Thursday, June 30, 2011

Zimbabwe and its diamonds Forever dirty




Robert Mugabe is being favoured once again, to the detriment of his people

THE Kimberley Process (KP) is in danger of collapse. Set up in 2003, the system is supposed to end the trade in “blood diamonds” which illicitly finance civil wars. But its Congolese chairman has unilaterally decided to let sales from Zimbabwe’s disputed Marange diamond fields resume. America, the European Union, Canada and Israel are hotly contesting the move. Rulings by the 49-member body, representing 75 diamond-producing and -trading countries, are supposed to be unanimous.

Ever since diamonds were first discovered in a 60,000-hectare site in Marange in eastern Zimbabwe in 2006, reports of killings, torture, corruption, bribery, looting, smuggling and political skulduggery have been rife. The stakes are enormous. Tendai Biti, Zimbabwe’s finance minister, has described the field as “the biggest find of alluvial diamonds in the history of mankind”. Potential revenue has been estimated at $1 billion-2 billion a year. One mining expert involved in the area reckons it is “much, much more”. The IMF put Zimbabwe’s entire GDP last year at $7.5 billion.

Following the announcement of the find by a London-registered company, African Consolidated Resources (ACR), tens of thousands of locals and foreigners rushed to the area to try their luck. Diamonds were being scooped up by the handful. President Robert Mugabe’s ruling Zanu-PF party quickly moved to claim the fields as its own, cancelling ACR’s prospecting rights and sending in the army to oust the panners and local inhabitants and to seal off the area. At least 200 people were killed, many of them by bullets fired from army helicopters. Some evicted civilians were then forced back by soldiers to mine the diamonds for a pittance.
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In the face of growing reports of human-rights violations, the KP imposed a ban on all further sales of Marange diamonds. But production, mainly by two South African outfits in joint ventures with the Zimbabwean government, continued. By June last year 4.6m carats, worth $1.7 billion—money the cash-strapped government sorely needed—had been stockpiled. A month later, following a report by KP’s monitor, Abbey Chikane, a South African, claiming that Zimbabwe was now fully complying with KP rules, two small sales of Marange diamonds were permitted, though no more since then.

On June 24th, however, at the end of a four-day KP meeting in Congo, the body’s chairman, Mathieu Yamba, announced that the two Zimbabwean-South African joint ventures, Mbada Diamonds and Marange Resources, could resume diamond sales. NGOs, who have continued to monitor the disputed fields, are aghast. They say that human-rights abuses, smuggling and other blatant breaches of KP’s rules are still going on, with most of the proceeds going into the pockets of army leaders and Zanu-PF bigwigs. Mr Biti says the Treasury has seen barely a cent.

Western members of the KP insist that Mr Yamba’s announcement, not having been approved by the required consensus, is invalid. They, together with the World Diamond Council, are asking international diamond traders not to touch Marange diamonds. But they may not be able to stem the flood of illicit gems pouring out of Zimbabwe, to be snapped up in Bahrain, China, India and Lebanon, among others. Many poor countries have long regarded the KP as a plot by Western countries to control the diamond trade—and thereby prices. This could sound its death knell—and help Mr Mugabe keep himself and his party afloat.

Wednesday, June 29, 2011

Elizabeth Taylor's Jewels Up For Auction




Elizabeth Taylor's famed jewels are going up for auction later this year. Want to buy a bauble? Break out your credit cards.

Elizabeth Taylor jewels are going on sale in DecemberElizabeth Taylor was known for her love of jewels -- her perfume was named Diamonds, after all. Now, fans have the opportunity to get their hands on her baubles when they go on sale at Christie’s auction house later this year.

Taylor’s jewel collection is worth an estimated $145 million and includes a ruby and diamond Cartier necklace, the La Peregrina Pearl redesigned by Cartier, a heart-shaped Taj Mahal diamond and a 33.19-carat Krupp diamond given to her by her beloved husband Richard Burton. She reportedly wore that diamond every day.

Don’t have the cash to drop on a Taylor jewel? Join the club. Luckily, the Elizabeth Taylor Collection will go on tour for three months before the sale date, according to Christie’s. The tour will end at the New York auction house where it’ll be on display for another 10 days before going up for auction on December 13.

"[This collection] will bring us closer to the essence of Elizabeth Taylor's unique spirit, and promises to inspire admiration, delight, and at times, sheer wonder, in all who come to see it," said Marc Porter, the chairman and president of Christie's.

The best part: All of the proceeds are going to the Elizabeth Taylor AIDS Foundation.

We’re already making plans to see the jewels on tour. We’re just hoping they have a 'try it on' option, because we really want to imagine what Taylor’s fab life was like.

