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As for scarcity, diamonds are far rarer than gold. Only about 175,000 tons of gold have been mined in all of human history. The estimate for total rough diamond production is around 500 tons, of which just 20% to 30% are gem-quality stones.

The value of scarcity is indicated in the difference between the price of gold, currently around $1,700/ounce, and as much as $1,800/carat for a diamond. There are 5 carats in a gram and about 30 grams in an ounce, for a diamond price of $270,000/ounce. At the average price of $100/carat, an ounce of diamonds costs nearly two times as much as an ounce of gold.

Harry Winston Diamond Corporation (HWD) presented the world's highest value per tonne diamond mines at Deutsche Bank's (NYSE:DB) Global Consumer Conference on June 21. Here is a table of the top 20 mines.

MineCompanyEstimated $ per tonne revenue 2011
International [UG]Alrosaover 250
NyurbinskayaAlrosaover 250
Mir [UG]Alrosaover 250
Aikhal [UG]Alrosaover 250
DiavikRio Tinto (NYSE:RIO) /Harry Winstonover 250
JwanengDebswanaover 250
Snap LakeDe Beers100 to 250
Udachny [OP]Alrosa100 to 250
EkatiBHP100 to 250
VictorDe Beers100 to 250
MurowaRio100 to 250
LethlekaneDebswana100 to 250
FissuresPetra Diamonds (OTC:PDMDF)100 to 250
OrapaDebswana100 to 250
VenetiaDe Beers50 to 100
JubileeAlrosa50 to 100
Archangelskaya pipeAlrosa50 to 100
KimberleyDe Beers50 to 100
CullinanPetra50 to 100
VoorspoedDe Beersunder 50

In this article I will take a closer look at the four highest value diamond mines that are listed in a U.S. stock exchange.

1. Rio Tinto is a leading international mining group headquartered in the U.K., combining Rio Tinto plc, a London and New York Stock Exchange listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminum, copper, diamonds, thermal and metallurgical coal, uranium, gold, industrial minerals (borax, titanium dioxide and salt) and iron ore. Activities span the world and are strongly represented in Australia and North America with significant businesses in Asia, Europe, Africa and South America.

Rio Tinto operates three diamond mines, Argyle in Australia (100 per cent interest), Diavik in Canada (60 per cent interest), and Murowa in Zimbabwe (78 per cent interest), as well as Bunder, an advanced diamonds project in India (100 per cent interest).

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Financials

The company reported the first six months financial results on August 8, with the following highlights:

Revenue$25.3 billion
Net income$5.2 billion
Cash$7.3 billion

Outlook

In 2012, Rio Tinto's share of diamond production is expected to be 12.6 million carats.

My analysis

The stock has a $74 price target from the Point and Figure chart. The stock is trading at a P/E ratio of 22.30 and a forward P/E ratio of 6.74. The company has a book value of $30.15 per share and the stock has a 3.31% dividend yield. I believe the stock could reach the $74 price target during the next 12-24 months.

2. Harry Winston Diamond Corporation is a diamond enterprise with premium assets in the mining and retail segments of the diamond industry. Harry Winston supplies rough diamonds to the global market from its 40 percent ownership interest in the Diavik Diamond Mine. The company's luxury brand segment is a premier diamond jeweler and luxury timepiece retailer with salons in key locations, including New York, Paris, London, Beijing, Shanghai, Hong Kong, Singapore, Tokyo and Beverly Hills.

The company focuses on the two most profitable segments of the diamond industry, mining and retailing, in which its expertise creates shareholder value. This unique business model provides key competitive advantages; rough diamond sales and polished diamond purchases provide market intelligence that enhances the company's overall performance.

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Financials

The company reported the second-quarter fiscal 2013, which ended July 31, financial results on September 6, with the following highlights:

Revenue$176.9 million
Net income$4.8 million
Cash$74.6 million

Harry Winston Diamond Limited Partnership's 40% share of Diavik diamond mine production:

Q2/2013
Diamonds recovered (000s carats)716
Grade (carats/tonne)3.34

Outlook

The mood within the diamond market remains cautious but it is hoped that the Hong Kong International Jewellery Show will bring more positive movement in retail diamond demand as the markets restock before the Asian wedding and year-end holiday seasons.

The plan for calendar 2012 foresees Diavik Diamond Mine production remaining at approximately 8 million carats from the mining of 2.0 million tonnes of ore and processing of 2.2 million tonnes of ore.

The company issued an updated life-of-mine plan in August for the Diavik Diamond Mine with a $2.6 billion net asset value on a 100% basis based on reserves and resources.

My analysis

The stock has a $22.5 price target from the Point and Figure chart. The stock is trading at a P/E ratio of 43.33 and a forward P/E ratio of 16.44. The company has a book value of $9.52 per share. I believe the stock could reach the $22.5 price target during the next 12-24 months.

3. BHP Billiton (NYSE:BHP) operates as a diversified natural resources company worldwide. The company engages in the exploration, development, and production of oil and gas; mining and refining of bauxite into alumina, and smelting of alumina into aluminum metal; and mining of copper, silver, lead, zinc, molybdenum, uranium, gold, and diamond, as well as development of potash deposits. Ekati diamond mine is located in Canada's Northwest Territories. The mine is 80 per cent owned by BHP Billiton.

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Financials

The company reported the full fiscal year 2012 financial results with the following highlights:

Revenue$72.7 billion
Net income$15.5 billion
Cash$5.2 billion

The company's diamond production for the quarter ending September 30, was 313,000 carats.

My analysis

The stock has a $86 price target from the Point and Figure chart. The stock is trading at a P/E ratio of 12.26 and a forward P/E ratio of 12.75. The company has a book value of $41.02 per share and the stock has a 3.17% dividend yield. I believe the stock could reach the $86 price target during the next 12-24 months.

4. Petra Diamonds is a leading independent diamond mining group and an increasingly important supplier of rough diamonds to the international market. Petra's objective is to develop a diamond mining group of global significance and the company has grown rapidly in recent years, acquiring five important diamond operations since 2007. In so doing, Petra has compiled one of the world's largest diamond resources of over 300 million carats.

The company offers an exceptional growth profile, with a core objective to increase production from 2.2 million carats in FY 2012 to 5 million carats by FY 2019. The company provides direct exposure to the positive long-term fundamentals for the diamond industry, where demand is forecast to outpace supply, resulting in the emergence of a significant rough diamond supply deficit. Whilst supply is expected to remain constrained, demand growth is being driven by the urbanization trend in emerging markets and the rise of a growing class of consumers in countries such as China and India.

Financials

The company reported the full fiscal year 2012 financial results with the following highlights:

Revenue$316.9 million
Net loss$2.1 million
Cash$47.3 million

The financial results were affected by unrealised foreign exchange losses of $38.6 million and non-recurring transaction costs of $3.1 million.

My analysis

The stock is currently trading near its 52-week lows. The company's fiscal 2013 production target is 2.85 million carats. The stock could be a good pick from the current level.

Source: World's 20 Highest Value Diamond Mines