Russia is the world’s largest diamond producer

Russia was the largest diamond producer in terms of overall production volume in 2003 with 33 million cts. (Botswana produced 29 million cts. in 2003), according to the first-ever statistics released on the recovery, import, and export of diamonds in that country. In monetary terms, Botswana still leads Russia because the price of diamonds produced in Botswana is higher—an average $60 per carat compared to $51 per carat for Russian diamonds.

Prior to Russia disclosing its diamond production information, Botswana was considered the leading diamond producer in the world.

In 2003, Russia says it was the largest exporter of industrial diamonds in terms of overall volume, reported the Russian Information Agency Novosti. It was the second largest exporter after the European Union, where the major centers of diamond trade are concentrated.

Belgium and Britain are the main importers of Russian diamonds. In 2003, 86% of Russia’s diamond exports ($641.5 billion and $118.8 billion, respectively) were to these countries, the country said. In the first half of 2004, they imported 78% of all diamonds ($165.3 billion and $81.2 billion, respectively).

The next largest importer of Russian diamonds was Israel, with 9.28% share of Russian exports worth $81.9 billion in 2003 and almost 10% worth $31.6 billion in the first half of 2004.

The average price of diamonds exported from Russia is approximately $22 per ct., two times less than the average cost of production. Experts from the country’s finance ministry explained this discrepancy by the low quality of the exported diamonds.

“If we compare uncut diamond import and export data,” a source in the finance ministry said, “we will see that the average price of imported diamonds is much higher than the global average – $500-700 per ct. This discrepancy is caused by the specifics of diamond industry in Russia, which is oriented to processing large uncut diamonds. Export diamonds are usually small and less expensive.”

Russia disclosed its diamond statistics for the first time as a condition for its participation and leadership role in the Kimberley Process, a joint government, international diamond industry and civil society initiative to stem the flow of conflict diamonds. The data, which was kept secret until recently, was released on Dec. 23 and will now be posted on the finance ministry’s Web site.