Natural Diamond Vs Synthetic Diamond

by Raul Sapora

From a scientific perspective, a synthetic diamond has the same chemical composition, the same crystal structure, the same optical and physical properties of a natural diamond. As synthetic diamonds are conceptually identical to natural diamonds, they need to be analyzed and spotted by a gemological laboratory. Synthetic diamond screening is nowadays a major concern of the Jewelry Industry.

Unexpectedly, as far as I am concerned, Ada Diamonds[i], a synthetic diamond distributor, after discovering a few natural diamonds mixed in a synthetic diamonds melee lot, has implemented enhanced screening procedures to further inspect all parcels of melee diamonds to ensure that all diamonds sold are in fact synthetic, not mined and therefore not illicit mined diamonds. Despite it is based on the same principle (synthetic vs natural diamond screening), a whole new and extremely dangerous variable has been imported into the Diamond Trade: protecting synthetic from natural. I believe most of you who read this will smile at this – I did too at a first glance – but it is also easy to realize that a new powerful weapon has been forged and consigned to marketing experts, and if the synthetic diamond industry will have consumers perceive that synthetic diamonds are a better alternative, people will buy them.

The situation is becoming more and more complex. Retailers are in a constant state of great distress: they are uncertain whether they should sell synthetic diamonds or not. On the other end, mining companies are addressing the problem with considerable delay and most probably caught inside the conceptual circle of the same marketing campaign which had decreed their triumph in the past. When Martin Rapaport in his world renowned educated reprimand[ii] to Leonardo di Caprio says that ‘false claims and misleading marketing surrounding the sale of synthetics is having an impact’, I am afraid he forgets to say that diamond itself owes its success to the unrivalled advertising slogan created by Mary Frances Gerety for De Beers in 1948 ‘a Diamond is Forever’, and that claim is disingenuous anyway. De Beers was successful in making diamonds appear rarer than they are, by aggressively restricting the supply of diamonds on the market, and moreover nothing is going to be forever, not even diamonds.

I am a gemologist and Responsible Sourcing Auditor, and those who know me quite well are prepared to hear me pronounce the sentence: “The ethical nature of a gemstone has today as much to do with its social context and its environmental provenance as it has with its optical and chemical properties.” In fact, in my opinion, gemology without Responsible Sourcing is merely a scientific understanding of gemstones, and the world needs much more than this. Gemology, as a matter of fact, is evolving through ethics. Therefore, as a gemologist I have to protect truth, even if truth sometimes can be multifaceted.

Diamond Foundry, a Synthetic Diamond producer who raised a capital of over $100 million from 12 billionaires[iii], including Twitter founder Evan Williams and actor and environmentalist Leonardo DiCaprio, was launched in late 2015, after two years of research and development.” A diamond is a diamond,” says Martin Roscheisen, Diamond Foundry’s founder. “Scientifically it is a tetrahedral carbon allotrope, and it is the same thing whether mined or man-made.”

“Proud to invest in Diamond Foundry, a Company reducing human & environmental toll by sustainably culturing diamonds,” Leonardo di Caprio tweeted.

Apparently, the arguments embraced by synthetic (or lab grown as they like to say) diamonds manufacturers are mainly ethical: to some consumers they seem to be conflict free and socially responsible. That is because synthetic diamond marketers are touting their product to be “conflict-free”, which misleadingly associates all real diamonds with conflict diamonds.

