Globally, exploration for diamonds has almost floor to a halt. In Canada final yr, coal exploration attracted extra spending than diamond exploration ($61 million vs. $50 million), which fell 21% from the earlier yr, hitting a 20-year low.
Including to this downward momentum, in June, Rio Tinto abruptly pressed pause on its 75%-owned Fort à la Corne (Star-Orion South) diamond three way partnership in Saskatchewan. After pouring greater than $180 million over the previous six years right into a bulk-sampling program and different work to judge the venture, Rio Tinto instructed JV associate Star Diamond it will not be spending extra money this yr “past what is important for care and upkeep.” Star Diamond, which holds 25% of the massive however low-grade venture, mentioned that Rio additionally suggested that it “intends to conduct a near-term evaluation of its alternate options relating to the venture, together with its potential exit.”
It’s not clear but what Rio Tinto will in the end determine to do. However additional funding, quite than pulling again, would have given the sector a much-needed shot within the arm. And the corporate, which noticed its Argyle mine in Australia shut in late 2020, definitely wants to exchange that manufacturing and could be motivated to make the venture work, if attainable.
Whereas the diamond commerce and diamond costs have been devastated by the pandemic, costs have made a robust comeback (partly benefiting from uneven efforts globally to keep away from buying diamonds mined by Russia’s Alrosa). De Beers reported a 58% rise in its common promoting worth to US$213 per carat for tough diamonds within the first half of the yr, and its tough worth index rose 28% in comparison with the identical interval of 2021.
That’s unlikely to assist revive exploration instantly, nevertheless.
The actual fact is that there have been too many surprises in diamond growth around the globe, which have shattered investor confidence.