Sunday, January 30, 2011
Zimbabwe's dictator Robert Mugabe is helping to prop up his power base with cash from Chiadzwa diamond auctions, it is claimed.
The global diamond industry has controversially cleared the way for President Robert Mugabe's regime to raise millions of pounds from exports, according to campaigners.
The Kimberley Process (KP) industry watchdog moved earlier this month to legalise sales from the 150,000-acre Chiadzwa fields in eastern Zimbabwe, which are controlled by the military and have been described by Zimbabwean finance minister Tendai Biti as "the biggest find of alluvial diamonds in the history of mankind".
Diamond sales from Chiadzwa could dwarf the impact of European and American sanctions and set the stage for Mugabe, 86, to strengthen his military, rebuild his power base and even stage elections this year.
"The agreement would allow a huge amount of diamonds from Chiadzwa to enter the international market, despite the human rights abuses that have been reported from the fields," said Elly Harrowell, who monitors KP for the Global Witness lobby group.
The huge diamond wealth of Chiadzwa in the Manicaland province was discovered in 2006 when a Zimbabwean company, backed by the military, moved on to the site. Some geologists say the concession – from which a British company, African Consolidated Resources, was ousted in 2006 – is the largest find in a century. Amnesty International has claimed that soldiers deployed to guard the fields have forced slaves to mine diamonds at gunpoint. Some reports have indicated security forces may have killed miners working illegally on the site.
Mugabe, who after disputed elections in 2008 entered an uneasy coalition with Morgan Tsvangirai, has called on his party, Zanu-PF, to prepare for elections this year. But Tsvangirai's Movement for Democratic Change (MDC) says a fair and violence-free poll cannot be held until a new constitution is agreed. Pro-democracy campaigners are lobbying the African Union, which meets this week in the Ethiopian capital, Addis Ababa, to call for the poll to be postponed until 2013.
The MDC says renewed persecution of its supporters suggests Mugabe is determined, come what may, to hold elections this year. There is evidence of Zanu-PF (Zimbabwe African National Union – Patriotic Front) stepping up distribution of seeds and food in rural areas, a classic sign of looming elections.
A University of Zimbabwe political science professor, John Makumbe, said: "We have just seen the appearance of £20m of farming inputs – tractors, seeds, tools and fertiliser. That can only have come from underhand diamond deals."
The KP certification scheme was set up by the diamond industry in 2003 in a bid to reassure consumers that gems they buy have not been used to fund illegitimate groups, such as the rebel bands which terrorised Charles Taylor's Liberia. Rough diamonds without KP certificates fetch much less money and can only be sold through complex, underhand networks. According to the diamond trade press, KP legalised sales of rough diamonds from Chiadzwa on 18 January after a written consultation process which followed deadlocked talks in Israel last year.
KP reintroduced a ban on exports from Chiadzwa in November last year, in response to concerns about transparency and corruption following auctions in August and September.
The new agreement comes as the industry is clamouring for rough diamonds amid a global shortage that has pushed up prices. It not only makes Zimbabwean diamonds legal but considerably simplifies the process through which the country has to go to sell them. It does away with the need for a KP monitor to supervise shipments and provides for exports to be allowed not only from the two companies operating at Chiadzwa but also from future mines in the fields. Already a major Indian consortium of diamond-cutting firms has welcomed the agreement. On Thursday, Surat Rough Diamond Sourcing announced that it would move to buy £750m of diamonds this year from Chiadzwa.
Zimbabwean pro-democracy campaigners are divided over KP certification. In November, Mugabe's minister of mines, Obert Mpofu, admitted that £100m of diamonds had been sold to India despite the KP ban in force at the time.
Makumbe said: "Without KP agreement Mugabe and his people sell diamonds anyway. At least if an official KP process is in place, there is some way of monitoring the income and there may be auctions which can be audited.
"Zimbabwe needs money desperately. At the moment, things are so tight that the government of national unity is increasingly being seen by the people as not succeeding in bringing about meaningful change."
Diamond miner Rio Tinto says its diamond production at the Murowa diamond mine in Zimbabwe, in which the company holds a 78% stake, increased 43% in 2010 compared to 2009.
The diamond company announced that the Murowa mine yielded 139,000 carats of rough diamonds for all of 2010, compared to 97,000 carats in 2009. However, production dropped 29% in the last quarter of 2010 from the corresponding period in 2009.
No specific reason was given for the Q4 slump, although Rio Tinto said that continued power outages affected operations at Murowa.
The open-pit Murowa mine, completed in 2004, is one of three operating diamond mines in Zimbabwe, the other two being the Chiadzwa mine in Manicaland and the River Ranch Mine in southern Zimbabwe, which is 75% owned by De Beers and has been in production since the 1990s.
Since Murowa was constructed, diamond deposits have been discovered in the country's Marange fields and have been mined amid ongoing reports of human rights abuses by the government security forces charged with securing the region. In October 2010, the Zimbabwean government reported the discovery of three additional diamond deposits in Binga, Masvingo, and in the Tsholotsho region of western Zimbabwe.
Thursday, January 27, 2011
The governments of Zimbabwe and Angola might reach an agreement to allow Angolan diamond companies to explore for diamonds in Zimbabwe, the head of a diamond industry delegation currently visiting Angola said Wednesday.
The AngolaPress news website reports that following a meeting with the Angolan Development Bank's board of directors, Ozias Hove told press that the "good friendship ties" existing between Angola and Zimbabwe could allow such an arrangement.
During its visit to Angola, the Zimbabwe delegation visited the headquarters of Angola's government-owned diamond company, Endiama, and Endiama's commercial subsidiary, Sodiam. The delegation's visit is scheduled to end today after a visit to a diamond manufacturing facility south of Luanda.
Angola, which lies northwest of Zimbabwe, is one of the world's top diamond producing nations. The Kimberley Process Annual Global Summary for 2009 put Angola's output of rough diamonds at 13.8 million carats with a value of $1.17 billion.
Zimbabwe's diamonds have been under international boycott, but this month the Kimberley Process approved a modified version of the Jerusalem Agreement that clears the way for the country to resume diamond exports. Last year, a Belgian expert assessed that Zimbabwe could become the world's #1 diamond producer by 2013.