Accusations of exploitation and inhumane working conditions in mines cast a dark shadow over the diamond industry. Mining is also said to be devastating to the environment, due to the amount of energy it requires, the potential for chemical leaks, and the harmful effects that removing large amounts of earth has on local ecosystems[iv]. Some of those arguments are highly deceptive: the world of diamonds, gemstones and jewellery is changing. The legislative landscape, consumer awareness of the problems in the jewellery supply chain and broader civil society groups demanding transparency and disclosure have impacted dramatically on this scenario: nowadays, thanks to Kimberley Process, Responsible Jewelry Council and other initiatives, just a very small fraction of diamonds production is being used to finance wars. Also, it is extremely important to understand that the diamond industry employs an estimated 10 million people around the world directly and indirectly, and also has become the almost entire economy of some specific, otherwise isolated locations, like Botswana and Northern Canada[v]. Another commonly repeated misconception is that diamond mining harms local ecosystems and wildlife. However, diamond mining is perhaps one of the least environmentally destructive forms of mining there is today. Diamond mining uses very few, if any, chemicals, and diamond mines leave a small footprint on local environments compared to other forms of mineral extraction. Most people are unaware of the role diamonds play in bringing real benefits to people in the countries around the world where diamonds are sourced. Nowhere is this more evident than in Africa.

A few facts:

·        An estimated 5 million people have access to appropriate healthcare globally thanks to revenues from diamonds.

·        Diamond revenues enable every child in Botswana to receive free education up to the age of 13.

·        An estimated 10 million people globally are directly or indirectly supported by the diamond industry.

·        The diamond mining industry generates over 40% of Namibia’s annual export earnings.

·        Approximately one million people are employed by the diamond industry in India.

·        The revenue from diamonds is instrumental in the fight against the HIV/AIDS pandemic.

·        An estimated 65% of the world’s diamonds come from African countries.

It is quite evident that synthetic diamonds pose a firm and serious threat to this huge network, while so much has been done and is being done to eradicate unethical implications from the complex jewelry world. As I said already, reactions have been slightly late and perhaps, at least in the early stage, not commensurate to the actual danger.

After almost one century and a half after diamond discovery in South Africa – happened in 1867, when fifteen year old Erasmus Stephanus Jacobs found the Eureka diamond on his father’s farm, on the south bank of the Orange River – and after the end of the De Beers monopoly, seven of the world’s leading diamond companies (De Beers, Alrosa, Dominion Diamond Corporation, Petra Diamonds, Gem Diamonds, Lucara Diamond Corporation, Rio Tinto Diamonds), founded in May 2015, the Diamond Producers Association (DPA): its mission is ‘to protect and promote the integrity and reputation of diamonds, thereby ensuring the sustainability of the diamond industry’[vi].

DPA launched an advertising campaign called “Real is Rare,” that adopts a new verbiage on diamond marketing, in which the abracadabra claim “A Diamond is Forever” has been replaced by a narrative that is totally different from the past. The Diamond Producers Association (DPA) announced at the JCK, Las Vegas a few days ago that their 2017 marketing budget will total US$ 57 million. DPA’s Chairman Stephen Lussier commented: “The Board’s decision is a major turning point for the Diamond Producers Association and the diamond industry. All Board Members are aligned behind the goals and plans of the DPA, which is now fully equipped to fulfil its mission of communicating to next generation consumers about the timeless beauty and emotional value of diamonds. We look forward to working closely with the diamond and jewellery trade and with other industry organisations to build a stronger future for our sector” [vii].

The words pronounced from Lussier sound so far away from the place and time in which De Beers was the guardian of the trade and could steadily increase the price of diamonds, thus ensuring that diamonds were a good investment over time.

Is such a potentially huge advertising campaign enough to react to synthetic diamonds? In my opinion the necessary game changer in this dangerous situation are ethics and Responsible Sourcing practices. The only way is ethics, quoting Stacey Hailes’s speech at Birmingham a few weeks ago. It is of paramount importance for consumers to consider what the Kimberley Process Certification Scheme for Rough Diamonds, the Responsible Jewelry Council, the Signet Responsible Sourcing Program are among others doing. Although we are all working towards the full enforcement of these practices, they already had a significant impact on illicit trade in rough diamonds.

