Ten top tips for investing in diamond mining

Burgeoning demand from India and China means that the diamond mining industry is in the most positive situation for 30 years. Find out how you can make the most of the demand for diamonds.

Charlie Gibson
By Charlie Gibson
published

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Simultaneously, production at some of the world's biggest mines is beginning to tail off; in-ground resources have declined from 85 years worth of production in the mid-1980s to around 20 years worth today; and De Beers' fabled $5bn stockpile "has been sold off". Indeed, the diamond-mining industry is in "the most positive situation" it's seen for the last 30 years.

London's Aim market is currently host to 20 diamond exploration firms. One favoured by broker Collins Stewart is Petra Diamonds (Aim:PDL, 93p), which has exposure to three South African mines through its merger with Crown Resources a year ago and to Botswana through its acquisition of Kalahari Diamonds in September. The broker has a short-term price target of 121p per share on the company (32% above current levels), while Hargreave Hale has one of 135p (47% above).

Apart from the majors, other diamond firms to look at include Dwyka Diamonds (Aim:DWY, 34p); Gravity Diamonds (Aim:GRN, 14.5p); BDI Mining (Aim: BDI, 27p); Firestone Diamonds (Aim:FDI, 136p); African Diamonds (Aim:AFD, 165p); The Sierra Leone Diamond Company (Aim:SLD, 105p); SouthernEra Diamonds (Aim:SRE, 26.5p); Karelian (Aim:KDR, 5.75p) and European Diamonds (Aim: EPD, 24.75p).

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Charlie Gibson
Charlie Gibson

Charles has previously written for the MoneyWeek, giving readers his share tips regularly and covering other topics on the side such as stock markets and the economy. He has also written for The Business, Shares, Investors Chronicle and The Evening Standard, and Charles has presented on LBC and been a guest on BBC One and BBC World. Aside from his journalist background, Charles graduated as a chemist from the University of Oxford specialising in ligand gated ion channels.

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