Beyond the rise in demand for other precious commodities, like gold, diamond demand has surged as a result of increased demand from developing markets, according to Citi analysts.
After collapsing through the financial crisis, diamond prices have rebounded strongly driven by increased wealth in the developing countries. Although there is a very wide variation in diamond prices between industrial diamonds, very rare coloureds (pink, blue etc) and depending on quality (clarity), the 1 carat index below demonstrates the price recovery amongst the gem quality diamonds that are the biggest earnings driver for RIO.
Note, that rise in prices.
This is great news for RIO, which, while not being the biggest diamond producer, does make 12% of the world’s “higher value gem market.”
Note, some big diamond names like DeBeers also make the cut.
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