___________________________________________________________________

[i] As reported in ‘Is This Lab-Grown Diamond Company Trolling the Trade?’ by Rob Bates, on JCKonline (June 1, 2017)

[ii] Rapaport, ‘Synthetic Diamond Scam’ April 2016

[iii] ‘Why Leonardo DiCaprio is backing man-made diamonds’ by Sophie Morlin-Yron, CNN money ( August 30, 2016)

[iv] ‘A Lab-Grown Diamond Is Forever’, by Chavie Lieber (June 14, 2016)

[v] ‘The History of Lab Grown Diamonds: Value Proposition’, by Ehud Arye Laniado (June 14, 2017)

[vi] Diamond Producers Association mission statement (www.diamondproducers.com)

[vii] DPA ups its Marketing Budget for 2017 – Allocates US$ 57 Million for the Purpose, TJM (June 6, 2017)

 

Buying and Crying, the Longest Diamond Recession

  
  
Source: Edahn Golan

Author: Edahn Golan

Sometimes, when talking with Sightholders, they have a strong, even passionate opinion about their Sight supplies, prices and the state of the market. This happens at times of instability. At other times, their views are quite moderate, yielding to the market and everything that is happening in it at the moment. However, during a turbulent period, it is very rare when Sightholders remain subdued or accepting of the situation, as it is now.
Currently, it is difficult to assess the size of De Beers’ Sights. The consensus among brokers is that De Beers offered about $600 million worth of rough diamonds, and another $50 million were requested as ex-plan. There was no clear trend to the prices, although many changes were made – both up and down.
Read more at: Edahn Golan website

Diamonds: Driven by market forces for the first time in 100 years

Ce: Resource Investor

Author: Paul Zimnisky

Up until recently the diamond industry had a structural flaw — just one player controlled it. De Beers was the diamond industry, and diamonds were synonymous with De Beers. However, over the last 25 years, a series of events led to the dismantling of the De Beers monopoly. Today, De Beers no longer has complete control of the diamond industry, and for the first time in a century, market forces, not the De Beers monopoly, drive the diamond market.

In the late 1800s after a massive diamond discovery in South Africa, a diamond rush was born, and businessman Cecil Rhodes bought as many diamond mining claims as he could, including farmland owned by the De Beer family. By the turn of the century, Rhodes had accumulated enough properties that his company accounted for the majority of the world’s supply of rough diamonds. He called his company De Beers Consolidated Mines Limited.

As De Beers maintained a hold on the worlds rough diamond supply through the first quarter of the 20th century, financer Ernest Oppenheimer began accumulating shares of De Beers whenever available, and reached a controlling stake of the company by the mid-1920s. Under Oppenheimer’s control, De Beers further expanded into every facet of the diamond industry, intent on monopolizing distribution. De Beers successfully influenced just about all of the world’s rough suppliers to sell production through the De Beers channel, gaining control of the global supply not produced by De Beers mines. The cartel was born, giving Oppenheimer the power to influence diamond supply and thus diamond prices.

The De Beers distribution channel, named the Central Selling Organization or CSO, (later changed to Diamond Trading Co. or DTC), had the power to sell what, when, and where they wanted to. In order to buy from CSO, membership as a “Sightholder” was required, which was completely the discretion of De Beers, as was the quality and price of the product being sold. No negotiation between the CSO and Sightholder occurred, all transactions were take-it-or-leave-it. In order to maintain a stable but rising diamond price, De Beers had the power to stockpile inventory in a weak market or raise the prices charged to Sightholders, and then in an excessively strong price environment (with the potential to damage demand), De Beers had the excess supply on hand to release to the market when needed, repressing disorderly price increases.

To keep the system intact, it was necessary for De Beers to maintain control of the world’s rough diamond supply via purchases through CSO. In the second half of the 20th century, as new world class mines were discovered in Russia, Australia and Canada, it became more and more difficult for De Beers to purchase all global production. The biggest risk to the survival of the cartel was for mines to begin selling directly to the market, thus bypassing De Beers.

Source: WWW International Diamond Consultants Ltd, Economic Times of India, and Authors analysis.