All she needs is something blue.
Natalie Portman's sparkling engagement ring has something old, something new and something recycled.
The round-cut center stone is an antique, the pave diamonds are from a conflict-free mine and the band is made of recycled platinum, according to InStyle.
The $35,000 sparkler was designed by jeweler Jamie Wolf, along with Portman's beau, dancer Benjamin Millepied.
Jewelers are inundated with requests from couples who want their engagement rings to be as green as their lifestyles, and more and more are working with artisans who use recycled gold and platinum in their designs.
Jennifer Gandia, the owner of Greenwich Jewelers in Tribeca, told the Daily News that she's noticed an uptick in consumer interest in reclaimed metals along with cruelty free diamonds in the past two years. In fact, 60% to 70% of her clients come in requesting a ring made from recycled or reclaimed metals.
"The ring is a symbol of love and commitment and something that the bride will have forever," she said. "People don't want this symbol to be connected with something that harms the earth or causes suffering or funds something illegal."
There isn't much of a price break on choosing a ring made from recycled gold or platinum versus brand new metal. And diamonds from a mine that utilizes humane practices and follows the stone from rock to ring are likely to be up to 7% pricier than a diamond from a more suspect mine.
Gandia said that she loves when people come into her shop with a family heirloom stone. They can then design the ring exactly as they like, with the materials they want to keep the ring going for generations to come.
"I thought that it was really cool for Natalie Portman to choose a ring like this," Gandia said. "She's vegan, she doesn't wear leather. It's wonderful to have a ring that symbolizes the things she stands for."
Read more: Daily News
Wednesday, January 26, 2011
The new diamond exchange replaces the somewhat rundown Opera House premises, but some diamantaires say that space is already at a premium at the Bharat Diamond Bourse in Mumbai’s Bandra-Kurla business district.
After a year in which India’s diamond exports soared back to close to pre-crisis levels, the country’s huge diamond trade received a further boost with the opening of the Bharat Diamond Bourse (BDB) on October 17. After more than a quarter-of-a-century of planning and bureaucratic delays, the new exchange opened in Mumbai’s Bandra-Kurla business district. With the largest diamond exchange in the world in terms of its physical structure, the Indian diamond sector sent a strong message to the rest of the diamond industry that it intends to use the new bourse in its attempts to become not just the largest manufacturing center but as an important trading hub.
But can the new exchange draw in foreign diamond companies that previously were not involved in the Indian diamond business? Will the new one-stop-shop type of exchange with leading security systems and modern facilities bringing together all the elements needed to efficiently transact business persuade non-Indian firms to take space in the exchange?
The planners of the BDB clearly looked at other major diamond centres in putting together the requirements needed for the new exchange. Whereas the veteran Opera House complex in downtown Mumbai had 10-15 buildings and meant visitors, whether buyers or sellers, were forced to continuously move between structures in order to visit clients, the new exchange provides one integrated complex.
Spread over 20 acres with eight interlinked nine-storey towers, it is estimated to have cost $200 million. “We have linked the buildings so that wherever you enter you are inside the bourse and can move between the buildings,” BDB President Anoop Mehta told Antwerp Facets. That is a huge security advantage, especially compared to the situation at Opera House.
“We have also brought all the other important services together under one roof creating a one-stop shop. That is a more efficient way of doing business,” Mehta added.
The security requirements at the new bourse are of a high standard. Visitors to the exchange must show a valid photo ID, and all bags and cases are X-rayed. In addition, approximately 2,500 closed circuit television cameras continuously monitor the complex while face-recognition technology is also in operation. Meanwhile, software that enables office owners to check the cameras outside their offices from anywhere in the world has been deployed.
Mehta said that many hundreds of India’s top diamond firms, accounting for 90 percent of the country’s diamond turnover, had moved into the bourse as of January.
In light of the fact that India's diamond cutting and polishing industry employs around one million people who process more than 80 percent of the world’s diamonds, the new bourse has long been needed to provide a modern image for visitors to the sub-continent’s gems sector. “Up to now workers in Mumbai have been housed in old buildings in southern Mumbai,” said an Antwerp diamond company manager with strong links to India. “Foreign visitors to the Opera House complex were often shocked to see the facilities.”
Mehta said that the BDB would “ultimately help create a Brand India in the world of diamonds. I am not talking about the short-term, but definitely in the longer term this will happen. The new exchange shows how serious we are."
Finding space in the new bourse could be a problem, however, according to Kunal Mehta, head of rough diamond sourcing at Eurostar Diamond Traders in Antwerp. “There is no doubt that it will be much easier to carry out business at the new bourse,” told Antwerp Facets. “You are at the heart of the market in the Bharat bourse compared with the Opera House complex where you had to walk between buildings all the time and wait in long queues in order to get into the various offices.”
“But I am already hearing that space could be a problem in the new bourse. There is always higher demand for space than supply in Mumbai. It’s easier to find space in Antwerp than in Mumbai. We established a new office in Prasad Chambers in Mumbai a few months ago, but it took us quite a long time to find the premises. Office space is an issue because Indian firms deal mostly with smaller goods, which means you need more sorters, and therefore more space to house them,” Mehta added.
Meanwhile, Bank of India branch manager in Antwerp, Arvind Verna, does not believe the new Indian bourse will create a difficult challenge for the Belgian diamond industry. “On the contrary, I believe that by working together the two centres can increase the overall level of business that is being transacted in the diamond business. A lot of polishing takes place in India, and most of the world’s trading is done in Antwerp. Those are facts, and there is no reason why that should change.
“The new Indian exchange, with all services being centralized in one modern set of premises, will make it more likely that foreign companies will open offices in India. India and Belgium can continue to work together very successfully and in that way there will be even more growth. It cannot be in isolation. We are all interconnected,” Verna said.
The exchange was incorporated in 1984 by a group of diamond exporters in the city, but progress was held back by bureaucratic hurdles. With the exchange now open, however, its leaders predict turnover will rise by 10-15 percent annually over the next five years. "We are expecting diamond traders from Israel and Belgium to start trading over here," Mehta said. “The new facilities will help persuade them to move here. Whereas visitors previously had to walk around the public streets of the Opera House exchange, they have complete security here,” he added.
