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Outlook of the Russian Diamond Market
Frost & Sullivan, Nov 2011, Pages: 91
RESEARCH OVERVIEW
This Frost & Sullivan research service titled Outlook of the Russian Diamond Market provides a thorough analysis of the challenges, drivers, and restraints in the market. The study also provides recent revenue forecasts and recommendations for market participants' success. In this research, Frost & Sullivan's expert analysts thoroughly examine the mining and cutting segments.
This analysis is available through our Industrial Automation & Process Control Growth Partnership Services program. With continuous access to intelligence and resources from all seven perspectives of the Complex Business Universe, the Growth Partnership Services program ensures that you and your Growth Team™ are able to maintain a 360 Degree Perspective of the market.
MARKET OVERVIEW
Rich Kimberlite Deposits Brighten Prospects for the Russian Diamond Market
Deployment of Modern Equipment Essential for Productive Outcomes in Mining Low-grade Ore
Russia is the world's largest source of rough diamonds. It accounted for 23.5 per cent of the total diamond production in terms of volume, and 25 per cent in terms of value, in 2010. Alrosa, the state-owned company, was the largest diamond manufacturer in the world, followed by De Beers, Rio Tinto and BHP Billiton. The Russian diamond market is also facing a revival due to growing incomes and expenditure for luxury goods, especially in emerging countries. The Russian diamond market is export driven and is heavily dependent on global demand. In 2010, the exports of Russian rough diamonds increased by 28.0 per cent. Russia possesses prospective kimberlite deposits, which are expected to enable further increase in production capacity by facilitating a shift to underground mining.
“The Russian diamond market is at a mature stage and it is unlikely that the compound annual growth rate (CAGR) will exceed 3.7 per cent from 2011 to 2015,” notes the analyst of this research service. “However, in comparison with the global market, Russia still has the potential to exceed production capacity.”
Although the outlook for the market looks bright with the upswing in consumer demand and climbing diamonds prices, there are some challenges throwing a cloud of uncertainty over its future prospects. Large-scale mining activities have caused depletion of natural resources and environmental deterioration. During the long term, environmental protection will assume greater importance and safety regulations are expected to become more stringent in Russia, in line with global trends. For the last 20 years, no large diamond deposits have been found in the world, and all new deposits are low grade, compared with the existing ones. Companies are bound to face difficulties in mining for low-grade deposits in new, challenging locations given the increasing complexity of extraction. These circumstances indicate escalating costs of input commodities, such as oil, steel and explosives. Mining companies will also be expected to meet strict safety requirements concerning the working conditions and protection of employees.
“In Russia, additional costs are generated by energy consumption and expenditure on heating and insulation due to the harsh climatic conditions,” says the analyst. “However, the profitability of the diamond market depends on the balance between rising extraction costs and diamond prices.”
Faced with this scenario, Russian diamond manufacturers are striving to improve their techniques to enrich low-grade ore by using modern equipment. Moreover, they have to modify the enrichment process of the ores to limit the high transportation costs of low-grade ore by processing at the site or using larger monster trucks. Underground mining requires more resistant equipment that can function in harsh environments as well as meet strict safety requirements. Going forward, modernisation of the devices and mining equipment will become extremely vital, and pave the way to market progression by helping optimize efficiency and productivity.
MARKET SECTORS
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Mining
- Cutting
REASONS TO BUY
This comprehensive, objective information allows your company to mitigate risk, identify new opportunities, and drive effective strategies for growth.
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