Thursday, April 28, 2011
A Colorado woman visiting Arkansas' Crater of Diamonds State Park this week discovered an 8.66-carat white diamond, the third-largest stone unearthed by visitors since the park – the only publicly-owned diamond prospecting site in the world – opened its doors in 1972.
Park Superintendent Justin Dorsey said that nearly 30 years had passed since the park had yielded a diamond of comparable size – the 8.82-carat Star of Shreveport, which was discovered in 1981. The largest diamond found to date at the park is the 16.37-carat Amarillo Starlight, which was unearthed by a visitor from Texas in 1975.
The lucky prospector, Beth Gilbertson, said that when she first noticed the stone in her bucket, she couldn't believe that something that large could be a real diamond. "I thought it was a piece of glass," she said.
Click here to see the diamond
Gilbertson named her find – described by Park Interpreter Waymon Cox as "icy white with a metallic luster" – the Illusion Diamond.
Earlier this month, a visitor found a 3.86-carat triangular white diamond that he named the Heart of Arkansas. Since the beginning of the year, park visitors have discovered a total of 196 diamonds.
Wednesday, April 27, 2011
In an effort to serve India's growing diamond trade, the Gemological Institute of America (GIA) plans to begin grading diamonds up to 2.99 carats in weight at its Mumbai laboratory, the Gem and Jewellery Export Promotion Council announced today.
Until now, diamonds larger than 1.99 carats were sent out of India to be graded at other GIA facilities.
Managing Director of GIA India and the Middle East Nirupa Bhatt said that since the GIA founded its gemological lab in India in 2008, it had "worked diligently" to reach out to the nation's diamond industry. According to Bhatt, the fact that diamonds of higher carat weights are consistently submitted for grading
indicates a growing awareness of the Mumbai lab among local diamantaires.
Bhatt said that the GIA's decision to grade larger stones in Mumbai was the latest step by the organization to provide its clients with "the highest standards of service."
In addition to issuing Diamond Grading Reports and Diamond Dossiers, the Mumbai lab also grades colored gemstones and pearls.
Tuesday, April 26, 2011
The High Court has confirmed the conviction of a former Debswana boilermaker who was sentenced to five years’ imprisonment for possessing four rough or uncut diamonds three years ago.
Obokeng Kealeboga was found guilty of possessing three rough or uncut diamonds weighing 6.29 carats, valued at P30, 998.00 on October 27, 2007 in Maun, and another rough or uncut diamond weighing 0.45 carats valued at P1, 153.20 on October 29, 2007 at Letlhakane.
He was sentenced to five years imprisonment on each count, to run concurrently.
The evidence led showed that he was a semiskilled boiler maker attached to Debswana from 2000 to 2006; he was based at the Orapa Diamond Mine when the theft occurred.
His co-accused, Samuel Maitapiso, was acquitted and discharged on the first count.
Confirming the magistrate’s conviction and sentence, Justice Terrence Rannowane, said the police who arrested Kealeboga were not haphazardly searching every traveller alighting from the Blessing Bus from Orapa; they had specific information that he would board a specific taxi and they focused their surveillance on the bus from which he would alight and the taxi that he would board thereafter.
“It would have been too much of a coincidence that an innocent man would alight from a specified bus, board a specific taxi and as soon as he got inside the taxi be observed hiding something under the driver’s seat when he was being apprehended, and such a thing being later discovered to be diamonds,” said Justice Rannowane.The evidence suggested that the police were acting on good information and it had paid dividends. The suspect was nabbed and diamonds were discovered where he had just been sitting.
“I have studied the entire evidence led before the court and I am satisfied that it (the court) was right in returning a guilty verdict…. I accordingly dismiss the appeal and confirm the conviction.” The appeal against sentence was apparently abandoned because it was never argued. It was therefore confirmed, the Judge ruled.
Reports from India said its Revenue Intelligence Directorate arrested Zohra Desai, 53, and Prema Desai, 49, both Indian nationals, with a 9.72 kilogram or 48,663 carat consignment of rough diamonds valued at some $2 million
Indian authorities are reported to have arrested two men for smuggling $2 million worth of diamonds from Zimbabwe's Marange field into the city of Surat last week.
Reports from India said its Revenue Intelligence Directorate arrested Zohra Desai, 53, and Prema Desai, 49, both Indian nationals, with a 9.72 kilogram or 48,663 carat consignment of rough diamonds valued at some $2 million.
The two failed to produce the required Kimberly Process certificate for the rough stones, the directorate said. The two are alleged to have smuggled the diamonds from Zimbabwe through Kenya to Mumbai and were caught trying to sell the stones in Surat.
Surat, a world diamond trading and cutting center, was the scene of a similar arrest in 2008 when Robai Hussain and Yusuf Ossely were apprehended with $1 million worth of smuggled Marange diamonds. The two were sentenced to four years in prison.
The arrests in Surat come amid growing tension within the Kimberly Process over the process that should be required for the export sale of Marange diamonds.
Kimberley Process Chairman Mathieu Yamba of the Democratic Republic of the Congo declared last month that Zimbabwe was free to sell its stones. But Western members of the watchdog group objected. An agreement on the matter is under consideration.
Zimbabwean Deputy Mines Minister Gift Chimanikire said preventing smuggling remains a top priority - but added that there are vasts tracts of unprotected diamond fields.
"People are digging illegally in those areas although law enforcement agencies are trying to patrol [them]," Chimanikire said. Chimanikire added that Zimbabwe is trying to phase out military control of the Marange field to meet Kimberly Process requirements.