The BDB expects 20,000-30,000 visitors every day. The exchange has parking space for more than 2,200 vehicles, a 1,115 square-metre customs area, another 560-plus square-metre area for clearing agents, banks, restaurants, food courts, landscaped areas and other amenities for staff, visitors, businesspeople and clients.
“Some foreign firms are already in the process of taking space, and I expect that to continue,” Anoop Mehta said. “If you are in the diamond business, especially if you are a large company, then you clearly must have a presence in Mumbai. The city accounts for around 85 percent of India’s total diamond exports.”
Mehta concedes, however, that challenging the other major diamond centres will be no easy task. In addition, it also needs to surpass its domestic rival Surat. Although Mumbai is India’s commercial centre, as well as being its diamond hub, manufacturing, and a substantial amount of trading, is largely carried out in Surat, several hours from Mumbai.
Although the majority of businesses will move to the BDB from the Opera House area, most, if not all, the Surat-based firms are likely to stay put. That is not purely because of the distance, but also because the Municipal Corporation of Greater Mumbai charges a 2 percent tax on cut and polished diamonds while the Surat authorities do not.
This is an important factor for the diamond industry even though the tax rate is relatively low, because much of India’s diamond cutting and polishing industry specializes in low-value, high-volume stones where profits are relatively low. In addition, the pipeline for processing smaller diamonds takes at least three months, if not longer, so the need for a high turnover of goods and lower taxes is vital.
Most of the processing is carried out in Surat, and then the diamantaires move them to foreign exchanges for sale. As a result, the BDB is unlikely to play a part in this process due to the burden of taxes. Mehta says the issue has been taken up with the state and municipal authorities, and he hopes action can be taken.
Monday, January 24, 2011
Gem Diamonds Ltd., a miner of the precious stones in southern Africa and Australia, said sales from its Letseng project in Lesotho rose 62 percent in the fourth quarter after prices surged.
Gem sold $80.7 million of rough stones from the mine at a record $3,291 a carat, the London-based company said today in a statement. That compares with sales of $49.8 million at $1,894 a carat a year earlier.
Global prices of rough, or unpolished, diamonds gained 26 percent last year, surpassing pre-recession highs, as consumption grew in emerging economies and U.S. demand recovered, according to data compiled by WWW International Diamond Consultants Ltd.
“Reports of strong diamond jewelry sales in the important U.S. Christmas season, continuing growth in sales of diamond jewelry in Asia -- specifically China and India -- and the fundamental supply/demand imbalance, has meant strongly rising prices,” Gem’s Chief Executive Officer Clifford Elphick said in the statement.
Sales from the company’s Ellendale mine in Australia rose 37 percent to $30.3 million, according to the statement.
Gem Diamonds climbed 17.5 pence, or 7.1 percent, to 264.5 pence by the 4:30 p.m. close in London trading, the biggest gain since Nov. 2.
Sunday, January 23, 2011
De Beers on Friday announced the sale of yet another diamond mine to Petra Diamonds Limited, this time the Finsch Diamond Mine in South Africa. Petra, which formed an empowerment consortium to acquire the mine, will pay De Beers Consolidated Mines (DBCM) R1.425 billion (~$205 million) in cash for the mine.
According to Petra, Finsch is South Africa’s second largest diamond mine by production and will further diversify Petra’s portfolio by adding a second mine producing more than 1 million carats per annum (Mctpa), becoming the group’s eighth producing diamond mine.
Finsch is expected to produce over 1.5 Mctpa in its first full year of production, more than doubling the Group’s current production of ca. 1.3 Mctpa; it is expected that Group production (including Finsch), will increase to ca. 4 Mctpa by the 2014 financial year and to over 5 Mctpa by 2019.
Petra will hold a 74 percent interest in Finsch via its subsidiary Afropean Diamonds (Pty) Limited. The remaining 26 percent interest will be held by its Finsch BEE partners Sedibeng Mining (Pty) Limited and Namoise Mining (Pty) Limited (commercial BEE partners) and the Petra Diamonds Employee Share Trust, a broad-based trust established for all Petra’s South African employees. The majority of these employees are historically disadvantaged South Africans.
Petra will fully fund the BEE partners’ 26 percent share of the acquisition consideration via loans, which will be repaid by the BEE partners from their share of future Finsch cash flows.
“The agreement to sell the mine to a Petra company follows an open and rigorous selection process that evaluated prospective bidders on a number of criteria determined by DBCM as critical to ensuring the long-term sustainability of Finsch,” De Beers said Friday about the transaction.
“[Petra’s] track record as a hardrock underground diamond miner bodes well for the long-term sustainability of Finsch going forward, and we are confident that this will help ensure continued investment in the town of Lime Acres and the Northern Cape for many years to come,” said DBCM Chairman Barend Petersen.
According to Petra CEO Johan Dippenaar, “This acquisition is a landmark development for Petra and a further progression of our strategy to build one of the world’s leading independent diamond producers.”
DBCM will continue to manage Finsch until the sale, which is subject to a number of conditions precedent, has been finalized. Conditions include obtaining the necessary approvals from the Competition Tribunal, as well as the successful transfer of DBCM’s new order mining right to Petra.
Thursday, January 20, 2011
Multi-commodity miner BHP Billiton reported a decline in diamond production in the fourth quarter as well as for the entire year. The company pinned the production decline in the December quarter on a decrease in ore processed and lower average grade.
The company produced 676,000 carats of rough in the fourth quarter, a 11 percent year-over-year decline. In the second half of 2010, BHP Billiton diamonds mined 1,379,000, a 10 percent decline, the company said in an annual production report published Thursday.
BHP Billiton holds a 80 percent stake in the Ekati diamond mine in Canada and the figures reflect their share of production.
Production continues to be influenced by the variability of ore sources due to the mix of open pit and underground mining.