Tuesday, June 28, 2011

Middle East super-rich power diamond sales




Released last week, Merrill Lynch's World Wealth Report 2011 also suggests that rising numbers of the super-rich in the Middle East were behind the high growth seen in rough and polished diamond prices last year.

De Beers estimates rough prices rose by 27 percent in 2010, while other producers such as Gem Diamonds reported annual increases of up to 70 percent on certain classifications of stones during auctions last year.
Merrill Lynch research indicates that part of this growth was due to increased uptake by the wealthy or High Net Worth Individuals (HNWI) who chose to keep 22 percent of their "investments of passion" in jewellery, gems and watches.

In this sector, large diamond jewellery was particularly popular, offering the prospects of returns for wealthy individuals seeking safe havens from other risk-ridden investment avenues.

The report reads: "Jewellery, gems and watches accounted for 22 percent of all investments of passion in 2010.

The Middle East HNWIs had the highest share at 29 percent, but that was down from 35 percent in 2009."Record prices for diamonds at international auctions in 2010 exemplified the growing trend among the world's HNWIs to see large diamonds as a safe and high-growth investment alternative.

"Current demand at the highest end of the market appears to be largely from Russia and the Middle East, but demand from Chinese and other Asia-Pacific investors is also growing fast." The 2011 report indicates that while investments of passion or emotional and appeal related investments are usually lifestyle related, more HNWIs viewed these investments as ways of preserving and growing capital over time.

Diamond demand was also underpinned by the higher numbers of wealthy individuals in the Middle East and Asia-Pacific regions, who grew by 10.4 and 9.7 percent respectively. Middle East growth was the second highest globally for the period under review, while Asia Pacific's super-rich are now the second largest in population behind North America and ahead of Europe for the first time.

The Merrill Lynch report mirrors De Beers' projections of future market dynamics, which point to an eastern shift in diamond demand in the medium-term. De Beers expects that by 2010, China, Hong Kong, Taiwan, India and the Gulf region will account for nearly 40 percent of consumer demand for diamond jewellery.

According to its projections contained in the 2010 results announcement released in February, the diamond giant still expects the United States to play a major role in demand, although to a slightly lesser extent. De Beers' statistics also showed that China and India's demand for diamond jewellery grew by eight percent in 2010, compared to seven percent for the US.

Growing demand for diamond jewellery, rising numbers of HNWIs and more investment of passion are good news for local producers such as Debswana and Firestone as these point to stronger rough prices, higher production, higher plant utilisation and lower production costs per unit going forward.

Monday, June 27, 2011

Indian diamond processors want early solution to Kimberly impasse




The Rs 2,50,000-crore Indian diamond processing industry is worried over the growing impasse within the Kimberley Process (KP), the global body legalising exports of rough diamond.

KP is a 27-member group consisting of producers and consumers of rough diamond. India, which processes diamond worth $15 billion annually, around 80 per cent of the rough variety mined globally, is a member of the bloc.

The impasse between the chair of KP and its members is over allowing Zimbabwe to export rough diamonds. The US and Canada say Zimbabwe is mining “blood diamonds” using inhuman practices, and hence should not be approved by KP.

It is the first attempt by Zimbabwe to export rough diamonds.

KP had earlier allowed Zimbabwe to export rough diamond, and at least two consignment reached the Dubai port. But, because it was not certified by the KP committee, the consignment is hanging with the Dubai government. Local diamantaires have already noticed migration of jewel lovers from diamond jewellery to pure gold jewellery due to rising cost of natural diamond. They fear that the ongoing battle within KP may increase prices of rough and polished diamond varieties, which may drive consumers further.

According to Sanjay Kothari, vice-chairman of the Gems and Jewellery Export Promotion Council (GJEPC), the apex trade body in the country, rough diamond prices have been rising 8-10 per cent almost every month since early this year, taking the overall increase to 35-40 per cent so far.

Factors like the absence of new mines and mining companies deciding to continue with low production may raise prices further in the coming months. Jewellery processors generally procure rough diamond in August to cut and polish to manufacture studded jewellery items for festivals like Dusshera, Diwali and the New Year.

“We, therefore, want the chairman and members of KP to sit for negotiation and resolve the rift through give and take. The government of Zimbabwe must agree to the KP certification process and members to agree sourcing rough diamond from these mines,” urged Praveen Shankar Pandya, chairman of Diamond India Ltd and managing director of Revashankar Gems Ltd.

In the last KP meeting on June 23 in Kinshasa, the chairman of the KP Committee, Mathieu Yamba Lapfa Lambang (Yamba), allowed exports of rough diamond from the compliant mining operations of Marange Resources and Mbada in Zimbabwe with immediate effect. The KP Committee requires all members to agree on an issue to pass a resolution unanimously to make it a law.

