Thursday, December 30, 2010

Human Rights Watch Says Zimbabwe's Marange Diamonds Funding Mugabe Party

Human Rights Watch in 2009 issued a report saying serious human rights abuses, including killings by the military of freelance diamond panners, had taken place in the Marange field, in addition to smuggling

Human Rights Watch has issued a report accusing Zimbabwean President Robert Mugabe's long-ruling ZANU-PF party of tapping proceeds from the illicit sale of diamonds from the Marange field to fund its campaign for anticipated 2011 elections.

Human Rights Watch United Kingdom Director Tom Porteous said his s investigations showed “revenue from the mines is serving to prop up Mr. Mugabe and his cronies.”

He said Human Rights Watch is concerned such funds will also be used to support political violence by ZANU-PF and intimidate Mugabe opponents.

ZANU-PF spokesman Rugare Gumbo dismissed the charges as nonsense.

Human Rights Watch in 2009 issued a report saying serious human rights abuses, including killings by the military of freelance diamond panners, had taken place in the Marange field, while diamond smuggling through Mozambique was rampant.

Human Rights Watch Senior African Researcher Tiseke Kasambala told VOA Studio 7 reporter Jonga Kandemiiri that the unity government should take steps to prevent further abuse by ZANU-PF of the rich diamond resource in eastern Manicaland province.

In a related development, Israeli authorities have arrested two men on charges they tried to smuggle Marange diamonds into the country. Kimberley Process Certification Scheme Acting Spokesman Stokamer Amir said law enforcement agencies arrested David Vardi and Gilad Halachmi at the Tel Aviv airport on Wednesday, December 23.

Amir said the two were accused of trying to smuggle diamonds worth more than US$200,000 into the country. Vardi, a diamond trader registered under the Israeli Diamond Exchange, has been expelled from that organization.

Amir said the Kimberley Process is monitoring the latest developments in the case and vowed that the two would face the full force of the law.

South African-based political and economic commentator Walter Nsununguli Mbongolwane told VOA Studio 7 reporter Gibbs Dube that the arrest of the two Israelis could lead to the discovery of other shady Marange diamond deals.

Wednesday, December 29, 2010

Buoyant gold price squeezes diamond content in jewellery

The jewellery industry could only watch as the price of gold rose throughout 2010. For manufacturers, there was an urgent need to reduce both gold and diamond content in order to maintain price points.

Although for much of the year the financial columns have busied themselves with identifying the precise reasons for the sharp rise in the price of gold, the jewellery industry has been dealing with the phenomenon’s impact. The increase in the cost of gold has meant that many jewellery manufacturers have reduced either the amount of gold or diamonds, or both, they use in their products, in a bid to maintain price points.

That has been all the more the case in the European and American markets where economic recovery remains fragile and customer confidence uneven. Retailers have faced a tough battle of margins as they attempt to attract custom by keeping prices down while paying higher prices for goods. The price of gold has risen around 28 percent this year to around $1,340.

What does this mean for diamonds? In many cases jewellery manufacturers have pushed back downstream to try and secure lower prices for diamonds, although it is not clear how successful they have been. They have also changed buying patterns with a trend to smaller diamonds.

“We have seen clients putting in demands for smaller diamonds of lower qualities,” said one diamond company executive. “That is clearly a result of the need to cut costs. It is obvious that rising gold prices are forcing a change in the composition of jewellery. We have seen some downsizing in the diamonds being requested.”

Meanwhile, Dirk De Nys, of DTC sightholder the IGC Group, said: "First of all, it is very frustrating to see the sharp rise in the price of gold when in the diamond industry we are struggling to push diamond prices higher. We have seen in the U.S. market that an impact of the rising price of gold is that jewellery manufacturers have moved to using less gold and using more silver.

“As far as we are concerned, 40 percent of our diamond production goes to jewellery brands and these are large companies that are not going to cut back on either gold or diamond content. They are able to pass the rises on to their customers. It is crucial for them that they stay with their brand identity so they are not cutting back the quantity or quality of their products,” De Nys said.

Another consequence of gold’s rise is a noticeable move to silver jewellery in the U.S. and European markets. Indeed, silver has marked a sixth straight quarterly advance, the best run since the beginning of 1980. While all eyes have been fixed on the rise in the price of gold, silver has risen much higher, up around 75 percent this year to more than $29 per ounce.

Although consumers have not suddenly lost their liking for jewellery, they are content to wear less expensive items and to move away from gold. In this respect, the impact of the rising price of gold and the move to jewellery at a price that fits the budget of most buyers during the economic downturn that is still plaguing many parts of Europe and the United States can be seen in the financial results of jewellery maker Pandora. The producer of low-cost silver and gold bracelets and charms has seen soaring sales in the United States and Europe and a much less spectacular performance in the Asia region – which is a reversal of what is happening in the diamond world.

Pandora reported an almost doubling of sales in the Americas region in the third quarter of this year, up 93 percent. Meanwhile, in Europe, the expansion of sales was even more dramatic, jumping 191.2 percent. The continent accounts for 48.4 percent of the firm’s global sales. In the Asia Pacific region, where the impact of the recession has been considerably lower and which emerged from the slowdown well before Western states, Pandora saw its sales up by 30.3 percent, while sales in the region were responsible for only 11.1 percent of total worldwide sales.

But not only is the rising price of gold reducing diamond content in jewellery, it is also reducing the gold content. In the United States, purchases of gold jewellery are estimated to have fallen by around a third by volume in the past three years, and in Europe manufacturers are mixing gold with steel and ceramics to reduce the gold content and keep prices down. In India, where gold jewellery has been a must-buy for centuries, hollow bangles are being made to look like solid gold.

The Richline Group, an American manufacturer of fine jewellery, now sees 40 percent of its sales being in gold compared with more than 70 percent in 2006. At Signet Jewelers Ltd., one of the largest jewellery retailers with more than 1,300 shops in the United States and about 550 in the United Kingdom, more silver, tungsten and titanium jewellery is being offered for sale. And even Italy’s Bulgari SpA, the world’s third-largest jeweller, has increased the range of rings in its B.Zero 1 line, which were solid gold in 2000 and now mix ceramics with the yellow metal.

“We are focusing more than in the past on the combination of different materials,” Bulgari CEO Francesco Trapani told the media. “This is an interesting way to introduce something more appealing, more exciting, to the final client, a way of proposing things that can be less expensive.”

Could the rising price of gold and also platinum be filling the war chests of producers, giving them the power to launch acquisitions? At the end of a year in which gold, platinum and other commodities have moved inexorably higher, a media report in mid-December suggested that mining giant Anglo-American, which owns 45 percent of De Beers, may be preparing a bid to buy the Oppenheimer family’s 40 percent stake in the diamond miner.

A further side-effect of the rise in the price of gold has been the growth of companies offering cash for gold. Advertisements from companies offering to buy gold jewellery on the spot for immediate cash have sprung up on roadsides, in cities and in newspapers and magazines across the world. Although the recession officially ended in the United States more than a year ago, continuing high levels of unemployment mean many people are keen to raise money by selling off jewellery.

Gold has risen progressively higher this year due to range of factors. These include investor concern at the huge amount of cash being printed by the U.S. Federal Reserve Bank and fears that the U.S. economy will be buffeted by high inflation. Other investors bought gold this year on worries about ongoing financial turbulence in Europe, which started in Greece, and concern the global recovery may slow.

Although the price of gold has slipped back on several occasions during 2010, these dips only served as buying opportunities for investors who quickly sent its price back up. Although gold did not achieve the $1,500 per ounce level predicted by some analysts, many investment houses say there is strong enough demand to prevent a long-term fall in the price.

The global gold market has seen a transformation since the year 2000 when gold was selling for around $250 an ounce. For many years, jewellery had been the backbone of gold consumption, but, a sharp rise in demand from investors changed the picture. The impact of investors, especially buyers of physical gold through bullion-backed exchange traded funds, has provided a critical shift in the gold market.

The World Gold Council (WGC) says that jewellery accounts for around 70 percent of worldwide gold demand, whereas investment demand is less than 20 percent.

UBS, the Swiss bank, in its annual poll of central bank and sovereign wealth funds, found nearly a quarter of central banks believed gold would become the most important reserve asset in the next 25 years. Analysts also said Asia’s central banks, from India to the Philippines, were the most likely to buy gold. They added that central banks and, crucially, sovereign wealth funds in the Middle East were also keen on the metal, although some bankers pointed out that sovereign wealth funds were more likely to be tactical buyers, seeking price appreciation and profit-taking, rather than being strategic buyers seeking diversification and long-term security.