Edahn Golan IDEX
The diamond trade watchdog, the Kimberley Process (KP) is facing scrutiny over a newly amended deal, which will allow exports from Zimbabwe’s controversial Chiadzwa diamond fields.
KP members this week voted in favour of an amendment to an agreement that was proposed last November in Jerusalem, an agreement that was turned down by the Zimbabwean authorities. Zimbabwe was suspended from exporting its diamonds in 2009 because of rights abuses at the Chiadzwa diamond fields, including violence and smuggling. The country’s Mines Ministry insists that such abuses have stopped, and have threatened to sell the diamonds without KP approval.
This amended agreement is already being critically viewed as a last ditch attempt by outgoing KP chairman Boaz Hirsch to reach a consensus on certifying Chiadzwa stones. Chairmanship of the KP now hands over to the Democratic Republic of Congo (DRC), a known ally of the Robert Mugabe regime. Critics are concerned that this new agreement, to be enforced in the future by the DRC, doesn’t make the issue of human rights a priority.
Of particular concern is the amendment to a ‘violence clause’ that will make it harder for those who allege human rights abuses at Chiadzwa to seek a formal investigation by the KP. Under the amendment, it will now take three, rather than two member countries to endorse a call for monitoring by the KP.
At the same time, business critics say that this ‘loosening’ of the agreement might be prompted by the declining health of the global diamond industry, which has reportedly suffered a blow by the ban on Chiadzwa diamonds. A large percentage of the world’s rough diamonds are mined in the alluvial field and its understood that their absence in the market has had a significant effect on business.
The KP is now waiting on Zimbabwe to approve this deal, which is likely as the Mines Ministry has indicated that it is already in the process of organising fresh diamond auctions.
Wednesday, January 19, 2011
Lucara Diamond Corp. said that commissioning of the AK6 mine in Botswana will start by the end of this year and will move up to full production early in 2012.
Project execution is on target and on budget with commissioning scheduled to start in the fourth quarter of 2011.
The mine is expected to produce 400,000 carats of high-quality diamonds in its first year of operation, the miner said in a statement.
Off-site, the mine access road upgrade is progressing well, and the bulk power-line contract is out to tender with the contract due to be awarded in March so that grid power will be available in July in time for early commissioning tasks. Recruitment of key operational staff is also underway, the firm reported.
Lucara Diamond President and CEO William Lamb said, "The fact that the AK6 project will be in production by year end is an exciting development in the evolution of Lucara as a mid-tier producer of high quality diamonds. This year will be a challenging but rewarding one for all involved with the AK6 project."
Over 300 Diamdel customers and members of Israeli Diamond Industry attended an inaugural reception this week in Diamdel's new offices on the 11th floor of the Yahalom Building in the Ramat Gan diamond exchange.
Limor Rosner, Head of Sales for Diamdel Israel, said the company was "delighted" to move to new premises that would offer its Israeli customers "more comfort, time, and ultimately buying opportunities at our online auction events in 2011."
Diamdel CEO Neil Ventura said that after the company greatly reduced its presence in Tel Aviv following "aggressive restructuring" in 2007, it was pleased to be in a position to engage this key diamond trading market more effectively.
In other news from Diamdel, the company has released data on its online rough diamond auctions for November and December 2010. Diamdel put 130 lots of diamonds up for auction in its second cycle and reported demand across all major client segments and all over the world.
127 diamond businesses participated in Diamdel's auctions in this period, with 58 winning lots. Fewer sightholders participated in the November/December auction cycle, and non-sightholders won 57% of the diamond sales by value.
De Beers, a unit of Anglo American Plc, probably raised rough-diamond sales by 48 percent last year as demand for luxury jewelry recovered, Rapaport USA Inc. said.
Sales may have climbed to $4.8 billion, while production probably rose 36 percent to 33.5 million carats, Rapaport said today in an e-mailed report. That compares with a $5 billion estimate from RBC Capital Markets on Dec. 14.
Russia’s ZAO Alrosa and De Beers, the world’s largest diamond producers, have benefited from price gains following a decline in output and anticipation that demand will outstrip supply. Global production slid 8.5 percent between 2005 and 2008, RBC said, before slumping 30 percent in 2009 as consumption tumbled after the world financial crisis.
The economic recovery has since prompted producers to ramp up output, which probably rose 9 percent last year to 136.5 million carats, according to New York-based Rapaport, the world’s main provider of diamond prices. U.S. consumers “did not completely lose their appetite to shop,” and China and India continued their “rampant growth,” it said.
Demand may rise about 20 percent annually in India and China, accounting for half of global growth in the next few years, De Beers said Nov. 8. Output at the Johannesburg-based company climbed to 15.4 million carats in the first half, while sales advanced to $2.6 billion.
Average prices of certified polished diamonds increased 10 percent in 2010 from a year earlier, while rough-diamond prices probably rose about 21 percent to end the year 90 percent above first-quarter 2009 levels, the weakest diamond-trading period of the recession, Rapaport said.
Alrosa’s sales advanced to $3.48 billion in 2010, the company said Jan. 17. That’s a 90 percent increase from a year earlier, according to Rapaport, which forecasts a 63 percent gain in BHP Billiton Ltd.’s diamond sales to $1.12 billion and a 50 percent increase in Rio Tinto Group’s to $676 million.
Alrosa was probably the largest producer last year after output expanded by 5 percent to 34.3 million carats, it said.
De Beers is scheduled to release sales figures for 2010 on Feb. 11. Lynette Gould, a London-based company spokeswoman, declined to comment on the report today.
Monday, January 17, 2011
Rockwell Diamonds Inc. announced on Friday revenues of $16.6 million in the third quarter ended November 30, 2010. The rise in revenues was not enough to lift the company out of the red, posting a $1.2 million loss for the quarter.
Rough diamond sales of $10.2 million averaged $1,566 p/c compared to $1,048 p/c in the second quarter.
During the third quarter, Rockwell recovered eight large gemstones from its Holpan, Klipdam and Saxendrift operations, bringing the total number of plus 50-carat stones recovered in its current fiscal year to nineteen. In addition to recovering several high quality white and fancy yellow colored gemstones, the following notable diamonds were also produced:
83-carat sawable diamond, with a slight yellow tint with a small spot;
84-carat industrial quality diamond;
63-carat sawable, white diamond with a few spots throughout the stone;
50-carat makeable shape, clean D color diamond; and
72-carat makeable shape, clean H color diamond.