"In those areas where we are operating, the private security firms are in charge," Chimanikire says, referring to an area mined by five companies from China, South Africa and the United Arab Emirates. "Outside the designated area, we still have problems.”
Chimanikire suggests that the diamonds confiscated in Surat may not have been smuggled out of Marange recently but could be part of a stockpile amassed by a group of diamond-extraction workers fired last year or even before 2006.
But Executive Director Farai Maguwu of the Center for Research and Development in Mutare, near the Marange field, said arrests in Surat come as no surprise.
He said a lack of political will is largely responsible for smuggling of diamonds which he says must be coming from the protected zones due to the quantities involved.
"One can tell that these diamonds are not coming from small scale miners," Maguwu said. "They are coming from companies which are licensed to mine these diamonds."
Maguwu, a prominent critic of the government's Marange development policies, said the volume of diamonds seized also suggests complicity on the part of officials.
"When you look at the security systems at Air Zimbabwe it shows there must be...high-ranking officials who facilitated the smuggling of these diamonds out of the country."
Maguwu called for stronger Zimbabwean institutions to help the government protect the diamond mines, which he says should be generating revenue for the country.
"There are some senior government officials who may be doing their best, but as long as we do not have institutions that can guarantee transparency and accountability, those efforts will come to nothing," Maguwu said.
Wednesday, April 20, 2011
Vancouver-based Peregrine Diamonds has discovered a new kimberlite at its Chidliak project on Baffin Island. CH-51 (so named because it is the 51st kimberlite discovered) was the first target drilled in 2011.
CH-51 was discovered by drilling one vertical core hole from lake ice into a high priority magnetic high anomaly. Kimberlite was intersected over an interval of 101 metres from a depth of 33 to 134 metres underneath 25 metres of water and 8 metres of overburden.
Mantle xenoliths, abundant kimberlite indicator minerals and Palaeozoic carbonate rock fragments were observed in the drill core. From 134 to 171 metres, gneiss with minor kimberlite stringers was intersected and from 171 to 175 metres a macrocrystic kimberlite dyke was encountered. The hole was terminated in gneiss at a depth of 188 metres. Based on interpretation of the ground geophysical data, CH-51 has an estimated surface expression of one hectare.
Diamonds are Gujarat's best friend. The cut and polished diamond (CPD) industry in the State, which manufactures 95 per cent of the diamonds exported by the Indian gems and jewellery industry, will be worth $32 billion, or 1.41 lakh crore by 2012.
Thanks to the ever increasing demand for diamond studded jewellery in US, China, UAE and India and the increase in the valuation of the polished diamonds due to rising prices of rough stones, the diamond industry in the state registered 60 per cent growth by processing polished diamonds worth $26 billion in 2010-'11 compared to $16 billion in 2009-'10.
Interestingly, in just two years time the diamond industry in the state is set to achieve 100 per cent growth by processing diamonds worth $32 billion in 2011-2012 compared to $16 billion in 2009-'10.
Surat is the biggest manufacturing centre in the state, processing about 85 per cent of the cut and polished diamonds. Other centres like Ahmedabad, Navsari, Rajkot, Bhavnagar, Amreli, etc. contribute 10 per cent - a small portion of the cutting and polishing is done in Mumbai.
Industry experts believe the valuation of the rough and polished diamonds is a major factor behind increase in the export coupled with the increasing demand from the key consuming markets in the world. As the trend is likely to continue for the coming months, the diamond manufacturing sector is likely to witness 25 per cent growth in the current year.
"There is a phenomenal growth in the state's diamond sector after the global recession in 2008. The manufacturing capacity has gone up significantly in the last one and a half year," said Chandrakant Sanghavi, regional director of Gems and Jewellery Export Promotion Council (GJEPC).
Sanghavi said the valuation of rough diamonds has appreciated by almost 30 per cent since January-2011, which in turn has appreciated by the prices of polished diamonds by almost 15 per cent. As recovery of rough diamonds from the world mines is stagnant, the prices are likely to go up in the coming months, which is again going to increase the prices of polished diamonds.
Increased manufacturing capacity in Surat and other diamond manufacturing centres will benefit the 8 lakh strong diamond workforce in the State.
In the last one and a half year, the wages of the diamond workers in Surat - there are about 5 lakh workers in the city - have appreciated by almost 20 per cent. In the current year, the wages is likely to appreciate by another 10-15 per cent as the demand for polished diamonds is increasing. Dinesh Navadia, president of Surat Diamond Association (SDA) said, "The diamond workers are paid on piece meal basis. Thus, more work means more money for the workers. Most of the diamond manufacturers have started offering incentive schemes to their workers and this time around the Diwali bonus is likely to increase."
Diamond production by BHP Billiton was hurt by lower average ore grade, an issue that will continue to impact the company's production in the 2012 financial year as well. In the last quarter, BHP Billiton produced 551,000 carats, a 28% year-over-year decline.
In a production report for the nine months ended March 31 published today (Wednesday), BHP Billiton reported production of 1,930,000 carats of diamonds in the last three quarters, a 16% decline compared to last year.
"Production continues to be influenced by the variability of ore sources due to the mix of open pit and underground mining," the company said. "Consistent with the mine plan, BHP Billiton expects lower average ore grades to impact Ekati (Canada) production in the 2012 financial year."
The company, however not only suffered from lower grade, it also processed less ore. In the last quarter it processed 1,122,000 tonnes compared with 1,256,000 tonnes in the March 2010 quarter, a 10.7% decline. In the year to date period, ore processing declined by 5.8%.