Russia (present day the world’s largest diamond producer by value) began producing diamonds in the mid-twentieth century. At first, the Russians agreed to sell production to De Beers keeping the cartel intact. However, this quickly became extremely costly to De Beers as the Russian mines produced greater quantity and lower quality stones than anticipated. This prompted De Beers to commence the ”Diamond is forever” marketing campaign, transforming the image of diamonds to a proxy for love, expanding demand of lower quality stones to a new middle class American market, in an effort to absorb the new supply. Another challenge emerged in 1963 when Anti-Apartheid legislation restrained the Soviet Union from dealing with a South African company. But the final blow to the arrangement came during the Soviet Union collapse in the 1990s, when political chaos and a weak ruble further separated Russia’s production from De Beers.

Shortly after losing control of Russian supply, the Argyle Mine in Australia, at the time the largest diamond producing mine in the world by volume, broke away from the DeBeers supply chain. Over the next few years, other mines followed suit, as new world-class mines in Canada sold supply independent of De Beers.

The emergence of new supply distributed outside of CSO meant that De Beers, was forced to hold back from selling large portions of its own inventory and to purchase excess supply from its new competitors in the open market, in an effort to maintain control of the market. By the end of the 1990s, De Beers’s market share had fallen from as high as 90% in the 1980s to less than 60%. De Beers no longer had control of the market in 2000, when the company announced a shift in strategic initiative to focus on independent marketing and branding, rather than generic diamond price control.

However, the monopoly officially ended in 2001, when several lawsuits were filed in U.S. courts alleging that De Beers “unlawfully monopolized the supply of diamonds, conspired to fix, raise, and control diamond prices, and issued false and misleading advertising.” After multiple appeals, in 2012 the U.S. Supreme Court denied final petition for review, and a settlement in the amount of $295 million with an agreement to “refrain from engaging in certain conduct that violates federal and state antitrust laws” was approved.

Source: WWW International Diamond Consultants Ltd, Gem Certification & Assurance Lab, Price Scope, and Authors analysis. Price constitutes various qualities of rough and polished diamonds, and shows diamond price deviation from starting basis of 100 beginning in 1987.

Shortly after losing control of Russian supply, the Argyle Mine in Australia, at the time the largest diamond producing mine in the world by volume, broke away from the DeBeers supply chain. Over the next few years, other mines followed suit, as new world-class mines in Canada sold supply independent of De Beers.

The emergence of new supply distributed outside of CSO meant that De Beers, was forced to hold back from selling large portions of its own inventory and to purchase excess supply from its new competitors in the open market, in an effort to maintain control of the market. By the end of the 1990s, De Beers’s market share had fallen from as high as 90% in the 1980s to less than 60%. De Beers no longer had control of the market in 2000, when the company announced a shift in strategic initiative to focus on independent marketing and branding, rather than generic diamond price control.

However, the monopoly officially ended in 2001, when several lawsuits were filed in U.S. courts alleging that De Beers “unlawfully monopolized the supply of diamonds, conspired to fix, raise, and control diamond prices, and issued false and misleading advertising.” After multiple appeals, in 2012 the U.S. Supreme Court denied final petition for review, and a settlement in the amount of $295 million with an agreement to “refrain from engaging in certain conduct that violates federal and state antitrust laws” was approved.

Source: WWW International Diamond Consultants Ltd, Gem Certification & Assurance Lab, Price Scope, and Authors analysis. Price constitutes various qualities of rough and polished diamonds, and shows diamond price deviation from starting basis of 100 beginning in 1987.

The way De Beers did business, which revolved around the central concept of controlling supply in the market, was simply not viable in a more competitive environment, and De Beers could not maintain the monopoly. From 2000 to 2004 diamond prices modestly declined, as the De Beers stockpile was liquidated into new demand coming out of Asia. By 2005, the inventory overhang had been lifted allowing market forces to drive diamond prices for the first time in a century, resulting in unprecedented price volatility. Diamond prices made a new high in 2007, followed by a violent sell off in 2008 and 2009 before rebounding to another new high in the summer of 2011.

With a market share of less than 40%, in 2011 the Oppenheimer family announced a complete exit from De Beers, ending almost a century-long ownership of perhaps the greatest monopoly in history.