In the nine months to November 30, 2010, Rockwell produced 22,519 carats of diamonds compared to 19,920 carats produced during the same period in the previous year. The average price achieved over the nine months of fiscal 2011 is $1,345 p/c, a significant increase from the $969 p/c received in the previous year.
The company said that the recovery of the global diamond market gained momentum with prices reaching the 2008 levels and jewelry retail sales have been higher than major retailers have expected. “These sales will support a reduction in polished inventory and, consequently, could fuel the trade of rough diamonds,” the company stated.
Rockwell is focused on the mining and development of alluvial diamond deposits in the Northern Cape Province area of South Africa. The company operates three mines - Holpan, Klipdam and Saxendrift - and a bulk sampling evaluation program on the Klipdam Extension property near to the Klipdam operation.
Sunday, January 16, 2011
Zimbabwe will hold two auctions this year to sell its stockpile of diamonds mined between 2006 and 2009
Zimbabwe was granted permission to conduct sales and export diamonds by the Kimberley Process at a meeting in Brussels last year.
The meeting was a sequel to the one held earlier in Jerusalem where a stalemate was reached on the Zimbabwe issue.
However, Zimbabwe did not have a representative at the November 29 meeting because the Minister of Mines was on leave.
"No one attended the Brussels meeting but we got a letter confirming that we had complied with the Kimberley Process's minimum requirements, so Mbanda and Canadile were given permission to go ahead with their operations," said the Deputy Minister of Mines Gift Chimanikire.
Chimanikire said the two companies will go ahead with their operations but under the watchful eye of the Kimberley Process. If their operations fall below the minimum requirements, they could be stopped.
New miners coming into the fray have to submit their papers and within 15 working days - if granted permission - they could start operations.
In the past few years Zimbabwe has been trying to get recognition to sell its diamonds to the international market legally. However, reasons that range from human-rights abuse to political instability earned the Zimbabwean gems the tag of being blood diamonds.
In the past, the chaotic production at Marange diamond fields and smuggling resulted in monitoring by the World Diamond Council.
In July last year, the Kimberley Process Certification Scheme agreed that diamonds from Marange could be sold on the international market.
A new diamond mine in Canada's North is again in front of regulators after a recovery in international markets for the sparkly objects of desire.
Diamond miner De Beers recently filed a mammoth environmental assessment for its long-awaited $600-million Gahcho Kue project and says it could begin production from the mine in 2014.
"It's been a project that's been in the works for quite some time," said De Beers spokeswoman Cathie Bolstad.
De Beers, the majority partner in the project with Canada's Mountain Province Diamonds, originally brought Gahcho Kue before the Mackenzie Valley Environmental Impact Review Board six years ago.
But after the board ruled the project, located about 280 kilometres northeast of Yellowknife, would be the first diamond mine to be subject to a full environmental impact review, the company appealed the decision in court. De Beers lost the case in 2007, and shortly after found itself facing a drop in diamond demand that saw U.S. prices fall between 20 and 30 per cent.
With production cuts at De Beers' Snap Lake mine and other mines cutting back production, Gahcho Kue was pushed to the back burner.
But now, with a 19-volume environmental impact assessment freshly delivered to the regulator, the project is back.
"De Beers has always believed in Gahcho Kue," said Bolstad.
Northern officials say the project's revival is well timed.
The Northwest Territory's two biggest mines -- BHP's Ekati and Rio Tinto's Diavik -- have many productive years left and continue to explore for new ore bodies. But they are starting to enter their sunset years, said Tom Hoefer of the N.W.T. and Nunavut Chamber of Mines.
"They're going to start seeing a reduction in production," Hoefer said.
"I think there is a feeling of maturity here and of being on the other side of the curve."
Diamond mining has become the linchpin of the N.W.T. economy. Deb Archibald of the N.W.T. industry ministry said the territory's three operating diamond mines are responsible for nearly half of its GDP.
"The boom and bust factor is a significant issue for mining communities," she said. "To have Gahcho Kue come onstream would potentially mitigate some of that bust."
De Beers estimates that Gahcho Kue would create an average of 360 full-time equivalent jobs during the 11-year life of the mine and up to 700 full-time jobs during construction. The company says it will spend nearly $1 billion million on goods and services over the life of the mine, much of that in the North.
Gahcho Kue may not be as rich as Ekati or Diavik. Those mines produce diamonds with average values of between $90 and $95 per carat, well above the worldwide average of $72 per carat, and are considered among the most profitable in the world.
But at least one of the project's ore bodies is expected to yield above-average values, at $74 per carat.
The mine's main environmental hurdle is expected to its impact on caribou habitat. The mine is located within the range of several major herds, all of which have suffered serious declines in recent years.
The mine plan also involves draining the 870-hectare Kennady Lake.
It would De Beers' third Canadian mine, after the Snap Lake mine in the N.W.T. and the Victor mine in Ontario.
The review board is currently examining Gahcho Kue's environmental impact statement. Bolstad said the company hopes the regulatory process will be finished in under two years.
Thursday, January 13, 2011
President Mugabe: His party profits from diamond smuggling
Human Rights Watch and others say Zimbabwe's military is illegally selling diamonds to enrich Robert Mugabe's Zanu-PF party ahead of next year's electio
Enos Chikwere spills nine uncut diamonds from a bag at Restaurante Piscina in the town of Vila de Manica in Mozambique near the Zimbabwe border. He says the stones are worth $75,000 and that he bought them from Zimbabwean soldiers. The diamonds come from a mining concession the government seized in 2006 from a private company. The army has used forced labor, human-rights groups say, to mine the gems. The stones are sold illicitly via smuggling.
Chikwere is part of a chain that stretches back to the Zimbabwe African National Union-Patriotic Front (Zanu-PF), the party of President Robert Mugabe, which has won four violent and disputed elections since 2000.