In terms of carats per ton (CPT), Ekati produced 0.49 cpt in the last quarter compared with 0.61 cpt the year before, underscoring the lower ore grade.
Tuesday, April 19, 2011
Western calls for an international ban on trading in diamonds from Zimbabwe’s controversial Chiadzwa fields appear to have been silenced after the intervention of India and China.
An agreement was reportedly reached at in Dubai last week to allow the diamonds from Zimbabwe to be sold on the international market.
China and India reportedly managed to persuade the European Union (EU) and the United States to soften their stance on the export of the diamonds paving the way for the sale of the gems.
The Western states had been resisting growing pressure to allow Zimbabwean exports to resume, alleging human rights violations at Chiadzwa were continuing.
But this resistance appears to have been subdued after Zimbabwe got support from countries such as India and China.
Earlier this year, the new chairman of the international trade watchdog, the Kimberley Process Certification Scheme (KPCS), gave Zimbabwe the green light to resume exports.
The Democratic Republic of Congo’s Mathieu Yamba was accused of breaking KP Protocol by not consulting other member countries on the decision, causing the EU and other Western states to immediately call for a boycott of Zimbabwe’s stones.
Yamba has insisted that he will not review his decision until the next KP plenary session, expected later this year.
On Tuesday, Mines and Mining Development minister Obert Mpofu said he was happy about the latest developments saying:
MORE MONEY FOR THE DICTATOR GREAT!!
Sunday, April 17, 2011
The stalemate over rough diamond exports from Zimbabwe is likely to end soon with India and China being successful in brokering a solution with the United States and European Union at the Kimberley Process's Working Group of Monitoring (WGM) meeting held in Dubai on April 14. India and China are member countries of international diamond regulatory body KP Certification Scheme (KPCS).
Top sources in the Gems and Jewellery Export Promotion Council (GJEPC) and the ministry of commerce, who attended the WGM meeting, said a consensual draft of the Joint Work Plan (JWP) has been prepared by the member countries and it was submitted to the KP chair Mathieu Yamba of Democratic Republic of Congo (DRC).
The KP Chair is supposed to send the consensual draft to the Government of Zimbabwe for acceptance in order to resume the exports of diamonds from the Marange diamond field. Zimbabwe's diamonds have been at the centre of controversy for three years now with African partners accusing their Western counterparts of applying unorthodox means to keep out other players from the lucrative diamond trading business.
Surat, the world's largest diamond cutting and polishing centre of the world which imports rough diamonds worth Rs 45,000 crore per annum, is eagerly waiting for the Zimbabwe issue to get resolved. Reason: The Marange diamond field has a capacity of producing more than one million carats of rough stones and this could take care of the demand-supply gap prevailing in the global market.
Last month, KP chairperson Mathieu Yamba gave Zimbabwe the green light to export its rough gems from Chiadzwa diamond fields. However, the decision immediately sparked a debate.
A warning was issued by the US and EU to the diamond companies in India and UAE to not buy the rough stones from Zimbabwe. The US and EU stated that the names of those importing rough from Zimbabwe will be flashed on the government websites and that the Office of Foreign Assets Control (OFAC), which administers all US sanctions procedures, will scrutinise these transactions.
"India and China have played a key role in brokering a solution for Zimbabwe. If the Zimbabwe government accepts the consensual draft agreed by the KP member nations, including US and EU, then it could resume the rough diamond exports," a senior official from GJEPC said.
Thursday, April 14, 2011
Namakwa Diamonds sees its maiden profit this year on a production boost from its closely watched mine in the Democratic Republic of Congo (DRC), its chief executive said.
The diamond producer also expects its Lesotho mine to drive production further in the next fiscal year, contributing at least 300,000-350,000 carats after it comes on stream in September, CEO Nico Kruger told Reuters.
“We are moving our DRC production, we are stepping on the gas there, specifically bringing more of these river-based operations into production, which will create an opportunity for another 200,000 odd carats per year of production,” Kruger said.
Kruger said the company was comfortable with Thomson Reuters I/B/E/S estimates of a pretax profit of $0.13 million for the current financial year.
About 65-70 percent of Namakwa's total output comes from the traditionally stronger second half as rains dominate the preceding half.
“I think we're in for a bumper second half in the DRC,” said Kruger, whose father Tom Kruger founded the company in 1979.
Kruger also expects rough diamond prices to remain high in the near term as demand continues to rise in Asia, mainly from China and India.
De Beers, which controls around 40 percent of the rough or unpolished diamond market, had said earlier this week that rough diamond prices were likely to rise in 2011 on increased demand from the United States, the biggest buyer, and others like India and China.
Namakwa was not affected by the recent disaster in Japan, which accounts for 11 percent of global demand for rough diamonds, CEO Kruger said.
Earlier on Thursday, Namakwa posted an unchanged first-half pretax loss at about $12 million, but remained upbeat on its prospects for the rest of the year.
Revenue for the six months ended Feb. 28 rose 34 percent to $45.5 million.
Johannesburg-based Namakwa's shares, which have gained 63 percent in value over the past year, were trading down 2.3 percent at 53.25 pence at 16:15 SA time on the London Stock Exchange. - Reuters
Wednesday, April 13, 2011
A few leading diamantiares in Surat may face the wrath of the US and EU for importing $250 million — Rs1,100 crore — worth of rough diamonds from Zimbabwe, which is parked at Dubai`s free trade zone.
After the Kimberley Process (KP) chairman Mathieu Yamba cleared Zimbabwe to resume its rough diamond export last month, the US and EU issued warnings to the diamantaires in India and Dubai that it will publish the names of those taking delivery of the Zimbabwe goods on their government website and that the Office of Foreign Assets Control (OFAC), which administers all US sanctions procedure, will scrutinise these transactions.