About the Author: Paul Zimnisky

Paul Zimnisky, has worked in the financial industry for almost 10 years, primarily as a buy-side equity analyst focused on the metals and mining space, and as an ETF arbitrage trader. Paul currently creates and develops new exchange-traded products. Paul has a finance degree from the University of Maryland.

China demand makes diamond too pricey

Source: The Economic Times

Author: Sutanuka Ghosal

KOLKATA: India’s expanding middle class may now have to spend more to own a piece of diamond-studded jewellery. Prices of smaller diamonds (10 cents and 6 cents) have gone up due to a surge in Chinese demand.

Vipul Shah, chairman, Gem and Jewellery Export Promotion Council, told ET: “Prices of polished small diamonds (10 cents and 6 cents) have gone up 5% as demand for these categories has risen in China, Hong Kong and the other Asia Pacific regions. But demand for larger diamonds, known as sawn diamonds, has been sluggish as the US and Europe, the major consumers, are not purchasing them in big volumes.

Prices of polished diamonds may go up further as demand is increasing in the Asia Pacific region and supplies are not enough to sustain this demand.” The annual Global Diamond Industry Report says global consumption will help the worldwide value of diamond sales surge from £10 billion in 2011 to £17 billion a year in the next seven years. This boom will be fuelled by the rising middle class in India and China.

Demand from these nations is expected to soon surpass the US consumption. Vijay Jain, CEO, Orra, said: “Gold has witnessed a dramatic rise in price. But diamond has not seen such a huge appreciation . Though there is volatility in diamond prices, it is not as significant as gold. Therefore , the price hike in diamond is more acceptable to the consumer as it has been a steady rise.”

Bachhraj Bamalwa, past chairman of All India Gem and Jewellery Trade Federation, said: “Jewellers will now try to offload older stocks of diamond-studded jewellery before they introduce jewellery with new prices. By that time, consumers will get to know that prices have gone up and they will get prepared to shell out more.” Vinod Hayagriv, MD of C Krishniah Chetty and Sons, said: “If demand comes down, prices of diamond will fall. But that is not going to happen in near future.”

Companies are now looking at introducing products that are affordable to customers and yet have the look of an original high-quality diamond. The Orra CEO said the company has launched the Aquila range of diamond studded jewellery that have the look and feel of a one-carat diamond (100 cents make a carat). “Such items are being bought by aspiring middle class youngsters.

The industry will have to come up with innovative products at a time when diamond prices are rising. This has happened in gold too. Most jewellers have come up with lightweight gold jewellery with a heavy look.”

Famous Diamonds: the Graff Pink

Natural pink diamonds are the rarest and most desirable gems in the world.

At 23.88 carats the Graff Pink with its rectangular step cut, delicate round corners and perfectly mesmerising pink hue is the most beautiful internally flawless vivid pink diamond in the world.

The Graff Pink, a rare 24.78 carat pink diamond, once owned by American celebrity jeweller Harry Winston, has been described as “one of the greatest diamonds ever discovered”. The diamond, mounted in a ring, was sold by Sotheby’s auctioneers in Geneva, Switzerland on 16 November 2010. Before its sale, the stone was expected to enter the list of the top ten most expensive diamonds in the world; on selling for US $46 million (£29 million) it became the most expensive single jewel ever sold at auction.

Even if Mr. Graff was impressed by the stone’s both exceptional weight and vivid saturation of colour, he was aware of a greater potential laying within the stone and he had it recut.

The gem was then sent to the Gemological Institute of America and classified by GIA as “fancy intense pink”—a high colour rating for pink diamonds—and has been assessed as Diamond type IIa, placing it in the top two per cent of the world’s diamonds.

The early history of the diamond is not clear. It was sold in the 1950s by American celebrity jeweller Harry Winston to a private collector, who owned it up until 2010, when it was sold at auction. Despite its rarity, the diamond was unnamed for all this time.

The diamond is emerald cut with rounded corners, and is mounted on a platinum ring with two flanking shield-shaped diamonds.