The buying spree meant that investors last year purchased more gold than buyers of jewellery for the first time in three decades, highlighting the growing impact of speculators on bullion prices. However, some analysts believe the fact that investors are buying more gold than the jewellery industry is a sign of a bubble.

GFMS, the consultancy that compiles benchmark supply-and-demand data on the precious metal, said earlier this year that investment demand doubled to 1,820 tonnes in 2009, while jewellery purchases fell by 23 percent to 1,687 tonnes, a 21-year low. Philip Klapwijk, executive chairman of GFMS, earlier this year warned that investors were likely to buy more gold again this year, but added that the bullion market could become vulnerable to a correction over the medium term if investors turned to other asset classes.

If the bullion market corrects, an upward shift in diamond content in jewellery is likely. What is certain is that, one way or the other, the price of gold will remain a significant factor in the volume and quality of diamonds being bought and sold.

Thursday, December 23, 2010

UAE joins ban on Zimbabwe’s blood diamonds

The UAE has joined an international ban on the trade of ‘blood’ diamonds from the Marange fields in Zimbabwe, Dubai Multi Commodities Centre said.

The Arab state signed the UN-backed Kimberly Process, which seeks to control the trade in rough diamonds and prevent their use to finance conflict. Other signatories include the UK, US, India and Australia

Marange, in eastern Zimbabwe, contains the largest-known concentration of diamonds in the world. The field was seized by the Mugabe government in 2006 from the mining venture African Consolidation Resources.

A survey report for De Beers indicated that the Marange fields have a ratio of more than 1,000 carat per hundred tons, eight times higher than peers.

Profits from Marange’s smuggled diamonds have since been linked with human rights abuses and violence, with reports suggesting Zimbabwe President Robert Mugabe has profited from the illegal trade.

A cable from the US Embassy in Zimbabwe leaked by the website Wikileaks earlier this month alleged much of the trade passed through the Gulf.

In a statement, the DMCC said diamonds from Marange would no longer be permitted.

“We can confirm that the UAE KP office is in full compliance. The notice issued states that the ban will remain in place until further instruction from KP.”

Wednesday, December 22, 2010

GIA Lab Alert Identifies Surge in HPHT-Treated Submissions

Vast Majority of Diamonds Lacked Full Disclosure:

The Gemological Institute of America (GIA) Laboratory recently reported that a significant number of large high pressure/high temperature (HPHT) treated-color diamonds were submitted for grading. Submissions have ranged from 3-carat to nearly 20-carat stones and the vast majority of these diamonds were submitted without full disclosure. The color grades ranged from “D” to “J”, but most were “G” or better combined with high clarities.

As already noted in GIA's December issue of Gems & Gemology’s G&G eBrief, some of the diamonds had flat graphite inclusions with tension “halos” surrounding them. This type of inclusion suggests that the diamond has been processed by HPHT annealing.

“The range of diamonds being subjected to the treatment has also expanded,” said Tom Moses, senior vice president of the GIA Laboratory and Research. “We are confident that we can identify virtually all these treated diamonds as a result of our extensive research in this area, which is one of the most important initiatives at GIA. However, we do not know if this recent surge in treated stones represents a new source or an attempt by some clients to ‘test the systems’ at GIA.”

According to Moses, GIA is contacting the clients both to learn the source of the treated diamonds and to remind them that the failure to disclose treatment at all stages of the pipeline is unacceptable. In addition, GIA is reviewing each transaction to determine whether it’s appropriate to turn over relevant information to the trade organizations and law enforcement bodies.

“GIA’s mission is to protect the public trust in gems and jewelry,” added Moses. “We take this role very seriously. GIA will not tolerate the intentional failure of its clients to appropriately disclose gemstone treatments.”

By Jeff Miller

Head of Angola’s Endiama says diamond prices back to pre-crisis levels

Angolan National Diamond Company (Endiama) succeeded this year in achieving prices for diamonds that were seen before the world financial crisis, said board chairman, Carlos Sumbula.

“We have had problems, because the price of diamonds went down following the financial crisis,” he said in comments cited by the Angola press Agency. “Our first action was to tackle the price issue, since it worried us the most.

“We’ve established strategies that allowed us to make the prices go up. Currently, the price of diamonds has reached the level it was before the crisis,” he said.

As a result of higher revenues, the company is now able to resume the investments it was making before the crisis, and to restart operations at mines.

Renewed confidence in diamond price prompted the government to approve seven new projects, he said.

“At this moment the risk is gone, the product has a stable price, so this puts the company in condition to become involved in projects, like the building of houses and clinics in a sustainable way” he said.

Tuesday, December 21, 2010

Japanese scientists create world's hardest diamond

The cylindrical-shaped diamond was synthesised by a team of researchers at Ehime University.

The diamond - called the Hime, Japanese for princess - was created as part of a collaboration between scientists and Sumitomo Electric Industries, which hopes to start selling the diamonds as early as next year.

Hailed as the hardest artificial diamond on the world, it is significantly stronger than normal diamonds enabling it to be used in an array of industrial activities, according to its creator Tetsuo Irifune.

"A large Hime diamond is useful for experiments to study the high- pressure deep interior of the Earth," he told Kyodo News. "Also, as a product for industrial use its lifetime is several times longer than that of an ordinary diamond."

The newly unveiled diamond is a more sophisticated and bigger version of a similar diamond the same scientists first synthesised in 2003.

Following a series of experiments conducted since March last year using ultra-high pressure synthesising machinery, scientists have been able to craft the Hime, which measures 1cm in length and diameter.

Diamonds are the hardest know natural occurring material and are prized for industrial purposes.

Due to their hardness and head conductivity, they are commonly used for industrial cutting in devices such as diamond-topped drill parts and saws as well as being mixed into a powder or paste for polishing.

An estimated 80 per cent of mined diamonds deemed unsuitable as gemstones are employed in an industrial context.

Danielle Demetriou in Tokyo

Sunday, December 19, 2010

Anglo American mulls plan to control De Beers

ANGLO AMERICAN is weighing up a multi-billion-dollar plan to take control of De Beers, the world's largest diamond company.

The plan involves buying out South Africa's Oppenheimer family.

Big institutional shareholders in Anglo, a mining giant listed in London and South Africa, are pushing its management to "tidy up" its investment in De Beers. Anglo owns 40 per cent, the government of Botswana 15 per cent and the Oppenheimers 45 per cent.

Financial sources said that while a spin-off of De Beers had been considered, it was more likely that Anglo would buy out the family and make De Beers part of its core operations.

The Oppenheimer stake is difficult to value, but it could cost Anglo at least ₤2 billion ($3.14bn).

"Shareholders aren't happy with the minority investment. They want clarity either way, and the view of the directors is a positive one: that they would be interested in taking control," one banking source said.

If the Anglo board goes ahead with the plan, it would sever a long association between the Oppenheimer family and the two companies.

De Beers was founded in 1880 by Cecil Rhodes, the English-born mining magnate and politician who founded Rhodesia, now Zimbabwe. Rhodes and De Beers made millions from South Africa's diamond mines.

Sir Ernest Oppenheimer set up Anglo American in 1917 with backing from JP Morgan, the American tycoon, and seized control of De Beers in 1927. Anglo later became a quoted company and one of the world's biggest players in coal, copper and platinum.

De Beers has stayed private, and is managed by the Oppenheimer family. Nicky Oppenheimer, De Beers' chairman and a director of Anglo, is Sir Ernest's grandson.

The Oppenheimers, whose wealth is estimated at about ₤3bn, are long-term investors in Anglo. However, last week the family sold shares in the miner, taking their stake below 2 per cent for the first time.

De Beers had a tough recession as consumers shied away from luxury goods. Last year it was forced to ask shareholders to stump up $US1bn ($1.01bn) to refinance the group.

Trading bounced back this year. In July the company said first-half profits were $US255m. It also said Gareth Penny, the long-serving chief executive, would step down.

Putting a value on the Oppenheimers' stake is difficult. The family shares are held through a group called Central Holdings, which owns part of De Beers SA, registered in Luxembourg.

Bankers say that based on recent profits and the group's leading position in world diamonds, the stake may be worth between $US3bn and $US5bn.

Thursday, December 16, 2010

Grace Mugabe sues Zimbabwe newspaper over Wikileaks diamond story

First lady files $15m lawsuit against paper for reporting embassy cables alleging links to illegal diamond trade
Grace Mugabe is suing a Zimbabwean newspaper for $15m (£9.5m) for reporting allegations released by Wikileaks that she had made "tremendous" profits in the illicit diamond trade, according to state media.