"Dubai`s free trade zone is the destination from where Zimbabwe diamonds are routed into India. Between November 2010 and February 2011, a huge quantity of Zimbabwe diamonds was purchased by Indian buyers despite knowing about the KP`s embargo. Now, these buyers are feeling the heat as US and EU have started investigation into the diamond deals with Zimbabwe," said a senior trade analyst asking anonymity.
Without quoting the names, trade sources said a huge stock of rough diamond is parked in the Dubai`s free trade zone which belongs to few of the Indian buyers who are learnt to have remitted money to Zimbabwe. The US and EU have been investigating the diamond deals with Zimbabwe in the past few months and it would lead to the diamond stock parked in Dubai`s free trade zone.
Zimbabwean diamonds worth US $160 million had been certified by KP Monitor Abbey Chikane in the month of November 2010 just after the KP Plenary in Israel ended without giving any export clearance to Zimbabwe. Chikane was appointed as KP Monitor for Zimbabwe by Kimberly Process Certification Scheme (KPCS) to look after Joint Work Plan (JWP) agreed by Zimbabwe & KP.
As reported in various news agencies, these diamonds were bought by few Indian buyers and had been stored in Dubai`s free trade zone awaiting KP permission to clear the goods to start journey for Surat, world`s largest manufacturing hub.
The pressure group had demanded the KP to "nullify the certificates` issued by Chikane and notify all diamond trading countries that any shipments would be in violation of Kimberley Process standards.
A pink-purple 10-carat diamond estimated to be worth $15 million went unsold at Christie's auction house in New York on Tuesday.
“While we were disappointed that the 10-carat purple-pink diamond did not find a buyer, top-quality white, blue, pink and yellow diamonds fared very well" at the New York Magnificent Jewels auction, Christie's Americas Head of Jewelry Rahul Kadakia said in a press statement.
The pink diamond was supposed to be the highlight of the auction, as large pink diamonds are unusually rare and command a high price. Prices of pink diamonds have gone through the roof in recent years, and only one in 10 of pink diamonds mined is larger than two-tenths of a carat, according to Reuters.
Christie's auctioned off 224 lots and brought in nearly $32 million for the many colorful and clear gems.
A Fancy Vivid blue diamond sold for $3.7 million, or more than $1 million per carat.
"In all, five top jewels exceeded the US$1 million mark, with heavy competition among both trade buyers and private collectors for colorless diamonds, large gemstones, and signed jewels,” Kadakia added.
Lower grades and bad weather have led to a sharp drop in Rio Tinto’s diamond production in the first quarter ending March 31. The company’s two diamond mines produced 2.498 million carats, falling 29% year-over-year and 22% from the preceding quarter.
In a production report published this morning (Wednesday) Rio Tinto states that Argyle’s production dropped by 35% year-over-year to 1.641 million carats. Lower carat production at Argyle reflected lower grades as well as 14% fewer tonnes processed due to heavy rains in March. The poor weather also led to a temporary stop of construction at the Argyle underground project.
Despite a 25% increase in ore processing, diamond production at Diavik was 13% lower than the first quarter of 2010, with Rio Tinto’s 60% share of production totaling 812,000 carats. The decline is due to the lower grade in the A418 open pit and underground as compared with the A154 open pit.
The site that produced more diamonds was Murowa in Zimbabwe, increasing 55.2% year-over-year. The company’s 78% share of production increased from 29,000 carats in the first quarter of 2010 to 45,000 carats in the first quarter of 2011.
Rio Tinto is continuing its evaluation project in Bunder, India and Greenfield programs in Canada, Democratic Republic of Congo and India.
Tuesday, April 12, 2011
Diamond experts and mining ministers from Africa are convening in Dubai today in potentially groundbreaking meetings on the continent's critical but often controversial role in the industry.
The World Federation of Diamond Bourses (WFDB) summit on Africa follows two days of WFDB presidents' meetings in the emirate. Mining ministers from South Africa, Angola, the Democratic Republic of the Congo and Zimbabwe are set to attend and debate how Africa is changing the global diamond scene.
While prospects for the industry are bright, speakers at WFDB meetings yesterday pointed to a long list of challenges that included a growing focus on ethics in mining and diamond financing, the perceived threat of a diamond supply shortage in the coming decades, the effects on the industry of regional political turmoil and long-standing questions about the Kimberly Process (KP), an industry scheme that certifies stones as conflict-free.
Africa was also high on the agenda. Enormous mines recently discovered in Zimbabwe became a hot topic after reports of violence and forced labour trickled out of the country's Marange diamond fields last summer. Zimbabwe has since been deemed compliant with the KP but some industry experts say the process remains inadequate.
Willy Laeremans, the chief executive of the Antwerp Diamond Bank Asia Pacific, said diamonds needed to have a "whiter than white image" in a world where increasingly sophisticated consumers were demanding better accountability and transparency.
"Today's consumers demand assurances about the integrity of the products they are buying," he said. "Consumers today want to have a good feeling about what they are buying and certainly do not want these products to be associated with child labour, human rights violations, corruption, exploitation of labour or other unethical behaviour."
The diamond industry's soul-searching comes as Dubai rapidly emerges as a trading hub for the stones. Insiders say the emirate could benefit from a rise in appetite among consumers in China and India.