The dealer says his gems come from Marange, Zimbabwe's biggest field, in in the east. By selling the army-sourced stones abroad, the dealers are enriching the 86-year-old President's party ahead of next year's vote, according to Human Rights Watch, Partnership Africa Canada, and the Movement for Democratic Change (MDC), the political party led by Prime Minister Morgan Tsvangirai that governs in a forced coalition with Zanu-PF. Extensive interviews with these human-rights groups, as well as MDC, smugglers, and diamond dealers, provided the information for this story. The human-rights groups in turn have based their assertions on interviews with soldiers, diplomats, diggers, community leaders, and members of government, including the Parliamentary portfolio committee on mines and energy.
Under Mugabe's policy of seizing farmland from white farmers and redistributing it to his followers, the once-prosperous Zimbabwean economy has shrunk drastically. Zanu-PF, in search of a steady source of financing, found it in the mines. "Revenue from the mines is serving to prop up Mugabe and his cronies," Tom Porteous, the U.K. director of New York-based Human Rights Watch, said in an e-mail to Bloomberg News on Dec. 8. "There are real concerns that diamond revenue will be used to fund political violence and intimidation of Mugabe's opponents." In previous political campaigns, Zanu-PF paid youth militia to beat up political opponents and intimidate voters.
The smuggling from Marange benefits Mugabe's party because it is mostly carried out through the military, which controls the mine and reports to Mugabe. Marange diamonds can't be exported legally because the field hasn't met an international certification standard showing that the proceeds don't go to finance conflict. Mozambique, meanwhile, isn't a member of the Kimberley Process, an organization of governments and diamond companies that tries to reduce the number of conflict diamonds in the world.
Mugabe's party denies the allegations of smuggling diamonds to support its campaign efforts. "These are just inventions of the Western imperialists who are trying to discredit Zanu-PF," spokesman Rugare Gumbo said in a Dec. 6 phone interview from Harare, the nation's capital. "There is no corruption at Marange, and Zanu-PF is not using the proceeds."
Soldiers mostly entrust the Marange stones to smugglers who then link up with buyers outside Zimbabwe. The MDC, the coalition partner that Mugabe reluctantly accepted into the government under pressure from other African countries, condemns the military's role. "We need the money to pay civil servants," says Finance Minister Tendai Biti, a member of the MDC. "We must rein in the political elite who are prospering from the stones."
The soldiers are very open in their trading, says a Nigerian dealer in Chimoio, capital of Mozambique's Manica province, who says his name is Colonel Rambo. They give their cut to their superior officers, who surrender a share to politicians, he says. In Vila de Manica, Chikwere boasts that there is no limit to the number of stones he can get. "Don't worry about me and the border," he says. "I have my systems."
Wednesday, January 12, 2011
Saudi Arabian billionaires are trying to buy Prince William and Kate Middleton a famous set of coloured diamonds called the Rainbow Collection for their wedding from an Antwerp dealer.
The 301 stones are the world's largest and finest assortment of coloured diamonds and are owned by gem dealer Eddy Elzas, the Sunday Mirror reported.
The jewels are reportedly worth £60million ($90 million) and would be an extraordinary wedding present for the couple due to get married on April 29.
A member of the Saudi Arabian royal family tried to buy the gems as a wedding gift for Prince William’s parents Prince Charles and Princess Diana in 1981, but Elzas turned down the offer, the newspaper reported.
The nespaper cited a source at the Antwerp-based jewellers as saying that Elzas is now looking to sell them on condition that whoever buys them gives them to Prince William and his fiancee. The source said: "Lots of Middle Eastern investors are keen to buy the collection and give them to William and Kate because it would be a huge badge of honour.
"A deal is now very close to being done and an announcement is set to be made soon. Mr Elzas is due to retire soon so is looking to sell. But he will only sell if they go to William and Kate. He thinks it would be a fitting gift for the couple."
Following the trend seen in other industries, diamond processors are looking for a steady flow of raw material (rough diamonds) and discussing possibilities with diamond mining companies in South Africa.
India has two consortiums of diamond processors and exporters. Diamond India Ltd (DIL), one of these, wants an arrangement with mining firms abroad for either a back-to-back agreement to purchase rough diamonds or a joint venture for mining. DIL members control around a fifth of the country’s total exports of polished diamonds.
At present, DIL imports rough diamonds and even gold on behalf of members. Bulk buying helps efficient procurement. “Now we are looking at possibilities for ensuring supply of rough diamonds and exploring all options,” said Pravin Shankar Pandya, its chairman.
Surat Rough Diamond Sourcing India, another consortium of processors from Surat, is also negotiating with mining firms abroad for procuring roughs for its members. “We are not discussing possibilities of mining right now but definitely looking for a supply arrangement,” said its spokes person..
Rough diamond production and supplies have always remained controlled. After the 2008 recession, all diamond miners had cut production by 40-50 per cent. Despite rising demand, the production cut is yet to be restored. Diamond Trading Company, marketing arm of De Beers, the group that dominates the market, had cut output by half. It has restored only half the cut till now. A leading Russian diamond mining company wanted to sell diamonds in the market last year, but was allowed to do so only to a Russian government treasury company. Those diamonds have yet to come to the market.
In many cases, diamonds sold by miners are cornered by foreign buyers but only to sell to Indian processors, as 90 per cent of processing is still done in India.
This seems to have prompted DIL to try for an arrangement with mining companies. However, Pandya declined to discuss details. If he could close such a deal, it will be the first of its kind in the Indian diamond industry. Globally, many private traders have entered directly or in a joint venture into diamond mining.
Petra Diamonds Ltd., a miner of the stones in southern Africa, said fiscal first-half sales rose 44 percent to $90 million after prices increased.
Petra produced 582,102 carats in the period and expects to achieve its output target of about 1.3 million carats for the full financial year through June, the Hamilton, Bermuda-based company said today in a statement.
Prices of rough, or unpolished, diamonds gained 26 percent in 2010, surpassing highs reached before the world economic slump, as consumption grew in emerging economies and U.S. demand recovered, according to data compiled by WWW International Diamond Consultants Ltd.
