A recent report issued by RBC Capital Markets titled 'Diamonds - Where Will All the Rough Come From?' was intriguing. Expect price corrections short/long term. Another interesting fact was that about 90% of all rough diamond production comes from De Beers, Rio Tinto, Alrosa and BHP Billiton.
Finding new deposits takes years and is costly as diamonds are so scarce; for example, the Ekati mine took 10 years to find and seven years to prove and build. Even once found, it takes a long time to bring a diamond mine into production; the Star Project in Canada for instance, owned by Shore Gold, has had around $300m spent on it so far but is unlikely to start producing until 2012-2013.
- RBC Capital Markets
Useful link:
www.rbccm.com
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