Dubai's diamond trade was worth US$35.1 billion (Dh128.92bn), and the gems routinely rank among its most valuable imports and exports. Diamonds were the UAE's second-most-valuable commodity import last year, according to a Federal Customs Authority statement this month, amounting to Dh41bn.
Peter Meeus, the chairman of the Dubai Diamond Exchange (DDE), said yesterday the advantages of Dubai included its closeness to China, India and Africa as well as cheaper costs for traders setting up in the emirate. The DDE is a subsidiary of the Dubai Multi Commodities Centre (DMCC), an economic free zone for commodity businesses.
"I have to admit two and a half years ago Dubai was a little bit overheating," he said. "Not only in the summer, even in the winter. There was terrible traffic congestion, prices of property went up tremendously, labour costs rose tremendously and, actually, the [global] crisis was a gift for the DMCC. It was good for us, because property prices became so affordable that we saw a rush of people coming here."
The DMCC has a total of more than 3,000 businesses registered to operate within its bounds in the Jumeirah Lakes Towers project opposite the Dubai Marina. More than 725 new companies registered there last year, Mr Meeus said, representing a 40 per cent increase from 2009. There were almost 530 diamond trading companies registered with the DMCC at the end of last year, he said.
Diamond trade volumes globally are spiking even as production registers slower growth. According to Chaim Even-Zohar, a renowned diamond expert, the 270 million carats of diamonds - 54,000kg of the gems - that were traded through Dubai last year was several times the amount sold on the retail market globally.
"Out of the earth last year there was 125 million rough carats, out of which 25 per cent was rubbish," he said. "And worldwide last year the polished sales were around 32 million to 33 million carats.
"[High trading volume] is exciting because every time a diamond goes around, it adds value. It makes more people happy. In my next life I'd like to be a diamond and count my frequent flyer points."
Varda Shine, CEO of Diamond Trading Company (DTC), a rough diamond distribution arm of the largest diamond mining company in the world - De Beers - has dubbed the coming 10 years as 'the diamond decade'.
Shine, who was in the diamond city to inaugurate the jewellery design and manufacturing institute, 'City Centre', of the Indian Diamond Institute (IDI) at Vesu, told TOI, "There will be a gap between demand and supply of diamonds for the coming 10-15 years as the diamond production world over is fast depleting."
Giving a word of advice to the Indian diamantaires on the effective use of the diamond supply for adding value, Shine said, "Amid the gap between supply and demand, it remains to be seen how the diamantaires use the resources. The future of the industry is not about cutting more diamond carats, but to use the carats that exist out there and create value."
Talking about the increase in the rough diamond prices, Shine said that volatility in the diamond prices is due to the gap in demand and supply. The demand for polished diamond is increasing, especially in India, China and US, and this will further fuel the prices of rough diamonds.
"Actually, the diamond prices are not going up any more than the natural reserves like gold and silver. You can take into account the dollar devaluation and the inflation for that matter to compare the diamond prices," said Shine.
Commenting on the ongoing Zimbabwe diamond issue, Shine said that the De Beers group is the big supporter of Kimberley Process (KP). It is important to see that we do not destroy consumer confidence. The consumers would not spend a lot of money on diamond jewellery, if they now that they are mined in the conflict zones. The company's position is that as long as there is no KP there should not be any trade in such diamonds. Hopefully, the Zimbabwe issue is likely to come up for discussion in the KP's Working Group of Monitor (WGM) meeting scheduled in Dubai this week.
Monday, April 11, 2011
Is Costco the new Cartier? 6.77-carat diamond engagement ring goes on sale at discount retailer for a bargain $1million
It's not the first place that comes to mind when shopping for engagement rings, but warehouse retailer Costco is fast establishing itself as a one-stop shop for brides and grooms.
Weeks after unveiling a line of wedding gowns, the retail giant is now selling a single 6.77-carat diamond solitaire ring for $1million.
But for those balking at the seven-figure sum, it's still a bargain, as the D colour, Internally Flawless diamond has been valued at $1.6million by the International Gemological Institute.
Though it is not the first time the retailer has stocked diamonds, it is the first time it is selling one of such a high value.
The store insists there is a market for the luxury item because Costco is popular with upscale shoppers in search of a bargain.
Costco executive Richard Galanti told WalletPop.com: 'Why not? We have upscale customers who know that we offer value and an unconditional guarantee.'
He added: 'Within the diamond category, we do a substantial business, selling about 100,000 carats of diamonds a year.
'Among the highest priced diamond rings that we've sold each year, those are generally in the $200,000 to $300,000 price range.'
He also noted that in the U.S., the average annual household income of Costco shopper is $95,800, compared to $69,800 for all households - and that over 41per cent of Costco shoppers earn more than $100,000 annually.
He explained that while high-quality diamonds are easily found elsewhere, Costco is 'going to mark them up a lot less.'
A statement on the company's retail website assures potential buyers: 'Our team of Graduate Gemmologists inspects every diamond to ensure it meets the strictest quality standards in the industry in cut, colour, clarity, and craftsmanship.'
Costco, now the largest membership warehouse chain in the U.S., began in 1983 offering discounts in exchange for buying food and other items in bulk.
Today, clothing, home appliances, furniture, electronics and fine wines are among products stocked on store shelves.
Just last month, the retail giant expanded to wedding gowns in a collaboration with bridal designer Kirstie Kelly, who will sell six exclusive dresses at around 40 per cent of their usual retail price.
Sunday, April 10, 2011
The visit of Varda Shine, chief executive officer, Diamond Trading Company (DTC) - a rough diamond marketing arm of the global giant De Beers - in Surat on April 12 is seen as an important development by diamantaires, especially the DTC sightholders (customers).