The first lady launched a defamation suit against the Standard newspaper in the high court in Harare yesterday. The offending article quoted extensively from a US embassy cable that alleged Mrs Mugabe was among a group of elite Zimbabweans making "several hundred thousand dollars a month" from the sale of illegal stones mined in the Marange district – scene of a frenzied diamond rush in recent years.

The state-owned Herald newspaper said the claims made against the wife of President Robert Mugabe were "false, scandalous, malicious and bent on damaging her reputation". Court papers said the first lady, who is known for her enthusiastic shopping trips abroad, was "well regarded internationally".

"Further, she is the wife of his excellency the president of Zimbabwe. The imputation of such conduct on a person of such high standing, the mother of the nation, is to lower the respect with which she is held by all right-thinking persons, to a point of disappearance."

In the cable released by Wikileaks, US ambassador James McGee described a meeting between one of his political officers and the representative of a mining company that had its Chiadzwa diamond claim in the Marange district of eastern Zimbabwe revoked by the government. The mining company official was reported to have said that "well-connected elites are generating millions of dollars in personal income by hiring teams of diggers to hand-extract diamonds" from Chiadzwa, before reselling the stones to shady foreign buyers.

From 2006, thousands of illegal miners swarmed to the diamond fields, among the world's richest finds in recent times, and initially sold their stones to the government. The military soon moved in, forcing people to work for them and later firing at groups of diggers from helicopter gunships in an effort to control the mining. There were also numerous reports of people close to the Mugabe government profiting greatly from the trade at the expense of the state, which was suffering grave foreign currency shortages at the time.

Monday, December 13, 2010

President Khama, of diamond rich Botswana in racist outburst against Kalahari Bushmen

In an astonishing outburst, Botswana’s president has today described the Kalahari Bushmen as ‘primeval’, ‘primitive’ and ‘backward’, says Survival.

Speaking at the country’s largest diamond mine, President Khama accused the Bushmen of living a ‘life of backwardness’ ‘a primitive life of deprivation co-existing alongside wild animals’, and ‘a primeval life of a bye [sic] gone era of hardship and indignity’.

Khama also accused Survival of ‘embarking upon a campaign of lies and misinformation’, calling the tribal rights organization ‘modern day highway robbers’. His comments came in response to Survival’s call for a boycott of Botswana tourism and diamonds over the government’s treatment of the Bushmen. President Khama is a board member of US organization Conservation International.

In 2002, while Khama was vice-president, the Botswana government forcibly evicted the Bushmen from their ancestral lands; an act that was later declared unlawful and unconstitutional by Botswana’s High Court, which also ruled that the Bushmen have the right to live on their lands.

Despite the ruling, Khama’s government has continued to prevent the Bushmen from living on their lands. It has banned them from accessing a well, which they rely on for water, and from hunting for food. At the same time, it has drilled new wells for wildlife and allowed Wilderness Safaris to erect a luxury tourist lodge with swimming pool on Bushman land. Over 25,000 people across the world have signed Survival’s petition calling on Wilderness Safaris to move its lodge off Bushman land.

While the Bushmen have turned to litigation to gain access to their well, the government is in negotiations with Gem Diamonds to construct a diamond mine on Bushman land.

Khama has previously referred to the Bushmen as ‘an archaic fantasy’, a view that has been echoed by members of his cabinet. Last month, speaking to the BBC, Botswana’s minister of environment, wildlife and tourism said he didn’t believe ‘you would want to see your own kind living in the dark ages in the middle of nowhere as a choice, when you know that the world has moved forward and has become so technological’. The vice-president has also been quoted as questioning why the Bushmen must ‘continue to commune with the flora and fauna’ when they could ‘enjoy the better things in life, like driving Cadillacs’.

Survival’s director Stephen Corry said today, ‘Many countries have laws to stop people insulting other peoples and their ways of life. There are sinister echoes here of racial superiority which should have no place in any modern democracy. It’s this thinking which is ‘backward’, not the Bushmen.’

Zimbabwe's diamonds are dirty, claims Wikileaks

A US document, which says that thousands have been murdered and those close to president Robert Mugabe have been enriched by illicit diamond trade in Zimbabwe and published by Wikileaks, has come as a big jolt to diamantaires in the world's biggest diamond cutting and polishing centre in Surat and also the founders of Surat Rough Diamond Sourcing India Limited (SRSDIL).

The Wikileaks expose on Zimbabwe's blood diamond trade has come at a time when the company formed by 1,500 diamantaires - SRSDIL -- is eagerly awaiting the clearance of rough diamond export from Zimbabwe by Kimberley Process Certification Scheme (KPCS).

"In a country filled with corrupt schemes, the diamond business in Zimbabwe is one of the dirtiest," according to a classified document dated November 2008 from the US embassy in the country, released this week on Wikileaks.

The Zimbabwean government, according to Wikileaks, deployed soldiers at the diamond fields in Marange in 2008 to seal off the area and clamp down on illegal mining, but rights activists say this resulted in serious rights abuses by the army. Villagers were uprooted and murders increased, the classified US documents said. The classified document cited a village chief as saying the government had relocated as many as 25,000 villagers in an attempt to secure more money.

The Wikileaks expose is likely to impact the ongoing decision making process by international diamond regulator -- Kimberley Process -- and the member countries on allowing rough diamond export from the Marange diamond fields in Zimbabwe. The KPCS has failed to break an international deadlock over Zimbabwe's suspended diamond export at two consecutive meetings. In the first meeting organised in Israel on November 1, no agreement was reached on whether to allow Zimbabwe to export its rough diamonds from Marange fields after opposition by the members from Canada, Europe and Australia.

The second meeting held at Brussels in mid-November, too, failed to reach any consensus on Zimbabwe stalemate. "The Surat industry has suffered a big setback from this development, especially the newly formed SRSDIL. The company has spent a good amount of money in the last two months to secure a deal from Zimbabwe," said a member of SRSDIL.

The Zimbabwe Diamond Consortium (ZDC) and the SRDSIL had signed a pact for the supply of $1.2 billion worth of rough diamonds mined at Marange diamond fields in October. But the pact may not see the light of the day after the Wiki expose.

In the last two auctions of KP certified goods organised by Zimbabwe government in August and September, 2010, about 90 per cent of the $100 million worth of rough diamonds sold, were purchased by the Indian diamantaires, especially from Surat. Recently, Zimbabwe announced of having mined 2.7 million carats of diamonds worth millions of dollars from Marange diamond fields and that it had an additional stockpile of 4.7 million carats of rough diamonds.

Read more: Zimbabwe's diamonds are dirty, claims Wikileaks - The Times of India

Sunday, December 12, 2010

Asian consumers boost diamond sales

Wealthy Asians have been crowding the international retail stores of U.S.-based Harry Winston Diamond Corp., putting a shine to third-quarter earnings and a polish to future prospects. But the company said its own captive source of gem diamonds, a 40-per-cent stake in the Diavik mine in northwestern Canada, won't be more generous in 2011, because of technical problems as extraction moves deeper underground.

CEO Frederic de Narp said yesterday said diamond sales were not only up in Europe but also in the Mideast, Russia and many parts of Asia. The volume of carats sold gained sharply from a year earlier -mostly because of the impact of the global recession on the 2009 period.

Quarterly revenue almost doubled to $140.9 million U.S., including a 48-per-cent jump at the retail level and a 70-per-cent surge in "bridal business." Earnings were $3.9 million, or 5 cents a share, compared with a small loss a year earlier. "Asian business will be our major focus for building future growth," de Narp said.

Thursday, December 9, 2010

Mugabe's wife implicated in illicit Zimbabwe diamond trade

Zimbabwe President Robert Mugabe's wife was among those who gained millions of dollars from illegal diamonds mined in the east of the country, according to a US cable obtained by Wikileaks.

"High-ranking Zimbabwean government officials and well-connected elites are generating millions of dollars in personal income by hiring teams of diggers to hand-extract diamonds," US ambassador James McGee wrote to Washington in 2008.

"They are selling the undocumented diamonds to a mix of foreign buyers, including Belgians, Israelis, Lebanese, Russians and South Africans, who smuggle them out of the country for cutting and resale elsewhere."

The cable then discussed a meeting with Andrew Cranswick, chief executive of the British mining firm African Consolidates Resources, that had a claim to the Chiadzwa mine revoked by the Harare government, according to McGee.

"According to Cranswick, there is a small group of high-ranking Zimbabwean officials who have been extracting tremendous diamond profits from Chiadzwa," it said, naming Mugabe's wife Grace and Central Bank governor Gideon Gono.

