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diamond mining



With many of the world’s major diamond markets in lockdown as a result of the COVID-19 coronavirus pandemic, mining companies are feeling the heat. Among the latest to reveal this predicament is the De Beers Group, whose parent company, Anglo America, revealed that it has cut its production forecast sharply for 2020, from what it previous had been planned.

According to a statement put out by Anglo American, De Beers production forecast for 2020 has been reduced by 7 million carats, to between 25 million and 27 million carats.

“At De Beers, lockdown measures have significantly impacted diamond production in southern Africa, manufacturing in India and retail operations in the United States,” the statement noted.

Anglo American, which is a diversified natural minerals producer, is lowering production across, reducing its its capital spending by $1 billion this year and cutting operational spending by $500 million.

In addition to diamonds, Anglo American also is a major producer of platinum, gold, copper, iron ore and coal. The non-precious commodities have thus far proven to be more resilient than diamonds.


Writing a memo that was published on IDEX Online, industry commentator Chaim Even Zohar suggested that an improvement in the fortunes of the mining companies is unlikely before the giant Indian diamond industry comes out of lockdown.

“We need India to open up. Until the manufacturing opens up there, there will be no demand for rough diamonds,” Even Zohar quotes Stuart Brown, the ex-joint managing director of De Beers, and current CEO of Canadian miner Mountain Province Diamonds, speaking to the Financial Times.

“It seems as if miners have suddenly realized that they need India far more than India needs them. Mines are deeply indebted,” Even Zohar wrote.

An improvement in the fortunes of the mining companies is unlikely before the giant Indian diamond industry comes out of lockdown.

But the reduction of rough supplies into the market is not necessarily a bad thing at present, Even Zohar states. In his IDEX article, he suggests that the government of India could assist the country’s industry if, after the lockdown has been rescinded, it puts a three-month moratorium on rough diamond imports. This, he said, may not only help the diamond market to stabilize, but also to pick up.

The Ekati mine in Canada’s Northwest Territories, who owner, Dominion Diamond Mines, has filed for bankruptcy protection from creditors. 


One major diamond producer that is doing more than just cut production is Canada’s Dominion Diamond Mines, operator of Canada’s Ekati and Diavik mines.  

The company has announced today that it and certain of its affiliates have filed for insolvency. 

Dominion intends to use the process to engage in discussions with its lenders, creditors, equity owner and other stakeholders and to financially and operationally, positioning itself for recovery when global economic and industry conditions improve.

Dominion said it received and is considering a proposal from an affiliate of the Washington Companies, its current equity owner, to provide debtor-in-possession financing, which would help provide sufficient liquidity through the bankruptcy process. 

The Washington Companies proposes in the MOU for an asset sale that Dominion will pay or otherwise satisfy, among other things, all obligations to employees and governmental authorities, and all obligations under the company’s agreements with the First Nations and aboriginal groups in Canada.

“Although the company has strong diamond inventory, sorting houses and diamond markets are closed, Dominion noted in a statement. “These are key channels to facilitate the sale of the company’s inventory, so currently there is no ability to generate sufficient revenue to support Dominion’s ongoing financial obligations.”

“Given the rapidly evolving environment and uncertainty of the scope and duration of the restrictions and health and safety concerns associated with the COVID-19 pandemic, along with market dislocation and the continued capital calls from the Diavik joint venture, the company believes filing for protection under the CCAA (Companies’ Creditors Arrangement Act)is the most prudent course of action,” the statement continued.