Shine, who is visiting the diamond city to inaugurate the world class diamond and jewellery institute 'City Centre' at Vesu, is likely to touch upon some of the key issues prevailing in the global diamond industry such as the rough diamond shortage and increasing prices, Kimberley Process's (KP) approval to Zimbabwe to export rough diamonds and the warning issued by the United States and the European Union, the upcoming renewal of DTC sightholder contracts for the period 2012-2015.
In the DTC's March sale, prices of rough diamonds across most categories of the De Beers rough production were increased. The price hike was significant in the smaller Indian goods by 30 per cent. The hike was the second to be implemented by DTC this year after the company raised prices by an average of 7 per cent at its February sale in London.
Given the increases, sightholders have noted that the rough market was currently in a bit of a confused state and that dealers are not sure how trading will develop moving forward. Premiums on DTC diamond boxes have reportedly softened slightly, but are still trading relatively high.
Furthermore, the recent announcement from DTC about reducing the minimum requirement to apply for being one of its recognized suppliers worldwide has spread joy among the diamantaires in city.
The new scheme has fixed a bit lower threshold limit of rough diamond trading for the past three years to $50 million from $60 million earlier.
"The decision will allow more diamantaires to apply for the supplier of choice (SOC)," Aagam Sanghavi of DTC sightholder company Sanghavi Exports said.
Industry sources said the issue of Surat Rough Diamond Sourcing Limited (SRDSL) formation by few of the leading DTC sightholders in Surat to directly source rough diamonds from Zimbabwe is likely to come up during Shine's visit.
"Despite the fact that KP has cleared Zimbabwe to export its rough diamonds, the US and EU have opposed by issuing warnings to the diamond cutting and polishing centres like India and Israel. The SRDSL was formed by DTC sightholders to source rough diamonds from Zimbabwe and now they may face the heat," a diamantaire requesting anonymity said.
Thursday, April 7, 2011
The Diamond Trading Company (DTC) has been holding talks with diamond manufacturers on how to make their Botswana business more economical, the Mmegi.bw website reports.
DTC CEO Varda Shine told Mmegi in an interview that to cover Botswana's higher labor costs - $65-$100 per carat compared to prices as low as $15/carat in places like India – manufacturers would need to buy rough diamonds with a correspondingly high value.
Shine noted that the DTC was working to find ways of allowing the manufacturers to run economical businesses while still creating employment.
"Our first priority is to make the businesses run profitably before they can expand," Shine told Mmegi.
The diamond industry in Botswana and elsewhere is still trying to recover from the price imbalance sparked by the financial crisis of 2008. Analyst Chaim Even Zohar, who spoke at the diamond beneficiation pitso that opened this week's International Diamond Manufacturers' Association Presidents' Meeting, said that as the industry recovered, rough prices bounced back and bounced higher than polished prices, cutting profit margins for manufacturers.
International diamond sorting and polishing firm, Pluczenik Botswana, is expanding its operations in Botswana by building a more spacious and sophisticated facility at the Diamond Technology Park in Gaborone.
The Belgian company first set foot in the Botswana diamond industry in 2006 when they opened their sorting facility that was inaugurated by former President Festus Mogae.
Speaking at the ground-breaking ceremony of the P26 million factory, Pluczenik group CEO Chaim Pluczenik said they will be bringing in state-of-the-art polishing equipment once the factory becomes operational in December this year. He said they will employ 300 people in addition to the 150 already employed by the first factory.
Pluczenik said they will be bringing international experts to supervise and transfer their skills to Batswana. They will continue to source rough diamonds from DTC Botswana and augment their supply by sourcing from overseas in order to help the country in its quest to be a big diamond centre.
"We have been in the diamond industry for over 70 years," Pluczenik said. "We want to continue being a world leader and we hope our expertise in the industry will be of great benefit to the people of Botswana." Officially launching the new factory, the Acting Vice President Ponatshego Kedikilwe said it was a commendable feat by Pluczenik to invest in the new project.
Kedikilwe, whose substantive post is Minister of Minerals, Energy and Water Resources, said through the project, the company has reached another milestone in bettering the lives of Batswana as well as enhancing the diamond industry.
"It is very encouraging to see more companies joining in to turn the country from being a leading rough diamond producer by value into a leading diamond centre. It brings hope for poverty reduction, job creation and overall improvement of the economy," he said. "I can assure you the government will always support projects of this nature."
However, Kedikilwe said despite figures showing signs of recovery from the global recession in the diamond industry and a general consensus of a ray of hope of improvement, it remains uncertain that the industry will reach the pre-recession era.
The Managing Director (MD) of DTC International, Varda Shine, also commended Pluczenik for having been a leading Sightholder of DTC for the past 70 years. She said it is important for diamond firms that come to do business in Botswana to consider appropriate diamond beneficiation programmes so they can enjoy a good working relationship with Batswana.
Shine said DTC has been building fantastic relationships and helping facilitate diamond beneficiation for the country and is hopeful Pluczenik will fully support the efforts.
The new factory was initially intended for opening in 2008, but the project had to be shelved due to uncertainties occasioned by the global economic recession. The Pluczenik Group has operations in Antwerp, Detroit, Hong Kong, Mumbai, New York, Shanghai, Shenzhen, Tel Aviv and Tokyo.
Wednesday, April 6, 2011
Diamond activist Farai Maguwu, director of the Center for Development and Research in Mutare, said pressure must be put be on Harare to ensure transparency and accountability in Marange
The European Union is seeking an emergency session of the Kimberly Process working group on monitoring following the move by Kimberley Process Chairman Mathieu Yamba of the Democratic Republic of Congo to clear Zimbabwe's Marange diamonds for sale.
