive to find new sources of diamonds.
Diamond mining is believed to have begun in India around 300 BC. The Golconda region of India was the only supplier of diamonds for the next thousand years. As the interest in diamonds grew and new deposits were discovered, diamond mining became more prevalent. Today, the majority of diamond mining occurs in Canada, Siberian Russia, Africa, and Australia. But the future supply from these sources remains uncertain. One of the world’s biggest diamond producers is Alrosa, a Russia company currently banned from doing business in the United States.
In addition to the lack of diamonds being supplied from Russia, production from some of the major diamond mines has diminished recently, causing them to close the mines entirely. For example, the Argyle mine in Western Australia accounted for 10% of the global production of natural diamonds and 90% of the world’s annual yield of natural fancy colored diamonds when it closed in 2020. All diamond mines have a finite lifespan so it’s just a matter of time before they fail to produce any additional rough.
The recent decline in diamond supply has come at a time when consumer demand for diamond jewelry is at an all-time high. This makes finding a new source for natural diamonds an absolute priority for diamond miners. Some potential new sources for natural diamonds include the deeper layers of Siberia and Canada’s Melville Peninsula and Baffin Island. Efforts are also underway to find a new source of colored diamonds to replace the Argyle mine that closed in 2020. But overall, spending on diamond exploration has been declining for years. According to data from S&P Global, companies spent $202 million in exploration in 2021. This is a fraction of the $986 million spent at its peak in 2008.
Even if mining companies choose to spend more money to find new natural diamonds sources, these new mines won’t start producing diamonds right away. In fact, we’re not likely to see a significant increase in diamond supply during this decade.
With diamond supply so low, it’s more important than ever to work with an experienced diamond buyer when looking to purchase your own diamond jewelry. They’ll have the resources and knowledge to determine whether or not a diamond is worth its price tag and negotiate a better deal so you won’t end up paying more money than you should. Contact us at 414-276-2457 or firstname.lastname@example.org if you have any questions regarding diamond jewelry.