“It is the most fabulous diamond I’ve seen in my career,” Laurence Graff said in a statement issued by Sotheby’s.

In celebration of the stone’s unique beauty, Laurence Graff renamed the diamond simply ‘The Graff Pink’ – the most fabulous pink diamond in the world.

For more information: visit Graff’s site

Zimbabwe and De Beers’ decline

Source: New Zimbabwe

Author: Tafadzwa Musarara

OBERT Mpofu has become the first and only African mines minister to take De Beers head on, and successfully inflict collateral damage on the century-old world diamond cartel leader.
Mpofu has forced the Oppenheimer dynasty to make a hasty exit from the conglomerate which they had ruled as their own family fiefdom for more than 70 years.
This is a big feat for a mines minister of a third world country to fight a worldwide establishment with a foundation deeply rooted in the Scramble for Africa. Founded in 1888 by Cecil John Rhodes, De Beers’s diverse business operations include diamond extracting, trading, cutting and polishing, jewellery manufacturing and retail.
The former diamond-mining giant has a record of providing massive material and financial assistance to former repressive colonial regimes in countries where it operated, including Zimbabwe, Botswana, Namibia and South Africa. De Beers grew phenomenally during the apartheid era when it bought several businesses that were closing in protest against the repressive political system in South Africa. This has resulted in De Beers owning at least 40% of major entities listed on the Johannesburg Stock Exchange. During apartheid, De Beers crafted all statutes and policies on diamond trade in South Africa and benefitted from black cheap labour.

But in Zimbabwe, after decades of looting, De Beers is well and truly in retreat, soon to be a footnote in history.

“De Beers stole our diamonds,” bellowed Mpofu during his address to the Dubai Diamond Conference last month.
“We had De Beers in Zimbabwe exploring in Marange for 15 years. They exported 100,000 metric tonnes of diamond ore to South Africa for what they claimed was to carry out laboratory tests. No results of that exercise were revealed to the government of Zimbabwe as required by law. Soon after their departure, it took villagers living in the same particular area few days to start mining diamonds.”

And speaking to members of African Diamond Producers in Jerusalem on the sidelines of the 2010 Kimberly Plenary, Mpofu said: “Fellow Africans, our problems getting KP certification [to export diamonds] have serious underlying currencies.

“Apart from our bilateral arguments with Britain, we see that De Beers is behind the funding of this hostile civic society. We have a history with De Beers.

Mpofu had to contend with and defeat the De Beers machinery which could not fathom that for the first time in its century-old cartel, it had failed to lay its dirty hands on the world biggest and most lucrative diamond find.

The KP-supervised diamond sales of 2009 and 2011 impacted negatively on De Beers’ share price leading to the ousting of its chairman, Nick Oppenheimer, as other shareholders felt he had failed to stop Mpofu’s growing popularity in KP and the massive diamond sales from Marange which were now deflating world diamond prices.

Oppenheimer’s imperial management style failed to conquer the Marange find as the Zimbabwe phenomenon triggered the emergence of new entrants, mainly from India, who could not enter the diamond industry previously due to De Beers’ imposed restrictive measures.

The movie Blood Diamonds tremendouslyexposed De Beers’ dealing in diamonds mined from rebel-controlled areas. However, the threat made by Mpofu to take De Beers has worsened its integrity woes.

The battle for the Marange diamonds Kimberly Process (KP) certification had serious invisible forces at play, which informed the resistance and the demonisation of these mining operations. The quantum of financial resources deployed by De Beers to civic society organisations to carry “oversight” on Marange is the highest given in the history of the KP.

Mpofu’s three-year fight for the KP certification of these mines and re-instatement of his country as a full KP member did not only re-shape the jurisprudence of this diamond trade controlling body but put Zimbabwe on the international map.

A recent report, South Africa’s De Beers: The most unethical corporation, authored by the St Antoninus Institute, a Catholic business think tank, described De Beers as the most manipulative corporation in the world. The report adds: “DeBeers is guilty of more than all that. It is an integral part of the old-boy network instituted by the British and encompassing different US operations and interests for the purpose of controlling international governments and populations for the good and in the interest of a number of corporations, especially banks.

