Sept. 20 (Bloomberg) -- Customers from emerging markets are buying more pink diamonds from Rio Tinto Group, the world’s third-largest producer of rough diamonds, as the colored gems begin to be appreciated for their rarity.
“Five years ago, we may have had one or two diamonds go to China and India, but now we’ll have more than 20 percent of the diamonds going to the developing markets,” said Josephine Johnson, business manager at Rio Tinto’s Argyle Pink Diamonds, at a private sale of 75 colored diamonds in Hong Kong. “China is particularly interesting because of the rapid growth in the appreciation and understanding of pink diamonds.”
The Argyle mine in Western Australia supplies 90 percent of the world’s pink diamonds. The mine is scheduled to stop production by 2020, which will leave less than 500 pink diamonds for global distribution and make the colored gems a compelling investment, Johnson said.
The U.S. accounted for about 38 percent of the global diamond market in 2011, while China had an 11 percent share followed by Japan and India with 10 percent each, according to De Beers, the world’s biggest producer of the gems. China may overtake the U.S. as the biggest consumer of diamonds by 2015, according to Antwerp World Diamond Center.
“Over the next 10 years, with plateauing stocks and increasing demand, you can only be bullish on diamonds,” said Dylan Dix, a Vancouver-based executive at HRA Group and a customer at the diamond sale in Hong Kong.
Rio, the world’s second-biggest mining company, is planning to cut jobs at the Argyle mine to reduce costs and improve efficiency, the company said earlier this month. The miner said in March it’s considering selling its diamond mines because they no longer fit its strategy.
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