Prices for diamonds from the Cullinan mine, Petra’s biggest, rose 38 percent in the period from a year earlier.
“The fundamentals of the rough diamond market remain robust and we anticipate continued strength in rough prices for at least the first six months of 2011,” the company said in the statement. “This trend will be enhanced should 2011 mark a return to global inflation and growth.”
Tuesday, January 11, 2011
The international diamond trade watchdog, the Kimberley Process (KP) is still to make a decision on Zimbabwe’s trade future, after the deadline to discuss a proposed agreement was extended until next week.
KP members were set to meet on Monday to discuss amendments made to an agreement on Zimbabwe, which was rejected by the Zim authorities when it was drafted last year. But it’s understood that the deadline has been moved to January 17th, allowing members more time to review the amended agreement.
Last week Deputy Mines Minister Gift Chimanikire insisted that the KP had given the government the green light to resume sales. But a KP representative has refuted the claims, insisting that “no decision has been made yet.” The comment was made by a spokesperson for the new KP Chairman in the Democratic Republic of the Congo (DRC). The DRC took over the Chairmanship of the KP from Israel on January 1, 2011 with Yamba Mathieu Lapfa Lambang assuming the Chairman’s position.
Chimanikire has dismissed these comments, and has repeatedly said that the green light has been given to resume sales, stating he received a letter from the KP. But Alan Martin from the civil society group, Partnership Africa Canada, which is one of the KP participants, told SW Radio Africa on Tuesday that no letter has been produced.
“He (Chimanikire) had a week to show that letter to the world and he hasn’t,” Martin said, adding: “According to my sources no such letter has been issued.” The state-owned mineral marketing agency in Zimbabwe is reportedly making preparations for two diamond auctions, despite there being no official decision from the KP. Martin explained that the government is actually free to have an auction, and that the only issue would be exporting the stones after they are sold. He said that exports have been suspended until the KP makes an official decision.
“Right now no diamonds from (Chiadzwa) can be exported,” Martin said, calling the issue a “grey-zonal area for the KP.” Zimbabwe was suspended from trade in 2009 over human rights abuses at the Chiadzwa alluvial diamond fields, where the military has been accused of violence, forced labour, smuggling and murder. The KP, which was started to end the trade in blood diamonds, resisted pressure to ban the country completely. Instead, mining authorities were given a six month deadline to fall in line with international trade standards. That deadline was accompanied by a ‘Join Work Plan’ which included the demilitarisation of the Chiadzwa area.
This has not happened and there have been ongoing reports of smuggling and harassment by military officers. Despite this, the KP has continued its lenient treatment of the Zimbabwe situation, allowing two auctions of stockpiled diamonds last year. The sales were meant to pave the way for full exports to resume, but KP members have not reached the necessary consensus to allow this to happen.
Written by SW Radio Africa
Thursday, January 6, 2011
While the impasse over direct sourcing of rough diamonds from Zimbabwe still continues with the international diamond regulator - Kimberley Process (KP) - yet to give an export approval, the Gujarat government has come forward in support of the world's biggest diamond cutting and polishing centre in Surat for the procurement of rough diamonds from African Union and other diamond mining countries.
Chief minister Narendra Modi, who was in the city to inaugurate the gems and jewellery show 'Sparkle-2011' on Thursday, has assured long-term cooperation to Surat diamond industry in procuring rough diamonds from Zimbabwe and other mining countries like Canada.
Criticising the role played by Central Government over the Zimbabwe issue, Modi said, "India is the member country in the KPSC and it is the moral responsiblity of the Indian Government to pitch for the rough diamond requirement of the diamond sector. We will take up the issue of direct sourcing of rough diamonds from Zimbabwe with the Central government."
Modi said diamond consortium - Surat Rough Diamond Sourcing India Limited (SRSDIL) - was set up by 1,500 diamantaires in Surat with the mission to directly source rough diamonds for Surat.
But the dream of Surti diamantaires could not see the light of the day after the Central government failed to represent the rough diamond shortage issue with the Kimberley Process committee.
According to Modi, the Gujarat Government is closely working with the diamond mining companies in Canada to procure rough diamonds for the diamantaires in Surat and in other parts of the state. A delegation of senior government officials and diamond miners from Canada are participating in the Vibrant Gujarat summit to be held on 12 January and 13 January and the direct sourcing of rough diamonds for Surat industry would be discussed.
"Many investors from Gujarat are buying coal mines in Indonesia and other parts of the world. We want the diamantiares to buy diamond mines in Canada and African countries. This will solve the rough diamond shortage issue faced by the industry," said Modi.
He urged nationalised banks to provide door step service to diamantiares in Surat as most of the important banking facilities like Letter of Credit (LC) are only made available in Mumbai banks.
Read more: Gujarat govt to help in direct sourcing of roughs: CM - The Times of India http://timesofindia.indiatimes.com/city/surat/Gujarat-govt-to-help-in-direct-sourcing-of-roughs-CM/articleshow/7231777.cms#ixzz1AII8yqCX
Neo Daniel Moroka, Managing Director of De Beers Botswana, was attacked by a lion on Tuesday. He is in stable condition, according to De Beers. Moroka was attacked on his farm during a search after lost live stock.
Moroka was with a group of trackers on his farm in Tsabong, west of Gaborone, Botswana, when the lion attacked them from behind. Moroka was scratched by the lion before one of the trackers shot and killed the lion.
“We were shocked by the news and are all wishing him a quick recovery,” De Beers' spokeswoman Lynette Gould told IDEX Online.
Wednesday, January 5, 2011
Three companies have been short listed to take-over Ghana Consolidated Diamonds Limited (GCD), at Akwatia, according to a senior government official.
The companies are Great Consolidated Diamond Limited, Jowac Company Limited and Balaji Limited, Deputy Eastern Regional Minister Baba Jamal told GCD workers, according to modernghana.com.
While 30 companies showed an initial interest, only 18 submitted bids and three meeting the criteria to be short listed.
The Divestiture Implementation Committee (DIC) would soon send their choice to cabinet and then to parliament for final approval, Jamal said.
One of the three firms was prepared to invest $70 million and the mineral commission was drawing up an investment plan for the company, he said.