“The American version of this international network is called the Council of Foreign Relations (CFR). Anyone drawing attention to the dark side of the objectives of this outfit is branded and derided as giving credence to the ‘conspiracy theory’.

“DeBeers supports CFR and its other international version as they are means to protect the integrity of its cartel. The other major members of CFR, the banks, support the group because it allows them to introduce their people in all different types of governments and political parties so that these government will never consider commandeering or nationalising the assets of the banks (bankers are paranoid about collaterals but how do you enforce a collateral against a sovereign government?).

“Through CFR, De Beers undermines the political process of several countries, including the US.”
The fall of De Beers in Zimbabwe and the continued fight by Mpofu brings relief to many other African countries who could not stop the Wild West behaviour in their areas of jurisdiction.

Since the discovery of diamonds in the Kalahari desert in 1969 by De Beers, the Bushman – the indigenes of this area – have never known any peace as they face displacement any time. It is expected, therefore, that Batswana activists are going to ride on Mpofu’s victory as they now realise that zizi harina nyanga.

Tafadzwa Musarara is the chairman of Resource Exploitation Watch

De Beers’ rough diamond sales drop 15% in 2012

Courtesy of Diamond World

Forevermark expands its reach by 40%

De Beers noted that in 2012, there was a 16 percent drop in its total sales to US$6.1 billion, while rough diamond sales decreased by 15 percent to US$5.5 billion. The company stated that its rough diamond sales took a slide down mainly owing to the diminished demand, changing product requirements from Sightholders, and reduced availability of some goods. Sales of rough diamonds via De Beers’ auction platform decreased to US$356 million in 2012 which the company attributed to subdued buyer activity.

Also, diamond jewellery demand from US, China and Japan did see an increase, although at a slower pace than in 2011.

Rough diamond prices dropped 12 percent in the years 2012. Also as the polished prices declined especially towards the third quarter of the year and with the increased stock levels at the cutting centre stock and tightening liquidity in the midstream resulted in a rough there was a correction in the rough diamond prices in the third quarter and by the year end, the rough prices stabilized, reflecting a modest improvement in consumer demand during the holiday sales season in most major diamond jewellery markets.

The Forevermark brand of the De Beers group saw an increase in its reach, as stores licenced to retail Forevermark diamonds grew by 40 percent to more than 900 independent jewellers worldwide. It grew in core markets of China, Japan, India and the US, and was launched in two new licensee markets – Canada and the UAE.

The year’s diamond production at De Beers totalled 27.9 million carats (2011: 31.3 million carats). Also, Anglo American plc completed its acquisition of a further 40 percent interest in De Beers, bringing total shareholding to 85 percent. There was free cash flow of $697 million, down 15 percent (on y-o-y basis) and debt was reduced by 61 percent to $722 million, excluding ‎shareholder loans. ‎De Beers is maintaining an outlook of moderate growth in diamond jewellery demand in 2013, with a more positive picture emerging from China and India compared to 2012. It noted that as the diamond manufacturing ‎sector is currently holding high inventory levels, particularly in the high end goods, the challenges in liquidity continue.

Diamond prices strong at Sotheby’s NY sale

Courtesy of The National Jeweler

New York — Sotheby’s sale of Important Jewels here on Feb. 7 achieved a total of $10.5 million, marking the third consecutive record total for a February sale of jewelry for the auction house.
A platinum ring by Tiffany & Co. with a 6.46-carat, E color round diamond sold for $560,500, or $86,765 per carat, to an anonymous bidder. The piece had a pre-sale high estimate of $150,000.
A platinum and diamond ring with a 0.51-carat round fancy purplish pink diamond, also by Tiffany & Co., sold for $338,500.
A platinum and diamond bow brooch by Van Cleef & Arpels realized $332,500 after a pre-sale high estimate of $100,000.
“We are very pleased to have achieved another top result for our February sales in New York. (The) auction demonstrated the market’s continued appetite for exceptional diamonds,” said Gary Schuler, head of Sotheby’s jewelry department in New York.

