Diamond Prices Are Spiking And That's Great News For Rio Tinto

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.

From Citi:

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.

Chart

Photo: Citi

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.

Chart

Photo: Citi

 

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