The baby boomer generation in the US is driving global demand for diamonds and the same thrust is expected to spread to other parts of the world, according to a leading industry expert.

South African-based James Allan, Principal of AllanHochreiter finance group, told the 15th annual Paydirt World Diamond Conference, which started in Perth today, that Americans born between 1945 and 1964 were now spending much of their disposable income buying diamonds. "If ever there was any doubt, diamonds are still a girl’s best friend – particularly in the US," he told delegates at the opening session of the Conference.

"The US represents about 43% of the world’s $72 billion annual diamond retail sales market," he said. "That is being driven by the baby boomers who are now in their 40s, 50s and 60s, and who are spending more and more of their disposable income on luxury items. We have seen spikes in the number of Americans taking cruises and buying Harley Davidsons – but diamonds are right up there, and that is what is driving world demand. And I see no reason why that trend won’t extend to the rest of the world. This is already evident in the lucrative petro-dollar economies of Asia and the Middle East where retail sales of diamonds are being rapidly driven higher with this region currently representing about 15% of global retail sales market."

In a wide ranging presentation, Mr Allan also stated:

International diamond exploration was on the increase, with Africa leading the way with $400 million spent in 2006, compared to $22 million in Australia
The global industry was currently in the midst of a ‘who eats who’ regime with many exploration companies being swallowed up by larger corporations
The availability of quality tyres for mining machinery – including trucks – was hampering the industry.
Dr Kevin Wills, the Managing Director of Adelaide-based diamond explorer, Flinders Diamonds, told the conference that new exploration technology and skills are assisting Australian diamond explorers edge closer to the country’s next major diamond discovery. A veteran diamond explorer, he said new technology was helping his company in its search for diamonds in one of Australia’s current mining hotspots – the Gawler Craton in South Australia.

Flinders Diamonds used its innovative helicopter borne magnetic survey techniques on the Gawler Craton region. And on Flinders Island, the company has just completed a high-tech, high resolution electro-magnetic survey over the highly diamond prospective island,

"New technology and skills are helping us do things we couldn’t do with previous exploration tools, so explorers are making more educated, calculated decisions than at any other time in history," said Dr Wills, who was involved in CRA’s (Rio Tinto’s) diamond search in the mid 1970s – regarded as the most successful period in Australian diamond exploration. "The challenge for us is to use the right technology in the right places."

Senior geologist, Dr John Armstrong, of Canadian diamond explorer, Stornoway Diamond Corp said the international diamond mining industry is currently sailing through a "perfect storm" – enjoying the ride between strong demand and diminishing global supply. He also remarked that diamonds were "mined like a commodity, but sold as a luxury product."

"Diamond exploration and development companies throughout the world are taking advantage of this ‘perfect storm’," Dr Armstrong said. "That is, the split between the supply and demand curve – basically the predicted demand for diamonds far outstrips what can be produced at the moment. Companies are trying to take advantage of that with new discoveries, or those that are already in their portfolios."

"Those with the ability to market their own products, and there are various advantages in that, and companies that are able to maintain the marketing rights for their diamonds, are those best positioned to prosper best."

Dr Armstrong said China and India were showing strong growth in the demand for diamonds – with that trend expected to increase further in the coming years.

Stornoway is one of Canada’s leading diamond exploration and development companies, involved in the discovery of over 150 kimberlites in six Canadian diamond districts.