British Minister of State in the Foreign Office Lord Howell said Yamba’s authorization was invalid because it violated Kimberley’s principle of consensus decision-making.
Yamba’s move disconcerted Western countries and diamond industry members who said the Kimberly Process had not agreed to allow the sale of Marange rough stones. The World Diamond Council told its members not to buy Marange diamonds.
But Yamba said he will not reverse his decision until Kimberley’s next formal meeting.
Howell said the EU will hold the meeting as a matter of urgency to ensure Harare does not export uncut diamonds under the cover of Yamba’s recent notice.
"The EU also expressed concerns about the uncertainty it creates for KP participants, the diamond industry and consumers, and urged the chair to clarify the situation as a matter of urgency," Howell said.
Howell spoke Tuesday as a delegation of members of the African Diamond Producers Association visited Marange ahead of a summit expected to cover Marange issues.
Zimbabwean Mines Minister Obert Mpofu said Harare hopes the producers will advance “an African agenda” putting producer countries in a stronger bargaining position.
"Our view is that the chair's intervention must be supported for initiating measures which restore the fundamental principles of the KP with regard to respect of equality, mutual benefits and consensus," said Mpofu. He added that Zimbabwe would continue to "enhance its Kimberley Process compliance, particularly with regard to Marange."
Diamond activist Farai Maguwu, director of the Center for Development and Research in Mutare, near the Marange alluvial diamond field, says pressure must be put be on Harare to ensure transparency and accountability in the military-controlled district.
Economist John Robertson said political pressure was exerted on the DRC Kimberley Process chair to clear Marange diamonds for export sale.
Tuesday, April 5, 2011
After a successful two months since its Bangalore launch, De Beers, the world’s premier diamond mining company, introduced its iconic jewellery brand, Forevermark, in Mumbai this Monday. With a vision to make this the leading global brand by the end of this decade, it is important to see how consumers respond to it in India, say Binita Cooper, MD, and Stephen Lussier, CEO, Forevermark Diamonds, in an interview with Dilip Kumar Jha. Edited excerpts:
How is Forevermark different from India’s existing renowned brands?
Forevermark will offer Indian diamond purchasers quality, integrity and inspiration. These are the world’s most carefully selected ones, bearing a unique inscription each at its heart, which is a promise that the diamond has been carefully selected to meet standards of quality and integrity. Invisible to the naked eye, the inscription can be seen using a special Forevermark viewer (only found in authorised Forevermark jewellers). It is also recorded on the personalised Forevermark identification card accompanying every diamond under this category. Less than one per cent of the world’s diamonds are eligible to become a Forevermark diamond. Each one has been responsibly sourced and nurtured at every step of its journey from mine to fingers. Only a select group of Master Diamantaires are eligible to cut and polish Forevermark diamonds. Only a few, exclusive, jewellers, each passionate about creating the finest designs inspired by these exceptional diamonds, are able to sell at retail.
Why a launch in India before the US, despite the latter being the world’s largest jewellery consumer?
Constituting nearly 40 per cent of global jewellery consumption, the US is recovering faster than we expected from the global economic slowdown which started in 2008. We have formulated a team for studying the stupendous growth in jewellery sales recorded in the US last year and so far this year. But the overall growth in the economy and consumers’ aspiration towards diamond jewellery is unique here. Hence, we thought of a launch in India.
Our experience with the initial launch in Bangalore two months ago is excellent. Hence, we are also looking at expansion in other markets. Although identifying of partners is an ongoing process, we initially launched Forevermark with four partners in Bangalore and 10 in Mumbai. Later this week, we are launching the brand in New Delhi, with 10 partners. In the second half, we will be launching it in Chennai, Hyderabad and Kolkata.
How do you see the change from consumers’ traditional jewellers?
Branded diamond and gold jewellery is growing here, along with gold jewellery from traditional jewellers. Traditional jewellery sales are not going to die here, due to consumers’ inherent faith in local jewellers. But consumers’ affinity towards diamond jewellery has been unique, which is set to boost diamond jewellery sales in India.
What makes Forevermark so unique?
We rigorously pick these. De Beers selects the diamond suitable for categorising under Forevermark and sends such pieces to select diamantaires for cutting and polishing. After the cut and polish, diamantaires send pieces back to our unique and most modern lab in Antwerp, which rejects around 10 per cent. The remaining 90 per cent are sent back to diamantaires for inserting into jewellery. The selection process is unique.
How much premium does it fetch over existing leading brands in India?
Nil to 10 per cent. But there is no comparison between the existing leading brands and Forevermark, and the selection criteria are different. A Forevermark diamond is selected only on two criteria, quality and integrity, that are never compromised.
What is the entry size and price?
Instead of we fixing the price for jewellery manufactured by different diamantaires, the pricing is decided by the manufacturer. What we ensure is the quality and integrity for the world’s most carefully selected diamond. Although price differs from jeweller to jeweller, yet consumers need to pay a minimum Rs 30,000 for the smallest, 14-points (100 points=1 carat) Forevermark jewellery, with the sky the upward limit. We also want our partners to grow with us. The jewellery looks initially for high-end consumers, but others can also afford it to look beautiful and distinguish themselves from the rest of the crowd.
What factors are you looking at for your success in India?
Looking at the experience in the first two years of launch in thew Far East, China, Hong Kong and Japan, digital marketing seems the most effective publicity tool for making the production popular. However, we would not hesitate on publicity through other means, for which we have a huge marketing spending plan in the pipeline.
