A new report from IBISWorld has highlighted a predicted boom in Australian diamond and gemstone mining in 2014, becoming the largest growth industry in the country.

Its study into the top five industry set “to fly and fall” in 2014 placed diamond mining at the top of the success list, predicting a 24% growth in revenues year on year, increasing from $663 million in 2013 to $821 million in 2014.

It explained that “growth will be underpinned by output from [Rio Tinto’s] underground Argyle diamond mine” as it moves from development into production.

IBISWorld general manager (Australia), Karen Dobie, said “Australia’s diamond and gemstone production and exports are expected to increase significantly over the course of 2014”.

"This reflects fresh production capacity coming inline and strong demand from South-East Asia due to rising media incomes.”

"High-quality stones as a share of total output is expected to increase, which will have a positive impact on total industry revenue,” Dobie said.

Rio Tinto launched a new diamond marketing strategy in China late last year to take advantage of this growing diamond.

Managing director of Rio Tinto’s Diamond business, Jean-Marc Lieberherr, said the next phase of the company’s China marketing strategy is set to take advantage of increasing demand for diamond jewellery.

"Rio Tinto Diamonds initially launched its China strategy in 2010 at Shanghai Work Expo. Since that time we have continued to focus on developing together with our trade and retail partners the diamond fashion jewellery market in China, creating opportunities for diamond purchasing beyond the solitaire engagement ring,” Lieberherr explained.

This is a turnaround for an industry that was facing serious job cuts in Australia, with Rio Tinto only last year looking at a divestment of Argyle as part of the company’s wider strategy to get out of diamonds.

However the report was not all positive, listing mining exploration as one of the industries set for a decline in 2014.

This is no surprise for an industry that has already seen global exploration budgets take a massive hit. Global non-ferrous metal exploration budgets have plummeted almost 30 per cent this year, new research suggests.

SNL Metal Economics Group’s Corporate Exploration Strategies surveyed almost 3500 mining companies around the world. The group found total non-ferrous exploration budgets fell to $US 15.2 billion.

Major miners recorded a 24 per cent drop in exploration spend, whilst juniors took a bigger hit, with exploration budgets falling 39 per cent over 2012. In Queensland alone explorers’ market capitalisation fell 31% in 2012-13 to $732 million.

Access to equity capital was listed as a significant problem with companies exploring in Queensland announcing $63 million in capital raisings in 2012-13, down 76 per cent in comparison to 2011-12.

Nationally, the amount of raisings was down 60 per cent in 2012-13 from $853 million to $342 million. The latest IBISWorld report predicts the sector will continue to decline, falling another 7.5% over 2014.

"These adverse global conditions have suppressed world prices for the major commodity groups upon which the exploration industry depends,” Dobie said. "The fall in investment in exploration also follows established miners shifting their focus from exploration to production.”