The Chiadzwa mine is in the Marange district of eastern Zimbabwe.

The diplomatic message, released on Wednesday, said the diamond site had attracted a "swarm of several thousand local diggers" and "the police response has been violent, with a handful of homicides reported each week."

Other Zimbabwean government officials implicated in the siphoning of diamonds from the Marange fields include Vice President Joyce Mujuru and the head of the army, General Constantine Chiwenga, said the cable.

International regulator the Kimberley Process barred the sale of Marange diamonds in November 2009 following reports of human rights abuses by the army at the mine.

A monitor appointed by the watchdog in July partially lifted the ban, saying Zimbabwe had ceased abuses by the military, which seized control of the Marange fields in late 2008 and forced out tens of thousands of small-scale miners.

Wednesday, December 8, 2010

Hope springs eternal for ISO grading standard, but progress minimal

DCLA is Australia's premier diamond grading laboratory, and the only laboratory grading diamonds to the IDC rules. The IDC rules are the internationally recognised and accepted rules for diamond grading and diamond certification as set out by the WFDB, IDMA and Cibjo.

The attempt to secure an international diamond grading standard has been going on for the past three decades. Although there appears to be goodwill on all sides toward reaching an agreement, it seems far from clear that it will be achieved in the near future.

The absence of a single, internationally used diamond grading standard is one of the more contentious and persistent issues in the diamond and jewellery sectors. And it’s not for a want of trying. Many attempts have been made, but for a number of reasons all have fallen short of the goal.

As a result, there is no internationally recognised organisation that can determine equivalent educational curricula for gemologists, or to corroborate that all gem labs are operating in line with accepted procedures. Although there is general concurrence in the business as to how diamonds should be graded, there is no agreement, even among the largest institutions, as to the exact systems of measurement that should be adopted for clarity and cut.

The most obvious solution is set of standards recognised by the International Standards Organisation (ISO), and, indeed, in 1990, the painstaking process of formulating an ISO grading standard got underway. But after a about a decade and half it fizzled out unceremoniously, largely as a result of a lack of enthusiasm on the part of some of he largest players in the gemmological community.

ISO, a non-governmental body with representatives from 163 countries, was created in 1947. It has developed more than 18,000 International standards on a variety of subjects and some 1,100 new ISO standards are published every year. Its authority depends on its power to provide a guarantee of the integrity of those organisations that are allowed to display its logo.

The concept of a single grading system was first suggested in 1975 by the World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA). To that aim, the two organisations jointly established the International Diamond Council (IDC) and in 1978 at the World Diamond Congress approved the IDC Rules for Grading Polished Diamonds. HRD Antwerp became the largest lab to apply the IDC rules.

The effort to create an ISO standard for diamond grading that began in 1990 involved technical committee ISO/TC 174, which had been created at the initiative of both the jewellery and diamond sectors. Two working groups were formed—Working Group 1, which was charged with establishing a standard method for defining precious metals, and Working Group 2, whose role was to formulate a harmonized system for diamond grading.

Four parties were represented in Working Group 2: International Diamond Council; the Gemological Institute of America (GIA); CIBJO, the World Jewellery Confederation; and the Scandinavian Diamond Nomenclature (ScanDn). At the same time, an expert subcommittee was established. It would focus only on the technical issues, leaving commercial and political considerations aside.

In May 2002 — 12 years after it first began the project — two documents, one of 41 pages and the other of 39 pages, which together make up a Final Draft International Standard (FDIS), were circulated for approval among a list of ISO national member organizations that had expressed an interest in voting on the issue. But already at that stage, GIA, which operates the largest gem grading facility in the United States, had stated categorically that it had no intention of relinquishing its grading system in favor of one approved by ISO. As the then GIA President Bill Boyajian stated that year during a panel discussion in Basel: “We are confident that the system that we have developed could be accepted as an international standard.”

International Diamond Council Chairman Stephane Fischler says the main aim of securing ISO standards for diamond grading would be to bolster consumer confidence. Diamond jewellery buyers may be confused by the wide range of gem labs offering services, and would be able to rest assured that there is an added layer of protection when obtaining a grading report from an organisation that is ISO approved, he said.

“We have to recognise that consumers are demanding full transparency, but they are being flooded with a lot of freely available information, so we have to enable that by creating universal standards,” Fischler said. “I believe there is a lot of goodwill on all sides and that agreement will eventually be possible. I am quite hopeful that it can happen.”

“The IDC rules are supported by the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, along with some labs in Europe and in Australia. In addition, the CIBJO Blue Book on diamonds is close to the IDC rules. We have already reached agreement with CIBJO on descriptors for synthetic diamonds, so we see that reaching a consensus is possible. There has been renewed interest between the IDC and CIBJO about a possible joint document. The IDC has sat around the table with the GIA, HRD, CIBJO and others to discuss this issue, but we have not yet managed to reach agreement for several reasons,” Fischler said.

“We have been in contact with the GIA for a long time on a general level, and that continues. Let us remember that the basis of modern grading has been created by GIA. There are some difficulties regarding for example, the Excellent cut grading nomenclature. But I believe there are some solutions to be found,” Fischler noted.

In the absence of an ISO standard, the CIBJO Diamond Blue Book is possibly the most used reference. It was compiled by the CIBJO Diamond Commission, composed of representatives of trade organisations and laboratories from around the world. In October 2006, a district court in Munich, Germany, used the CIBJO Blue Book when it delivered a ruling that declared the use of the term “cultured diamonds” by a synthetics distributor to be misleading.

Georges Brys, General Manager of HRD Antwerp, says that ISO issue has to be tackled with great sensitivity to avoid any impression under European or American law that an anti-trust issue was at hand. “We must hold discussions that are correct from a legal point of view,” Brys commented. “The talks should be in an environment where there are neutral people in the room, and that means IDC people who should coordinate the issue. That way, you have the WFDB, IDMA and CIBJO on board. HRD Antwerp already acts in accordance with the IDC rules.

“We must have a neutral party, such as the IDC, running such a meeting and keeping accurate minutes to ensure that there is no suggestion of restrictive measures; it must be open, transparent and objective. The IDC are the experts in this matter,” he stated.

Brys explained that one issue of concern was the sets of master stones used by the different labs. HRD Antwerp has been using its set of master stones for 40 years, while the GIA has been grading according to its set for around 70 years. “As the GIA said at the China Diamond Conference in Shanghai last week, it has hundreds of thousands of certificates out in the market,” Brys commented. “So if standards were now changed, consumers would not have anything to compare with. And that, after all, is the main aim, to ensure that consumers have a clear and standardised way of understanding what the diamonds on offer actually are in order to boost their confidence.”

Brys says he is hopeful because he believes all parties are coming closer together. “The fact that we are talking is a good step. All the labs have said they are in favour of finding an international standard to help consumer understanding and confidence. As they said at the meeting in China, they are willing to come together and discuss the issue. That is a very important first step,” Brys added.

Not everyone is convinced about the need for an ISO standard for grading, or the possibility, that it could be achieved. Among these is Roland Lorie, who heads the Antwerp-headquartered International Gemmological Institute (IGI) which has been operating since 1975. The grading is based on two commonly used international standards. I am not sure that the different labs will be prepared to compromise on the terminology, Lorie said. They will want to keep their terminology because they have been using it for many years. We are talking about a difference in terminology rather than one of standards.

Meanwhile, from a consumer point of view, Lorie says the discussion has already been going on for 30 years. They know the lab but they may not be familiar with the exact standards that are used, he says. They are looking for a certificate from a recognized lab that built up its reputation and expertise over a number of years.

This universal language or terminology has existed for 70 years or so and is used by almost everyone in the diamond business. Whatever the majority of the diamond trade is using should be taken to the ISO to be adopted, he said. Lorie believes that even if an ISO standard was created for diamond grading, it could not be completely enforced. How would they be able to check that a small lab, that may have the ISO accreditation, is using the agreed grading standard and not the one it was using previously? In addition, there are labs that have built up their operations and expertise for many decades and will continue to implement top-quality work. But what about a small lab that receives the ISO standard? It might feel that it does not have to work hard anymore.

There are small labs in the United States, for example, that are not subject to the same rules as the large labs who must ensure that a single customer cannot account for more than 20 percent of its overall business. There are small labs for whom one client can account for most of their work, and there are labs that are also dealers, so there is a clash of interests. Apart from that, how would ISO be able to inspect so many labs to check that their work is in line with the standard?