Your expectations from the Indian market?
We are very optimistic. We expect to generate 15-20 per cent revenue from here in the next five years.
Experts believe 2011 will be yet another year of poor profitability for the country's 16 polishing and cutting firms as their margins remain stifled by the widening gap between rough diamond and polished prices.
The price imbalance, which was triggered by the recession in late 2008, means the firms pay more for rough diamonds than they are able to sell them for to jewellers after they cut and polish them.
Experts have explained that while the recession dropped both rough and polished prices, the former had recovered faster and to higher levels than the latter, eroding margins and pushing firms into the red.
Yesterday, renowned diamond guru Chaim Even-Zohar said 2011 was likely to present a further squeeze on margins for cutting and polishing firms, which are collectively known as diamond manufacturers.
Even-Zohar's research suggests local manufacturers recorded losses in 2008, which mildly improved in 2009 due to lower rough prices. Research indicates the firms barely broke even last year.
"The margins will narrow this year, but in the long-term, demand will increase faster than supply, giving us good hope that polished prices will firm and the gap with rough will improve," Even-Zohar said at the inaugural Diamond Beneficiation Pitso in Gaborone yesterday.
"We have seen that globally, rough prices are increasing at a greater pace than polished and by necessity, this trend reduces the profit margins of every diamond manufacturer.
"However, the manufacturers here were handpicked by De Beers and the government and are among the best in the world. If anyone has a chance to meet the challenge, it's the companies here.
"Even if on paper there's no profit, I don't foresee any likelihood that any of them will close doors. In addition, these firms are part of integrated international organisations which provide them with support."
Estimates provided by diamond consultancy, Tacy Ltd, underline the position diamond manufacturers find themselves in worldwide. According to Tacy, demand for rough diamonds could rise by 20 percent in 2011, compared to a 9.9 percent rise in demand for polished.
The Israeli-based consultancy estimates that demand for rough rose by 66 percent last year, compared to an increase of 38 percent for polished stones. Even-Zohar said the dramatic recovery in rough could be attributed to pipeline replenishment which, however, will be less of a factor in 2011.
While the price imbalance is global, the local 16 cutting and polishing firms' margins are particularly affected due to factors such as the higher cost of production and industry-wide dependence on credit.
"Looking at the industry here, 'break even' is a nice phrase, but the industry is not at break even. There's a great challenge of how to improve the bottom line and make the business sustainable," said Even-Zohar.
The President of Botswana Diamond Manufacturers Association (BDMA), Mervin Lifshitz, concurred: "We have very little flexibility," he said. "We live in a tight space between rough prices which are influenced by market demand and polished prices over which we have no control.
"We have competition from New York, Belgium, and Asia and the challenge that faces us is to remain competitive.For this industry to continue, large sums of money needs to be continuously invested in methodology, technology and training.
"The 16 firms here have invested heavily in these areas and their failure to continue to do so will lead to Botswana falling in competitiveness."
The pitso provided a platform for the first audit of the cutting and polishing industry five years after the government licensed 13 factories and after the initial three that were operational prior to 2004.According to the pitso, the fledgling industry's biggest challenges are sustainability and growth.
Monday, April 4, 2011
Having already launched in India at Bangalore in January this year, De Beers today presented its Forevermark branded diamonds in Mumbai, the country’s largest and most affluent urban market.
At a launch function hosted by Forevermark CEO Stephen Lussier, and featuring Bollywood actor Rani Mukherjee, the brand showcased the Steinmetz Yin Yang, billed as the world’s largest pair of D/Flawless round brilliant diamonds at 35.61 and 35.77 carats. They were cut from two individual rough diamonds, each initially weighing over 100 carats.
Lussier told the press that it was significant that the brand had been launched in India even before it had entered the U.S. market. “The three biggest markets for us are the U.S., China and India,” he said, adding, “Given its extremely rapid growth, India might even eclipse China as a market for us.”
Binita Cooper, Forevermark managing director for India, said the brand had evoked a strong and positive response in India. “Even men have taken to the brand,” she told IDEX Online. “Men are more rational when it comes to diamonds and they like the idea of the certification that the brand provides the product.”
Botswana, the world's largest producer of diamonds, told international jewellery makers Monday it was ready to create conditions to entice them to set up shop in the country.
Botswana is committed to slashing red tape for cutting, polishing and manufacturing jewellery, acting minerals minister Ponatshego Kedikilwe told a meeting of the International Diamond Manufacturing Association.
"Our aspirations are to see as much beneficiation as possible done locally and on a sustainable basis," he said. "We are willing to do what it takes to ensure that an environment that enables beneficiation is created."
"Beneficiation" has long been part of government efforts to diversify the economy by encouraging the growth of businesses that add value to diamonds, rather than simply exporting uncut stones.
Investors have complained about landlocked Botswana's infrastructure, including weak Internet access, and a shortage of skilled labour for the jewellery trade.
Kedikilwe said government was working to simplify the visa process for foreigners seeking to open jewellery businesses.
A new factory is expected to open in December, once final government clearance is received, operated by Shrenuj, an Indian company that is one of the 16 polishing and cutting firms already working in Botswana.
The firm says it will employ 70 people to start, with plans to grow to 300 employees, mainly making jewellery for the United States. Botswana has preferential access to the US market under an African trade deal.
Botswana's downstream diamond industry currently employs nearly 3,000 people.
The country's economy was hard-hit by the global recession as diamond demand plunged. The economy shrank by 4.9 percent in 2009, but turned around with 7.6 percent growth last year.