Company drops attempt to block Ekati sale

Courtesy of National Jeweler

Toronto –The $500 million deal that would transfer ownership of Canada’s Ekati Diamond Mine from BHP Billiton to Harry Winston Diamond Corp. is free to proceed, Harry Winston announced Monday.

According to a news release from Toronto-based Harry Winston, C. Fipke Holdings Ltd. discontinued the lawsuit filed just a few weeks ago against Harry Winston, BHP Billiton Canada Ltd., Stuart Blusson and Archon Minerals that attempted to block the sale of the mine.

Harry Winston and BHP Billiton announced in November that BHP Billiton, which had expressed its desire to exit the diamond business, would be selling its Canadian diamond mining operations as well as its sorting and sales facilities in Yellowknife, Northwest Territories and Antwerp to Harry Winston in a deal worth half a billion dollars.

BHP Billiton was under contract to offer its minority joint venture partners the right of first refusal on its mining operations before selling them to Harry Winston. One of those partners, C. Fipke Holdings Ltd., objected to the sale. (Blusson and Archon Minerals are the other minority joint venture partners.)

Fipke alleged that Harry Winston’s debt financing arrangements for the acquisition interfered with its ability to arrange financing and wanted a court order prohibiting the purchase unless and until BHP Billiton gave it a revised offer.

The dropping of the lawsuit clears the way for the deal to proceed, though it still is subject to satisfaction of closing conditions, including regulatory approvals. A Harry Winston spokesperson told National Jeweler in mid-January that they expect the sale to close in two to three months’ time.

Harry Winston is a company in the midst of major changes as it transitions from being a diamond miner and retailer into solely a mining company.

In addition to its acquisition of BHP Billiton’s diamond business, the company is rumored to be a frontrunner to buy partner Rio Tinto out of the Diavik Diamond Mine. The two companies currently operate Diavik as a joint venture that is 60 percent owned by Rio Tinto, with remaining 40 percent owned by Harry Winston.

Harry Winston also recently announced a deal to sell its retail division to the Swatch Group in a $1 billion deal.

Wikileaks say Mugabe gaining from “blood” diamonds

We publish courtesy of National Jeweler

Washington, D.C. — Confidential U.S. government documents recently leaked through controversial news source WikiLeaks show that U.S. diplomats suspected Zimbabwe’s president, his family and top associates were profiting from the sale of “blood” diamonds from the nation’s controversial Marange fields.

According to cables released by WikiLeaks and reported by United Press International (UPI), sources in Zimbabwe told the United States that Gideon Gono, head of Zimbabwe’s central bank, made thousands of dollars a month selling diamonds from Marange and funneled the money to Robert Mugabe, his wife, his sister and top members of the Zanu-PF party. Diamond panners in the area were attacked with dogs and gunned down from helicopters, with a 2008 cable released by WikiLeaks titled, “Regime Elites Looting Deadly Diamond Fields.”

A cable also stated that, “In a country filled with corrupt schemes, the diamond business in Zimbabwe is one of the dirtiest.”

Trade in rough diamonds from the Marange fields technically remains suspended as the Zimbabwean government and members of the Kimberley Process (KP), the body charged with stemming the flow of “blood” or “conflict” diamonds into the industry, try to hammer out an agreement for trade from the area to resume.

Australian Julian Assange launched WikiLeaks, a non-profit media organization, in 2007. Since late November, the site has been publishing thousands of confidential U.S. diplomatic cables that have embarrassed U.S. officials and led to a government crackdown on the site.

Site founder Assange is in police custody in Britain after Sweden issued a warrant for his arrest in connection with sex crimes in that country. He has denied the allegations.

On Monday, Reuters reported that Assange’s former deputy, Daniel Domscheit-Berg, was starting another WikiLeaks rival site called OpenLeaks.org. The site is not yet operational.