“I think the most solid proof of the quality of the larger labs was proven during the global financial crisis. Before that, in 2007 and 2008, you suddenly saw many new labs being set up with a lot of money being invested in establishing and marketing them. Following the crisis, we saw most of them simply fell away while the large labs survived quite well. This proves, I believe, that the bigger labs are appreciated for their expertise and the quality of their work. You cannot set up a lab overnight and expect that a lot of marketing will turn it into a brand within a year or two.”

Meanwhile, another Antwerp diamond source said that the problem was largely one of commercial interests. “The GIA did not want to lose diminish its brand by agreeing to grading standards that were not entirely those of the organisation itself. “There are commercial interests involved, and I understand that. They want to maintain their brand and not compromise it,” the diamantaire added.

It should be noted that while an ISO grading remains an elusive goal, ISO is firmly ensconced in the gemmology sector, and has been for almost 15 years. In February 1996, the HRD Certificates Department was officially accredited according to the standards EN 45001, ISO/IEC Guide 25 and the relevant clauses of ISO 9002, for the grading of polished diamonds. As such the facility became the first worldwide to obtain such accreditation.

Five years later HRD Antwerp was awarded a new international standard ISO/IEC 17025, which relates to the general requirements for the competence of testing and calibration laboratories. It was one of the first laboratories to have achieved such a status worldwide, and was the very first in Belgium and in the diamond grading community to do so.

The ISO accreditation held by HRD Antwerp and a select group of other labs shows that they are competent both from a technical and procedural perspective, and has also implemented proper quality control systems.

Tuesday, December 7, 2010

Botswana reaches diamond industry milestone

Botswana has long been the darling of the diamond industry, not only as the largest-producing country, but also as a model for beneficiation in Africa.
Last week, the country reached another milestone in its efforts to diversify its diamond-related activity and economy: the first sale of rough outside the De Beers - Debswana framework began in Gaborone.

Botswana quite naturally wants to gain as much leverage as possible from its diamonds and in that vein, the tender, by Firestone Diamonds, constitutes a significant event.

It marks another objective achieved in advancing the country's diamond hub programme and another step in developing Gaborone as an international trading centre.

Firestone is separately tendering 2,500 carats of rough from its BK11 mine in Botswana and an additional 12, 000 carats brought in from its Liqhobong mine in Lesotho.

The Botswana government granted the company its BK11 mining licence on the condition that the company tenders the goods in the country - a policy it has implemented with other developing mines, particularly Lucara Diamonds' AK6 mine, which is expected to come online late next year.

As a result of this policy, Firestone's tender will bring new international buyers to Gaborone, whereas before, only the 16 Diamond Trading Company Botswana (DTCB) sightholders were given licences to buy rough in the country.

For the first time, buyers will now be able to buy rough directly from a Botswana mine as De Beers-Debswana production is aggregated with other De Beers' goods before being distributed locally.

Botswana's diamond story unfolded with the first discovery in 1967, transforming the country from an agricultural, rural-based economy to one whose resource wealth has delivered consistent growth, barring the recession of 2009.

However, the country's mines are old and tired with a naturally limited lifespan. De Beers has invested heavily in the Jwaneng mine, the jewel in its portfolio, as it expects the Cut-8 project to extend the mine's life beyond 2017 by about eight years and 95 million carats.

The new mines currently being developed are nowhere near the scale of Jwaneng in either size or quality. Given these apparently diminishing long-term mining resources, it is therefore vital for Botswana to diversify its economy while the going is good. So far, the country has played its cards the right way.

Botswana launched its cutting and polishing industry in 2007 with the creation of DTCB to supply goods to the local sightholders. One of those sightholders, the South African Diamond Corporation (SAFDICO), subsequently developed the Diamond Technology Park, which opened in January 2009, thus centralising the industry's activities in Gaborone. Two weeks ago, SAFDICO announced its plans to develop a diamond-trading facility as Phase Two of the project, which is expected to be operational in the second half of 2011.

The Firestone tender could be viewed as the introduction to that platform while in the long-term, Botswana envisions that independent companies, located elsewhere in Southern Africa, will sell their rough in Gaborone. One can expect the government, considered investor-friendly and very accessible to the industry, to be at the forefront of the initiative. There are a number of hurdles that still need to be ironed out, however.

Doing business in Botswana must be made more appealing for foreign investors through relieving the double taxation on international companies operating there and developing better infrastructure, including Internet networks.

The country also has to convince the industry that Botswana is more than a niche location, which provides a competitive advantage for companies that got in early and are able to capitalise on the security of the rough supply now being offered there.

Most importantly, to build a sustainable trading platform, the country needs to ensure that a stronger volume of rough is made available to outsiders so that a steady stream of buyers comes through the technology park.

Activity breeds interest and it will take a lot more in the initial stages than just Firestone's production to prove to buyers that trading rough in Botswana is a worthwhile proposition. For this, the government will be looking at De Beers. The two entities are expected to soon announce a new marketing agreement pertaining to production from Debswana, in which they are equal partners, as their current contract expires at the end of 2010.

As discussions continue, it is expected that the government, which also owns 15 percent of De Beers, will try to exert its influence on other shareholders to allow the company to sell goods independently through the prospective trading platform.

While the idea may meet with some resistance from Anglo-American and De Beers' chairman, Nicky Oppenheimer, they have also already demonstrated their willingness to offer De Beers goods on the open market by allowing access to Diamdel online auctions beginning in April of next year.

Whether the coalition will go one step further to sell rough through Botswana's new trading platform remains to be seen.

What is certain is that while Firestone's rough tender gives Botswana reason to celebrate, recruiting De Beers will give the country's government the boost it needs to diversify the economy and ease some industry skepticism.
The tender may well represent a milestone for the country, but it is yet to prove significant for the global diamond sector. To achieve that, both industry and country still depend on De Beers.

Sunday, December 5, 2010

Gemesis Goes White, to Market Directly to Consumers

Gemesis Diamond Company, which produces of gem-quality lab-created diamonds, announced that it is producing colorless diamonds. Until now, the company offered only yellow diamonds.

The company said the new line of diamonds is of excellent color and clarity, adding that most diamonds in current inventory average approximately half-carats; however, Gemesis succeeded in producing colorless diamonds larger than one carat.

The colorless diamond offering was not the only news from the company. Gemesis also plans to go directly to consumers, saying that it is in the final stages of developing its own jewelry line.

Gemesis will be launching a new e-commerce website in the coming months, combined with parallel sales through limited retailers who subscribe to the company program – including education, approach, and pricing philosophy. The company’s own Internet pricing will not undermine participating retailers, it promised.

The company also reported advances made with its fancy color stones, achieving a vivid yellow color. The new yellow stones will also be available on the e-commerce site.

In May 2008, Gemesis announced the beginning of regular production of pink diamonds. Maybe due to the economic crisis that followed a few months later, those diamonds were never widely sold in the market.

Monday, November 29, 2010

Record price paid for perfect pink diamond

A rare pink diamond sold at auction today for a record £14.86 million.

The 14.23-carat rectangular gem, known as the Perfect Pink, went under the hammer at British art auction house Christie's Hong Kong saleroom, where it was bought by an anonymous bidder.

It was a record price for a jewel sold at auction in Asia. Another record was broken by the total raised by the Jewels: The Hong Kong Sale, which at £50,601,648 was the highest amount Christie's had yet raised at a jewellery sale worldwide.

Vickie Sek, director of the jewellery and jadeite department for Christie's Asia, said: "The strength of the jewellery market was once again demonstrated in Hong Kong with a record 78.9 million dollars (£50.6m) auction making it the highest total ever for a jewellery auction in Asia and the largest at Christie's worldwide.

"At 23.2 million dollars (£14.86m), the Perfect Pink became the most expensive jewel ever sold at auction in Asia.

"Exceptional Burmese rubies and Kashmir sapphire also fetched top prices, as did jadeite which remains in great demand with Asian collectors."

Christie's said only 18 pink diamonds over 10 carats had appeared for sale in the auction house's 244-year history, with the Perfect Pink the first to be graded a "fancy intense pink".

A spokesman added: "Large, polished pink diamonds with this intensity of colour are virtually unheard of - in fact, fewer than 10% of pink diamonds weigh more than 0.20 carats."

The diamond's previous owner also wished to remain anonymous.

Prices included the buyers' premium.

The Independent

Thursday, November 25, 2010

South African court agrees to block sale of 27-carat pink diamond

South African businessman has obtained a temporary court order blocking the sale of a 27-carat pink diamond with a claimed value of $25 million found on November 3 in the Northern Cape.