Jamal said the government was against was the illegal mining which had characterised mining in the West African country.
The international diamond watchdog, the Kimberley Process (KP), has reportedly denied giving Zimbabwe permission to carry on selling diamonds from the controversial Chiadzwa fields.
According to the news service for the US based Rapaport Diamond Trading Network (RapNet), a KP representative has refuted the claims made by Mines and Mining Development Deputy Minister Gift Chimanikire.
“No decision has been made yet,” said a spokesperson for the new KP Chairman in the Democratic Republic of the Congo (DRC). The DRC took over the Chairmanship of the KP from Israel on January 1, 2011 with Yamba Mathieu Lapfa Lambang assuming the Chairman’s position.
Zimbabwean media reported on Tuesday that Deputy Mines Minister Chimanikire said that the KP recently wrote to the government, confirming that it could market its diamonds.
“The KP wrote to us communicating that diamond sales should proceed,” Chimanikire is quoted as saying on Monday.
But the KP spokesperson told Rapaport News that the new Chairman is waiting for a response from all KP participants to an amendment to a draft agreement on Zimbabwe’s trade future. That agreement was originally turned down by the government when it was drafted in November last year. The KP Chairman set a deadline of January 10 to get a response from all KP participants about the new amended agreement. The KP spokesperson reportedly said that should the amendment be accepted by the participants, the revised proposal will be forwarded to Zimbabwe for approval.
Zimbabwe was suspended from trade in 2009 over human rights abuses at the Chiadzwa alluvial diamond fields, where the military has been accused of violence, forced labour, smuggling and murder. The KP, which was started to end the trade in blood diamonds, resisted pressure to ban the country completely. Instead, mining authorities were given a six month deadline to fall in line with international trade standards. That deadline was accompanied by a ‘Join Work Plan’ which included the demilitarisation of the Chiadzwa area.
This has not happened and there have been ongoing reports of smuggling and harassment by military officers. Despite this, the KP has continued its lenient treatment of the Zimbabwe situation, allowing two auctions of stockpiled diamonds last year. The sales were meant to pave the way for full exports to resume, but KP members have not reached the necessary consensus on whether to allow full exports to resume or not.
Efforts by SW Radio Africa to contact both the KP and Minister Chimanikire were unsuccessful on Wednesday.
Tuesday, January 4, 2011
Ring Probably Worth Several Years' Salary Of Man, Ring Owner Says:
A couple who lost a 12-karat diamond ring at the Eagle County airport last winter is stunned by one man's honesty.
Janis Ward and her husband live part-time in Cordillera, near Vail. They were on their way to the airport to catch a flight last February when Janis took off her diamond ring to put on hand lotion.
In the hustle of catching the flight, Janis didn't realize the ring has dropped out of her lap and onto the ground until she got home to Miami late that evening.
The ring not only had sentimental value -- it was a gift from Roger commemorating their 30th wedding anniversary -- it had real value. It was a 12 karat yellow diamond ring Roger had purchased at an estate sale, the couple said.
The couple contacted their airline, and then the employees at the Eagle County airport.
"The following morning in the midst of a heavy snowstorm, the county’s curbside staff, along with American Airline employees began searching. They walked the ramps, scoured the parking lot and baggage area and dug through plowed snow, looking for the proverbial needle in a haystack," said Eagle County spokeswoman Kris Friel.
It turns out Mark Epple of Minneapolis was catching a flight at the airport a few minutes later with his wife and saw something shiny in the gutter.
He figured the large bauble was costume jewelry, so he dropped it in his pocket and figured he could deal with it later.
When he got a good look at the dented ring, which appeared to have been run over a car, he realized it was too heavy and shiny to be fake.
So he locked it in the family safe and e-mailed lost and found at the airport saying he believes he found something of value.
He was immediately put in touch with the Wards, who described the ring to him and e-mailed him a picture of the ring they had lost.
A Brinks courier delivered the ring back to the couple, and the original jeweler made some structural repairs. All of the diamonds were still intact.
Roger and Janis were overwhelmed by Epple’s honesty.
"I travel all over the world. This is extraordinary. It never happens," Roger said.
In their phone conversations, Roger learned that Epple, an architect, had recently been laid off of work. The ring, Ward noted, likely has a value equivalent to a couple of years of salary for an architect.
The ring was returned and as a thank you gift, the Wards gave Epple and his family the use of their vacation home in Eagle Valley for a ski trip over the holidays.
Epple refused Ward's initial offer of a reward, saying he knew it was right to return to the Wards what was rightfully theirs. He viewed the incident as a lesson for his three kids. His 11-year-old son, Jacob, had recently had his bike stolen at school, and knew what it felt like to lose a valued possession.
"You try to teach them the right thing. If you return something that belongs to somebody else, you shouldn’t expect to have rewards," Epple said. "I think most people would have done the same thing."
Monday, January 3, 2011
Polished diamond exports rose to $5.9 billion.
The Diamond, Precious Stones and Jewelry Administration reports that polished diamond exports rose nearly 50% in 2010, and that rough diamond exports rose 62%. Supervisor of Diamonds Shmuel Mordechai reported that polished diamond exports rose 48.1% to $5.9 billion in 2010 from $3.9 billion in 2009, and that rough diamond exports rose to $3 billion from $1.9 billion.
"2010 was a year of recovery in everything, in both the import and export of rough and polished diamonds. The growth in 2010 is substantial compared with 2008, but is still 6.5% compared with the 2007 figures. Past achievements have not yet been repeated, but we're definitely heading in the right direction. There is a strong chance that we'll reach the targets of 2007 or 2008 in 2011 or 2012," said Mordechai.
Mordechai also pointed to changes in global markets and the switch of Israeli diamond exports to new markets in the Far East. "This is because the Far East suffered a relative light hit from the global economic crisis compared with Western economies," he said.
Mordechai added that efforts to export diamonds to the Far East would continue in 2011, and that diamond companies would open offices and branches in India, China, Hong Kong, and other countries.
Most Israeli diamond exports go to the US; rough and polished diamond exports to the US totaled $2.4 billion in 2010.