Few known entities in the world precede the diamond. According to the Gemological Institute of America (GIA), diamonds trace back billions of years and were originally found buried dozens of miles beneath the Earth’s surface. Before the 18th century, most of the globe’s diamond supply was located in India, the second-most-populous country at over 1.3 billion people. Today, diamonds are mined in several other nations, including South Africa, Russia, Botswana, Brazil, the United States, Siberia – and yes, here in Australia as well. 

It raises the question: Since diamonds have been around for so long, what does the industry’s future hold? Noone can know for certain,, but the possibilities are numerous, given one of the world’s leading diamond producers is scheduled to close one of its mining locations in Western Australia later this year. 

Yet much like the way they glimmer, the future of the diamond mining industry appears quite bright.  

Argyle to close some time in 2020

As has been widely reported, Rio Tinto – among the world’s oldest and largest metals and mining corporations, which was founded nearly 150 years ago – is expected to end operations at its Argyle mine in Western Australia, its other two located in the Northwest Territories in Canada and Zimbabwe in Southern Africa. Rio’s Argyle mine is predominantly responsible for the world’s supply of pink diamonds. As noted by CBC News and Reuters, 90% of the globe’s pink diamonds originate from Argyle. In terms of diamonds overall, of the between 140 million and 145 millions carats produced in 2018 – the most recent year for which data is available – roughly 10 million to 15 million were mined in Argyle. 

However, due to the glut of diamonds on the market and rising operational expenses – particularly in terms of costs associated with diamond extraction – economic realities have forced the supplier to restrategize.

Arnaud Soirat, CEO for Rio’s copper and diamonds division, told Reuters that while the company will no longer operate in Australia, it has no intention of getting out of the diamond mining industry altogether.

“Diamonds is a business we like a lot,” Soirat explained. “It’s a very high-margin business in line with our strategy of value over volume. It makes a lot of sense.” 

Cost concerns appear to be the primary reason for Rio shutting down its Argyle mine, as diamonds are still available for extraction, according to IBIS World. However, given that the site opened in the mid-1980s and began as an open pit, miners have been forced to dig increasingly deeper in order to unearth diamond deposits, which is part of the reason why it eventually transitioned to an underground operation.

Mines globally are reducing production

Independent diamond industry analyst Paul Zimniski told CBC News that traditional mines are closing at an elevated clip in much of the world because supply is so high. De Beers, which has been among the world’s largest diamond producers for well over a century, announced in July 2019 that it also planned on reducing mining activity, The New York Times reported. Prior to this announcement, De Beers has opened several mines since 2008, the most recent being Gahcho Kue in Canada’s Northwest Territories. Rough diamond production worldwide for De Beers fell 11% through the first six months of 2019 compared to the same period a year earlier. 

Diamonds are also being produced more frequently in laboratory settings, which also helps to rein in costs for diamond miners and suppliers, according to The New York Times

Even though the door may be closing on the Argyle mine, another is opening, as the government and private companies are investing millions of dollars in exploration, the results of which could dictate what the future of diamond mining in Australia will look like. 

Mines and Petroleum Minister Bill Johnston told ABC Rural he’s very encouraged about the diamond industry in Australia in the Argyle aftermath, as explorations are already underway, old sites are being revisited and miners have embarked on a number of successful drilling expeditions. In 2018, for example, the Lucapa Diamond Company discovered over 1,100 diamonds approximately 1,800 kilometres north of Perth and 50 kilometres east of the Ellendale mine, ABC Rural reported at the time. 

“It’s not going to happen overnight, but restarting mining operations at the former Ellendale mine will be a high point in the rejuvenation of diamond exploration and mining in the Kimberley,” Johnston explained.