Johann Jacobus Cilliers secured the order in the Cape Town High Court last week to stop Kimberley Consolidated Mining (KCM), in which he owns shares, selling the diamond, found last month at the miners' Bo Karoo site in the Northern Cape, according to a report in Times Live.

Cilliers claims that the company is in financial difficulties, and will receive on just 15 percent of the profit from the sale of the diamond because of an invalid subcontractor agreement with Pico Diamonds.

He wants the company to retain all the proceeds of the sale which would help ensure its survival. Cilliers said the money could be used to pay creditors, reacquire mining equipment and pay dividends to investors.

Cilliers claimed the firm and its subsidiaries were plagued by corruption and "maladministration".

KCM CEO Phemelo Sehunelo told The Times: "One, we are ready to defend the action and, two, we have a good subcontractor agreement with Pico Diamonds. And we have been keeping records of everything. Since the inception of this company or joint venture, this single shareholder [Cilliers] has been causing problems for us."

Last year, the JSE-listed company ran into trouble with the authorities for failing to submit annual financial statements. This month, the company was delisted.

After the cleaning process, the pink diamond will be sold at tender, the firm’s board of directors said. "In terms of the subcontractors agreement, KCM will receive royalty of 15 percent of the gross selling price of the diamond," the board said.

Antwerp Facets

Wednesday, November 17, 2010

Petra Diamonds gets big time pay day

Investing in a mine that De Beers decided to cast off would seem to many a risky consideration, especially for a junior miner. However, when the opportunity arose in 2008, South Africa-based Petra Diamonds saw an opportunity to score big.

And it certainly did. In the space of little more than a year, Petra’s new acquisition yielded the 507-carat Cullinan Heritage, which was classified as virtually flawless and went on record as the 19th largest diamond ever mined. It was sold to a jeweller in Hong Kong for $35.3 million, the highest-ever sale price achieved for a rough diamond. That stone alone helped boost the company’s revenues by 88 percent in the 12 months to June 2009.

Granted that this was no ordinary mine. The Cullinan Mine, which Petra purchased from De Beers in 2008 began life in 1902 as the Premier Mine, outside the town of Cullinan, 40 kilometres east of the South African capital of Pretoria. In 1905, it produced the world’s largest diamond and one of the most famous, the 3,016-carat Cullinan. Since then, the mine has produced a quarter of all diamonds weighing more than 400 carats, and four of the top 20 largest high-quality gem diamonds: the Cullinan, weighing 3,106 carats; the Golden Jubilee, at 755 carats; the Centenary at 599 carats; and the 507-carat Cullinan Heritage.

Indeed, the Cullinan Heritage is just one of many exceptional white diamonds Petra has extracted in the past year from the Cullinan mine. In addition, there was a 168-carat that it sold for $6.3 million, a 64-carat diamond sold for $3.7 million, two 50+ carat stones sold for $2.8 million, a 104-carat diamond sold for $2.0 million, and a 37-carat diamond sold for $1.1 million.

Cullinan’s rare blue diamonds also command high per carat prices, with a 6.7-carat blue sold for $510,000, and a 6.5-carat blue manufactured to a 2.8-carat polished stone sold for $250,000. Meanwhile, at Petra’s Koffiefontein mine, a 70-carat diamond was sold for $1.1 million, and a 34-carat gem sold for $1 million.

Earlier this month, it was announced Petra has completed a transaction for loan facilities of $83.5 million, which means it will be able to finance the expansion of the Cullinan mine, as well as the Williamson mine in Tanzania in which it has a 75-percent stake.

Cullinan contains the world’s second-largest indicated diamond resource, of 181.4 million carats, included in a total resource base of 203.3 million carats (including tailings), and the company is planning an expansion programme at the mine to take annual production from just over 920,000 carats in full year 2010, to 2.4 million carats by full year 2019. This expansion plan will eventually access the first portions of the major C-Cut resource, which is estimated to contain some 133 million carats, and will also involve a large tailings operation.

Petra Diamonds was established in 2005 when the firm, which was then just a pre-production diamond explorer with assets in Angola, merged with Crown Diamonds, a miner with projects in Sierra Leone. Shortly afterwards, De Beers was under pressure to sell assets and was looking to offload part of its holding in Cullinan, which was producing fewer of the huge stones for which it had become famous. Petra bought a 37 percent holding, which it has since increased to 74 percent.

Although acquiring a mine that had been in operation since 1902 might be considered by some as something of a risk, Petra Diamonds carried out a great deal of due diligence before going ahead with its first acquisition of 37 percent, said Bobby Morse, a Cullinan spokesperson. “There was a lot of confidence that it was a good acquisition because Cullinan has always produced good levels of diamonds, and many large high-quality diamonds. Petra is good at right-sizing operations; it’s much easier to take on a mine of this type when you are a company of the size of Petra,” Morse said.

Morse said it was common in a range of mining industries for larger producers to sell off smaller operations since a point is reached when it may not be economically worthwhile to carry on running. “De Beers is a very big company that has much larger mines with which to occupy itself and where they may prefer to put their capital.

“Cullinan is part of the so-called C-Cut which requires an investment of some tens of millions of dollars and a miner like De Beers may prefer to use that money on its larger operations rather than spending that capital on a mine whose output might be marginal to their overall operations. It makes sense for De Beers to receive money for selling its share in Cullinan and not to have to invest money in expanding the mine,” Morse said. That principle was applied by De Beers at several of its operations since it also sold its Kimberley Underground and Koffiefontein mines in South Africa, and its share in the Williamson mine in Tanzania.

“For Petra Diamonds, the aim is to achieve annual output of three million carats by 2019,” Morse said. “That is their aim, and they have the assets to get there because they have several mines not just one mine as is the case with many junior miners. Petra has high-level, experienced people, with some of them having worked for De Beers.”

Morse said that while acquisitions was not a core part of its strategy, if it considered that a deal could be beneficial to its shareholders then it would be willing to do so. “It is not a core part of its model – which is to treble production – but don’t be surprised if it did so if there was an acquisition that is accretive.”

Petra Diamonds sees its investment in Petra, and its other mines, as a success. It has interests in seven producing mines: six in South Africa – Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star, in addition to Cullinan, and the Williamson mine. The company reported a turnover of $17 million which soared to gross revenue of $177.7 million for the year ended June 30, 2010, and was up 88 percent on the year-earlier period, while it also recorded net profit of $70 million. Petra says it is on track to more than double diamond production to 2.5 million carats by 2014 – and triple production to more than 3 million carats by 2019. For the year ended June 30, gross diamond production rose 6 percent to 1.16 million carats.

Petra Diamonds has raised its expectations for the long-term potential at its Cullinan, Williamson, Kimberley Underground and Koffiefontein mines, both in terms of output and prices. There could be a possible decline in prices only if release of stockpiles of diamonds from Russia or Zimbabwe. The company also faces a handicap from currency issues as the South African rand remains strong and the dollar continues to decline.

Although Petra Diamonds is mainly concerned with raising production, it is also carrying out exploration. The group’s “modest annual exploration budget” is now focused on Botswana, which also offers a friendly operating environment.

Looking forward, Petra Diamonds says it has witnessed an upturn in the important U.S. market, “as evidenced by the steadily increasing volume and value of polished diamond imports in 2010 and improved sales in North America reported by leading diamond retailers. As the diamond market now enters the pre-festive season, expectations are for a continued improvement that should end with robust retail sales in the fourth quarter.”

For the 2011 financial year, it foresees diamond prices being firmer as long as the market and global economy remain stable. “Cullinan is our flagship asset and, along with Williamson, a key driver to Petra’s production and revenue growth in the coming years,” said Petra Diamonds' CEO Johann Dippenaar in an interview with The Independent.

“We completed the acquisition of the Kimberley Underground mine in the past year and introduced a seventh producing diamond mine to our portfolio. We had been operating Kimberley Underground on a care and maintenance basis together with De Beers since September 2007 and therefore had time to significantly rehabilitate the underground workings and to build the first of two new plants. Production has now commenced and the mine will be a valuable contributor to the company’s growth plans in the 2011 financial year,” Dippenaar added.

As for its sales and marketing operations, Petra’s management believes that as demand for rough goods grows stronger, there is a continuing constriction of the traditional diamond pipeline, with more and more companies opting for vertical integration.

“From Petra’s perspective, this is particularly evident by the number of major manufacturers and retailers now buying rough diamonds directly from the group’s tenders, rather than via traditional diamond traders,” the company said in its financial statement for full year 2009. “We think this trend will continue as rough becomes ever more scarce and our strategy to continue increasing output ensures that we are poised to benefit from this trend.”

