De Beers or Alrosa, who’s first?

As a journalist who follows the jewelry industry pretty carefully, it's always interesting for me to read articles by the non-trade press on topics as complicated as the diamond market.

Case in point this week: This now-infamous article about Russia and diamonds from The New York Times.

In the article, the writer states that “Russia quietly passed a milestone this year: surpassing De Beers as the world’s largest diamond producer.”

That’s an interesting statement, and one that certainly caught our attention over here at National Jeweler.

But it also raised a number of questions, including, based on what? The article provides no hard data of any kind from Alrosa, or De Beers for that matter.

In the story, the writer does mention that while De Beers shut down production at a number of its mines because of low demand, the state-owned Alrosa kept its mines open to keep workers on the payroll and avoid unrest. (What the article doesn’t mention, however, is that De Beers paid its workers their full salaries during mine shutdowns.)

It's unclear if the writer is giving this tidbit as an explanation for how Alrosa might have surpassed De Beers, though this doesn’t appear to be the case as the two statements aren’t linked together in the story.

We asked De Beers spokeswoman Lynette Gould what De Beers had to say about this article, and here’s her response.

“No, it’s not correct,” she said when asked if Alrosa has surpassed De Beers in terms of being the world’s largest diamond producer.

She went on to say that she believes this statement stemmed from a “misunderstanding that De Beers production is ‘down 90 percent’ which, although true for the first quarter because Debswana was closed for most of that, is misleading if they think that production for the full year is down 90 percent."

Gould said De Beers plans to reduce its 2009 production by more than 50 percent (more than 25 million carats) versus 2008, noting, “This could be increased if trading conditions merit it.”

In any case, it's an article that certainly got the industry talking, and the issue of which companies are gaining on De Beers--which is no longer the undisputed king of the diamond jungle--is worth keeping an eye on in the future.