Investing in Diamonds
Diamonds are a form of carbon.
Diamond may well be the world's most versatile engineering material as well as its most famous gemstone. The superiority of diamond in so many diverse industrial applications is attributable to a unique combination of properties that cannot be matched by any other material. For example, diamond is the strongest and hardest known material and has the highest thermal conductivity of any material at room temperature. Diamond that does not meet gem-quality standards for color, clarity, size, or shape is used principally as an abrasive, and is termed "industrial diamond." Even though it is more expensive than competing abrasive materials, diamond has proven to be more cost effective in numerous industrial processes because it cuts faster and lasts longer than any rival material. Synthetic industrial is superior to its natural diamond counterpart because it can be produced in unlimited quantities, and, in many cases, its properties can be tailored for specific applications. Consequently, manufactured diamond accounts for more than 90% of the industrial diamond used in the United States.
Domestic Production and Use: In 2010, total domestic production of industrial diamond was estimated to be approximately 93 million carats, and the United States was one of the world’s leading markets. Domestic output was synthetic grit, powder, and stone. Two firms, one in Pennsylvania and another in Ohio, accounted for all of the production. Nine firms produced polycrystalline diamond from diamond powder. Three companies recovered used industrial diamond as one of their principal operations. The following industry sectors were the major consumers of industrial diamond: computer chip production, construction, machinery manufacturing, mining services (drilling for mineral, oil, and gas exploration), stone cutting and polishing, and transportation systems (infrastructure and vehicles). Stone cutting and highway building and repair consumed most of the industrial stone. About 93% of the U.S. industrial diamond market now uses synthetic industrial diamond because its quality can be controlled and its properties can be customized to fit specific requirements.
Recycling: In 2010, the amount of diamond bort, grit, and dust and powder recycled was estimated to be 33 million carats. Lower prices of newly produced industrial diamond appear to be reducing the number and scale of diamond stone recycling operations. In 2010, it was estimated that 458,000 carats of diamond stone was recycled.
Import Sources (2006–09): Bort, grit, and dust and powder; natural and synthetic: China, 63%; Ireland, 21%; Russia, 5%; Republic of Korea, 4%; and other, 7%. Stones, primarily natural: Botswana, 49%; South Africa, 29%; Namibia, 13%; India, 8%; and other, 1%.
Events, Trends, and Issues: In 2010, China was the world’s leading producer of synthetic industrial diamond, with annual production exceeding 4 billion carats. The United States is likely to continue to be one of the world’s leading markets for industrial diamond into the next decade and likely will remain a significant producer and exporter of synthetic industrial diamond as well. Owing to the negative impact of the economic recession on U.S. manufacturing sectors that utilize industrial diamond, U.S. imports in 2009 declined significantly compared with those of 2008, but they returned to prerecession levels in 2010. U.S. demand for industrial diamond is likely to continue in the construction sector as the United States continues building and repairing the Nation’s highway system. Industrial diamond coats the cutting edge of saws used to cut cement in highway construction and repair work.
Demand for synthetic diamond grit and powder is expected to remain greater than that for natural diamond material. Constant-dollar prices of synthetic diamond products probably will continue to decline as production technology becomes more cost effective; the decline is even more likely if competition from low-cost producers in China and Russia continues to increase.
World Resources: Natural diamond resources have been discovered in more than 35 countries. Natural diamond accounts for about 1.2% of all industrial diamond used, while synthetic diamond accounts for the remainder. At least 15 countries have the technology to produce synthetic diamond.
Substitutes: Materials that can compete with industrial diamond in some applications include manufactured abrasives, such as cubic boron nitride, fused aluminum oxide, and silicon carbide. Synthetic diamond rather than natural diamond is used for about 98.8% of industrial applications.
Diamond Producers
Aber Diamond - http://www.aber.ca/
Alrosa - Russia's state-owned diamond producer
Anglo American (NYSE: AAUK) - http://www.angloamerican.co.uk/ourbusiness/thebusinesses/diamonds/ - They own a 45% stake in the Diamond Trading Company, which is the sales and marketing arm of De Beers, the world's leading diamond producer.
BHP Billiton (NYSE: BHP) - http://ekati.bhpbilliton.com/ - The Australian mining company's EKATI diamond mine.