Thursday, November 4, 2010

Kimberly Process Fails To Reach Agreement On Zimbabwe's Marange Diamonds

Kimberly Process members failed again on Thursday to reach agreement on whether to allow Zimbabwe to export rough diamonds from its controversial Marange field without Kimberly supervision, officials have said.

After deferring discussion for two days, Kimberly members had hoped a consensus could be reached Thursday after informal talks had produced an agreement that was rejected by Canada, Australia and other countries.

Chairman Boaz Hirsch told reporters in Jerusalem the watchdog group will now take an extra two days to see if members can reach a consensus on the highly contentious issue of Kimberly oversight.

"An agreement has not been finalized," said Hirsch. "We hoped to have a consensus today, we believe it will take a few more days...We are still working with Zimbabwe and other countries."

A defiant Zimbabwe Mines Minister Obert Mpofu told the conference and reporters later that Zimbabwe will sell the output from the Marange alluvial field "without any conditions." He said Zimbabwe will start doing that immediately. The minister said he was tired of the West treating Zimbabwe as "one of its entities."

The Kimberly Process, created to prevent the sale of so-called conflict or blood diamonds diamonds on international markets, suspended its certification of Marange diamonds last year citing alleged human rights abuses and other abuses by the military in charge of the Marange zone and other players in exploiting its riches.

Zimbabwean officials denied allegations by human rights groups that forced labor by local residents, torture, harassment, beatings and smuggling by government troops continue in the area.

A recent Kimberly review mission found that low-level intimidation continued, and urged Harare to crack down on the smuggling of diamonds into nearby Mozambique, a way station to the Gulf and other ultimate markets.

It also wants Zimbabwe to demilitarize Marange. The Harare government says it has fully complied with Kimberly rules and is supported by African and Asian countries in its quest to sell diamonds without supervision.

Back in Harare, meanwhile, state media reported that police Thursday arrested six officials of the Zimbabwe Mining Development Corporation and Canadile Mining, a government joint venture partner in Marange, on charges of fraud in obtaining permission to mine diamonds in the controversial field.

The state has accused Zimbabwe Mining Development Corp. Chief Executive Dominic Mubaiwa, ZMDC Chairwoman Gloria Mawarire, board members Ashton Ndlovu and Mark Tsomondo, Canadile Mining Secretary Tichaona Muhonde, and company representative Lovemore Kurotwi of duping the government into believing Canadile had sufficient resources to develop the Marange fields at the time the joint venture was formed.

The state-controlled Herald newspaper reported that the executives are alleged to have told the government that a South African company called BSGR wanted to invest US$2 billion in Zimbabwe when it fact it did not exist. A Kimberly Process report praised Canadile, but its future in Marange operations now seems in question.

Zimbabwe Republic Police spokesman Wayne Bvudzijena said the six were being held at the Braeside Police Station in Harare. He decline to comment further on the high-profile arrests.

For two viewpoints on the discussion in Jerusalem, VOA Studio 7 reporter Sandra Nyaira turned to Tiseke Kasambala, Human Rights Watch researcher on Zimbabwe, and Supa Mandiwanzira, president of the Affirmative Action Group, a Zimbabwean black empowerment organization, both attending the Kimberly Process meeting this week.

Kasambala, whose organization says Harare should not be allowed to freely export Marange diamonds, charges that the government and its partners in developing the Marange field have as failed to comply with a number of terms of a Kimberly Process work plan set out in late 2009. Mandiwanzira said those opposing Zimbabwe's s bid to sell its diamonds at are supporting what he says is the West's ultimate objective of regime change.

Tuesday, November 2, 2010

185-carat white diamond recovered in Lesoto mine

A "remarkable" 185-carat white rough diamond has been recovered in Losotho's Letseng mine, the Gem Diamond company announced Tuesday.

“Early examinations indicate that this rough diamond will yield top color and top clarity polished diamonds and is thus expected to achieve a substantial price per carat,” Chief Executive Officer Clifford Elphick said in statement quoted by 'Bloomberg.'

Only last year, the London-based diamond company recovered a 196-carat stone from the same mine. And according to a September, 2010 report by analyst Alison Turner of Panmure Gordon and Co., that rough diamond may be worth almost $12 million,

The Letseng mine, 70% of which is owned by Gem Diamonds, has been a more-than-steady supplier of impressive rough diamonds. According to Gem, three of the 20 largest diamonds recovered over the past four years were found in the Lesoto mine.

Monday, November 1, 2010


Diamond Exchange Ltd

List of Proof of Debts

Rare 14.23Ct Pink at Christie’s Hong Kong Jewelry Auction

Christie’s Hong Kong will offer at auction over 300 lots of gemstones and jadeite jewelry with a total estimated value of $55 million. Leading the sale is a 14.23-carat fancy intense pink VVS2 rectangular cut diamond ring estimated at $14-$19 million.

Calling it the Perfect Pink, Christie’s said that in over 244 years of auction history, it offered only 18 pure pink diamonds over 10 carats. None of them were graded fancy intense pink.

Last December, Christie’s Hong Kong sold a 5.00-carat cushion-cut fancy vivid pink potentially flawless diamond for $10,776,660, an average of $2,155,332 per carat. Christie’s estimate price for the 14.23-carat pink comes to $1-$1.34 million per carat. Considering the high prices such rare diamonds realize at Hong Kong auctions, the diamond may sell for more.

The November 29 auction will also feature a 12.02 carat fancy vivid internally flawless yellow oval cut diamond from Tiffany & Co. estimated between $1.25- $1.9 million.

Notable as well is a Nirav Modi necklace made entirely of Golconda diamonds, known for the quality in which light appears to pass through the diamonds unobstructed.

IDEX Online News

Thursday, October 28, 2010

Diamond Exchange

The Diamond Exchange Ltd. Australia.

When this Australian diamond dealer went belly up it not only left customers out of pocket but brides with bare fingers. A Current Affair investigates how Aussie brides-to-be are being left empty handed on their special day.

Tuesday, October 26, 2010

Pink Panther Diamond Ring to Sell for £24 Million

The Pink Panther diamond goes on sale next month, with odds looking up for it to become the most expensive diamond ever to be sold, as it is believed it will fetch no less than £24 million.

Quite a hefty amount for an engagement ring.

Luckily, it’s not meant to be that, since it’s a collector’s piece, with several potential customers already expressing interest in it, despite the exorbitant price tag, This Is Money informs.

The Pink Panther diamond weighs 25 carats and was created by Harry Winston, jeweler to the stars. For the past 60 years, it’s been in a private collection but will exchange hands (and owners) next month.

Pre-sale estimates indicate that the diamond could become the world’s most expensive stone, with odds to sell for anything in between $27 million and $38 million (£17 – £24 million).

Even if it fetches the lowest estimate, it would still knock the previous record holder, a 35-carat Wittelsbach diamond that sold for £16.3 million.

According to David Bennett, chairman of the international jewelry department at Sotheby’s, the high interest in the Pink Panther is due to the fact that it’s labeled one of the rarest and close to perfect diamonds in the world.

“I cannot exaggerate just how rare this stone is. This sale is one of the most exciting of my 35-year career,” Bennet says, as cited by the aforementioned e-zine.

“It is one of the most desirable diamonds ever to come to auction and its beauty has haunted me since the very first time I set eyes on it some years ago,” Bennet adds.

The diamond is classified as a “fancy intense pink,” a very rare color, as per the Geological Institute of America. It’s set between two other diamonds on a silver ring support.

“There is something so exuberant, joyful and intensely feminine about a pink diamond that makes them absolutely irresistible,” Bennet adds of the diamond, also described as “potentially flawless.”

Thursday, October 14, 2010

India's diamond bourse set to shine anew

India's first diamond exchange, which opens next week, expects turnover to rise 10-15 percent annually the next five years, challenging the dominance of traditional centres like Belgium and Israel.

Bharat Diamond Bourse, which shifts to a bigger site on Oct 17 after a near-two-decade delay, currently has a turnover of $27-28 billion, and hopes to grow substantially on higher participation from diamond traders across the globe. "We expect diamond traders from Israel and Belgium to start trading over here. And we also expect primary producers to come and sell their produce in India," Anoop Mehta, president of the exchange, told reporters at a pre-launch meet.

The exchange, with over 2,300 members, will be housed in 8 towers over an area of 20 million sq feet at the Bandra-Kurla complex, an emerging business district in suburban Mumbai. The exchange proposes to get buyers, sellers, banks and customs officials under one roof to facilitate exports of polished diamonds, Mehta said adding State Bank of India and Bank of India will have a presence in the bourse.

