by Greg Klein | December 19, 2014
Increasing concern about supply has some of the world’s top jewelry companies looking for stakes in diamond mines. Tiffany & Co and Chow Tai Fook Jewellery Group are now “reaching out to mine operators that range from the Canadian Arctic to the Kalahari Desert,” according to a December 18 Bloomberg report.
We need to measure the political risks, economic risks, deployment of staff—it’s not an easy decision.—Adrian Cheng, executive director for Chow Tai Fook
“Tiffany was a leader in the movement, investing in a Sierra Leone mine in 2011 and lining up agreements to buy future output at projects from South Africa to Canada,” the news agency stated. “Earlier this month, Adrian Cheng, the executive director for Chow Tai Fook, said his company is also examining Canadian projects with the idea of buying stakes.”
Apart from security of supply, jewellers want reassurance that the stones are mined ethically. “While Chow Tai Fook is continuing to examine Canadian projects, the company was put off by political risks in southern Africa,” Bloomberg added.
“There are a lot of opportunities, but it is not very easy because it is always in a foreign country, somewhere in Africa or Botswana, or anywhere around the world,” the agency quoted Cheng. “We need to measure the political risks, economic risks, deployment of staff—it’s not an easy decision.”
Rough diamond demand is expected to grow an average 4% to 5% up to 2024, states a December report from Bain & Company and the Antwerp World Diamond Centre. But supply forecasts see only 3.5% to 4% growth up to 2019, then 1.5% to 2% for the following five years.
Canada ranks third for global rough diamond production by value, with most of it coming from the Northwest Territories’ Lac de Gras region.