Bonaparte Diamond Mines - Savanna Mine in North West, South Africa
Botswana Diamonds (LON: BOD)
De Beers Group - http://www.debeersgroup.com/
Dentonia Resources (CVE: DTA) - http://www.dentonia.net/ - The company has an interest in DHK Diamonds, and holds claims in Lac de Gras, Northwest Territories, and the Pellatt Lake Claim Block.
DiamonEx - Lerala Mine in Botswana
Diamond Circle Capital - a closed-end fund based out of the Isle of Man which trades in London. Put out by Diapason Commodities management, the fund seeks to buy large, polished diamonds with an average value of $3m.
Diamond Fields International (TSE: DFI) - http://www.diamondfields.com/
Dianor Resources (CVE: DOR) - http://www.dianor.com/ - Leadbetter diamond project in Canada
Diavik Diamond Mines
Graff Diamonds - http://www.graffdiamonds.com/
Harry Winston Diamond Mines
Lazare Kaplan International - http://www.lazarediamonds.com/
Lucara Diamonds
Mohit Diamonds Pvt.
Paragon Diamonds
Rio Tinto (NYSE: RTP) - http://www.riotinto.com/ - Owns 60% of Argyle diamond field, the largest diamond mine in the world with a production of 34 million carats each year.
Rockwell Diamonds (CVE: RDI)
Stellar Diamonds (LON: STEL) - Droujba kimberlite in eastern Guinea
Tiffany & Co. (NYSE: TIF) - They don't make diamonds, but they sure do sell them. They have an agreement to buy/market the entire production of the Jericho Diamond Mine.
Tahera Diamond Corporation (TSE: TAH) - This Canadian company operates the Jericho Diamond Mine.
Petra Diamonds (LON: PDL) - http://petradiamonds.com/
Vaaldiam Resources - Duas Barras Mine in Minas Gerais, Brazil
Industrial Diamonds
Dennis Tool Co.
Diamond Innovations
Mypodiamond
Novatek
Precorp
Sii MegaDiamond
Tempo Technology
US Synthetic
Western Diamond Products
Industrial Diamond Laboratory
International Diamond Laboratory
International Diamond Services
Apollo Diamond
Diamond Administration of China - http://www.dac.gov.cn/diamond/index.aspx
Bharat Diamond Bourse - http://www.bdbindia.org/
(wiki) - Diamond on Wikipedia
Diamond News
2011-07-26 - (wfp) - Rockwell Diamonds sells unproductive assets for $6.5 million
2011-07-18 - (bi) - Why diamonds are a VC's new best friend
2011-07-11 - (pi) - Stellar Diamonds - Tongo valuation exceeds upbeat expectations - Northland
2011-07-08 - (sta) - Are diamonds forever?
2011-07-07 - (bl) - Diamonds lure insurance investor Cowdery as gems beat gold
2011-07-05 - (cp) - Diamonds make the cut for Chinese firms
2011-07-05 - (id) - Rockwell Diamonds taking action to improve diamond recovery
2011-06-29 - (id) - Gemesis says it has created nearly flawless white lab-grown diamonds
2011-06-29 - (bl) - Human Rights Watch tells consumers to refuse Zimbabwe diamonds
2011-06-27 - (pi) - Stellar Diamonds' Droujba kimberlite pipe extends below 388 metres
2011-06-27 - (id) - Diamond dealer caught trying smuggle $2.5M worth of diamonds into Israel
2011-06-26 - (id) - Alrosa to supply diamonds worth $30 million to Armenia in 2011
2011-06-26 - (id) - De Beers releases 2010 report to society: Living up to diamonds
2011-06-25 - (gt) - Dubai diamond trade may overtake gold
2011-06-25 - (wsj) - Two Zimbabwe diamond mines to resume exports
2011-06-23 - (smh) - Diamonds are a downturn's best friend
2011-06-18 - (nyt) - The king of really big diamonds heads to China
2010-11-10 - (nzh) - How to add some sparkle to your portfolio
2010-04-25 - (ft - De Beers to cut diamond production
2009-05-12 - (bbc) - Blue diamond fetches record price
2008-09-21 - (bbc) - Massive diamond found in Lesotho
2005-05-29 - (sd) - New technique produces 10-carat diamond
2005-05-16 - (sd) - Very large diamonds produced very fast
2004-02-26 - (sd) - Large diamonds made from gas are the hardest yet
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