Over the next couple of years, Mehta expects global diamond companies to open offices here, and compete with the trading centres of Belgium and Israel which together account for turnover of $50 billion. In 2009/10, India imported 149.8 million carats of rough diamonds, up 24.5 percent on year, and exported 59.9 million of cut and polished diamonds, up 28.3 percent on year. India processes about seven in every 10 of the world's diamonds, accounting for 57 percent of the global diamond processing industry.

The country's diamond processing industry accounts for 70-75 percent of total diamond exports and employs 850,000 people, making it the largest cutting centre by value and number of employees. "All top 400 exporters are over here (at the bourse), which accounts for 90 percent of the turnover," Mehta said. The exchange, which was incorporated in 1984 with diamond exporters and state-run trading firm MMTC Ltd. , earlier operated out of the city's traditional diamond hub in south Mumbai. While the bourse was expected to move to its new premises in the early 90s, it was held up by procedural delays, Mehta said.

Tuesday, October 12, 2010

Botswana records first trade surplus in 20 months

Strong diamond sales in June underpinned solid national export figures for the month enabling Botswana to record its first trade surplus, P202.7 million, since October 2008, latest data from the Central Statistics Office (CSO) has shown.

October 2008 marked the onset of a 10-month recession driven largely by a 20.9 percent contraction in the mining sector, which constitutes more than a third of the Gross Domestic Product. During that period, Botswana witnessed heavy trade deficits, running into P4 billion in the first quarter of 2009, as the value of imports greatly outweighed that of exports.

However, the CSO's recent data indicates that exports for June 2010 at P3.48 billion outweighed imports for the same month at P3.28 billion, enabling the country to declare a trade surplus for the first time since September 2008.

The CSO was quick to point out that June's improved performance, however, did not alter the overall trade picture for the second quarter.

"This was not enough to influence trade balance for quarter two of 2010 as the trade deficit for the quarter stood at P1.54 billion," the statistics body reported.

June's healthier trade position was driven by P2.61 billion in diamond exports and similarly stronger export values for copper/nickel at P394.4 million and textiles at P70 million. Month-on-month, the value of diamond exports in June 2010 was 55 percent higher, copper/nickel 50 percent and textiles 70 percent.

The CSO figures reveal that the value of diamonds exported in June represent the strongest monthly exports of the gems since August 2008, shortly after which exports plummeted by nearly 65 percent as mines cut production in response to the recession's onset.

In addition, diamond exports' contribution to total exports rose to 75.1 percent month-on-month in June 2010 from 69.6 percent.

"The steep increase in exports coupled with the noticeable trade surplus could be a sign of recovery in exports which were seriously affected by the economic crunch," the CSO said.

With inflation in South Africa - which supplied 68 percent of Botswana's imports in June - declining from 6.2 percent in January to 3.5 in August, analysts believe forthcoming CSO statistics could reveal more trade surpluses after June 2010.

Diamonds are expected to continue propping exports up, as sightholders scramble for gemstones ahead of the US Thanksgiving holiday in November, the Christmas/New Year festive period and the Chinese New Year next February.

Staff Writer

Sunday, September 12, 2010

A 10.95 Ct Fancy Vivid Blue Diamond on Christie’s Block

The largest triangular-cut fancy vivid blue diamond ever to be auctioned will be offered by Christie’s at its New York sale next month. The Bulgari Blue Diamond is a ring set with a triangular-cut, 10.95 carat fancy vivid blue diamond and a triangular-cut, 9.87 carat white diamond. The auction house expects the ring to sell for more than $12 million.

The ring will be the highlight of Christie's Jewels: The New York Sale to be held on October 20. The rare color and size of the blue diamond will probably attract collectors and diamond traders such as Lawrence Graff to this auction.

In recent years, prices for top-quality colored diamonds have increased rapidly, driven by collector demand and increasingly limited supply. Large natural blue diamonds - in particular those possessing the coveted Vivid Blue tone and saturation - are amongst the most sought after colored diamonds, earning exceptional prices of well over $1 million per carat at auction.

In December 2008, Christie’s auctioned the Wittelsbach-Graff Diamond, a 35.56 carats fancy deep grayish blue diamond, for $24.3 million, a record price for an auctioned diamond.

The ring is being offered by a private European collector who has kept the ring in his family for almost 40 years. According to family tradition, the ring was given as a gift from the collector to his wife in celebration of the birth of their first baby boy. The sale price in 1972, when the ring was commissioned from Bulgari in Rome, was about $1 million, a fortune at the time.

Christie’s has arranged a global preview tour of the Bulgari Blue Diamond and other highlights of the October auction. The items will be viewable at Christie’s Geneva, Hong Kong and London throughout this month and at Christie’s New York in mid-October, during the week leading to the auction.

Tuesday, August 31, 2010

International Diamond Expert Says Zimbabwe Could Top Diamond Producers

An international diamond expert visiting Zimbabwe said Tuesday the country could become the world's largest diamond producer if the Marange diamond fields were exploited to the fullest.

Speaking at the official launch of the Zimbabwe Diamond Technology Center in Harare, Fillip van Laere of the Antwerp Diamond Industry in Belgium, said projections based on mining activities by the two companies in the area show that Zimbabwe can produce 40 million carats of diamonds per year and earn about US$ 2 billion.

The diamond expert said with only 10 percent of the field being mined at the moment in the controversial Marange fields, production would increase if more players are brought in to work in the area.

Van laere said Zimbabwe had the potential of becoming the world's most important diamond producer, surpassing countries like Russia, Botswana and South Africa, adding that Harare's major challenge is in harvesting the diamonds responsibly and maximise profits.

With the launch of the diamond technolgy centre, which will cut and polish diamonds from Marange, Van laere said Zimbabwe is on course to adding value to the diamonds and increase revenue from the gems.

The US$13 million centre is owned by Canadile Miners, whose chairman Cogan Matanhire told delegates at the launch that when fully operational, it will create more than 7 000 jobs.

Guest of honour at the event and Mashonaland West governor, Faber Chidarikire, said the centre will lessen headaches for fiscal authorities as it expected to bring in more revenue into the country.

Van Laere is part of a four-member belgian delegation currently touring Zimbabwe. The team met with Mines Minister Obert Mpofu Monday.

Monday, August 30, 2010

To Counter Increase In Rough Diamond Prices

SURAT: As the gem dealers in Antwerp and Dubai have increased the rough diamond prices by about three per cent, anticipating robust demand from key consuming centre in Surat ahead of Christmas season, diamantaires have started building pressure on the promoters of new diamond syndicate to speed up the legalities of forming Surat Diamond Sourcing India Limited (SDSIL) and start its operations.

Industry experts said the prices of rough diamonds have climbed this year after producers, including De Beers, cut output and gem dealers rebuilt stockpiles. The rough prices rebounded by almost 15 to 20 per cent from its pre-recession level following the increase in jewellery sales across the globe, including the United States, China, Hong Kong, South America, United Aran Emirates and Commonwealth of Independent States (CIS) countries.

Data collected by Gems and Jewellery Export Promotion Council (GJEPC) show that India's diamond trade during the first six months of 2010 has already surpassed 2008 levels for the same period. Rough imports for six months are up 10 per cent from the 2008 to $ 6 billion during January to June 2010.

"Recession has taught diamantaires that over production ultimately hurts their business and therefore, they no longer are holding large volumes of rough stock in inventory. However, they (diamantaires) have to depend on the gem dealers in Antwerp and Dubai for their rough supplies. But, the situation is such that the prices of rough are on fire due to the improved demand of jewellery in some of the key consuming centres of the world," president of Surat Diamond Association ( SDA) Dinesh Navadia said.

Praveen Shah of Ankit Gems said, "The company is going to directly source rough diamonds for the industry people at competitive rates. We want the company to start operations soon. This will help us in minimising our costs of procuring rough diamonds from the secondary market at higher rates."

Recently, Russia's government has announced to sell the diamonds it bought last year for $1 billion from ZAO Alrosa. However, the SDSIL promoters have been closely eyeing the developments in rough mining countries to tap the vast resources available.The spokesperson of SDSIL said the legal process of forming the company has been started and it may take a month to complete the formalities. "The response is tremendous and we have collected a huge amount running into crores of rupees in the last 10 days. They (industry stakeholders) will have to wait for a month to see the company start its full-fledged operations."

Hitesh Shah of Mahima Gems said, "Only SDSIL can promise the industry consistent supply of rough diamonds at competitive rates. However, we have been eagerly waiting for the company to start operations at the earliest."

Melvyn Thomas, TNN