Yamba clarified in an order that in case the monitoring team, appointed by the KP Committee, did not arrive at a consensus, the chair of KP would resolve the matter. “Since the supply of rough diamond has become scarce due to limited exploration in the last decade and has the potential for further squeeze in coming years because of no identification of new mines, supply from Zimbabwe will ease tightness to a certain extent,” Pandya added.

Varda Shine, CEO of Diamond Trading Company (DTC), the marketing arm of De Beers which produces about 40 per cent of the world’s rough diamond supply, had earlier suggested the company’s sightholders should not participate in the sale of ‘blood diamonds’ until the rift got over. Zimbabwe currently produces rough diamond worth between $500 million and $600 million which can increase to even $1.5 billion in case official sale is allowed. India processes diamond worth $15 billion annually, around 80 per cent of the rough variety mined globally, and is ready to procure the entire quantity excavated in Zimbabwe.

Sunday, June 26, 2011

Zimbabwe diamond export ban ends, despite objections




The international group that monitors 'blood diamonds' OKs exports from the Marange mining fields despite rampant human rights abuses. The U.S., Canada and European Union are protesting the decision.

The international organization that monitors conflict diamonds has agreed to allow Zimbabwe to export diamonds from its vast Marange mining fields despite rampant human rights abuses in the area.

The decision by the Kimberley Process — as the regulatory group governed by diamond-trading nations is known — threatens an end to world consensus over blocking so-called blood diamonds from the market and makes it impossible for consumers to have confidence that the diamonds they buy did not contribute to violence, said some participants in the group's meeting this week in Kinshasa, Democratic Republic of Congo.

On Thursday, Kimberley Process Chairman Mathieu Yamba said Zimbabwe would be allowed to export rough diamonds from Marange under a system of minimal human rights oversight, participants said. The regulatory group's decisions are supposed to be made by consensus, but the United States, Canada and the European Union swiftly protested.

"Until consensus is reached, exports from Marange should not proceed," the U.S. State Department said in a statement.

The ruling party in Zimbabwe seized Marange in 2009 allegedly by killing hundreds of prospectors. President Robert Mugabe's party continues to control the area with violence and forced labor, rights groups say.

The BBC reported that Zimbabwe Mines Minister Obert Mpofu told his country's state-run Herald that the Kimberley Process decision was "a breakthrough."

"We want to be treated like any other country. I'm going to sell our diamonds now," Mpofu told the Reuters news agency.

The Kimberley Process was created by the United Nations in 2003 to ensure that the trade in diamonds did not contribute to human rights abuses. But Thursday's decision calls into question its effectiveness.

The Process grew out of the trade in blood diamonds that financed brutal rebel groups in Sierra Leone and Liberia. Many member countries and diamond-industry representatives argue that the Process was not meant to address state-sponsored violence, like that in Zimbabwe.

Civil society groups and Western states disagree, insisting that the Process' charter covers all human rights abuses.

"We represent communities that have suffered from diamond-fueled violence and communities that hope to benefit from diamond wealth," said Aminata Kelly-Lamin from Sierra Leone's Network Movement for Justice and Development. "We can no longer go back to these people, look them in the eye and tell them that the scheme is working to protect their interests, when it is not."

Thursday, June 23, 2011

Bikers rob courier agent of diamonds worth Rs 2 crore




A case of robbery against three unidentified men, who snatched a bag containing gold and diamond ornaments worth Rs2 crore from an employee of a courier company, and fled, was registered on Thursday. The incident took place around 10.30am when Sanjay Soni and Dilip Vyas had gone to the domestic air
port to collect two parcels, which were being brought in by the Jet Airways flight from Delhi.

Both Soni and Vyas are employed with the Ashok Courier Company located in Kunkuwadi in Vile Parle (East),

After collecting the parcel containing the valuables, Soni hired a rickshaw and left, while Vyas decided to wait for his turn to collect the parcel at the airport.

Due to traffic congestion, Soni’s rickshaw stopped for a while near Vile Parle station, following which two men entered the three-wheeler from each side and snatched the parcel from Soni at gun point, the police said.

The accused then got off the rickshaw and sat on a bike where one person was already waiting for them and the trio sped away soon after. Soni then approached the police and lodged a complaint.

Confirming the robbery, SN Chaudhary, deputy commissioner of police (zone 8), said, “We are investigating into the case.”

The area near Vile Parle railway station where the theft took place is very crowded and hence it would have been difficult for the accused to get away with the stolen booty without raising a suspicion, said a senior officer from Vile Parle police station, on condition of anonymity, as he is not authorised to speak to the media.

Wednesday, June 22, 2011

Peregrine finds new diamond-rich kimberlites That adds more economic potential to its Chidliak property



Peregrine Diamonds Ltd. said today that it’s found three new diamond-rich formations called kimberlites on its Chidliak property.

These kimberlites, volcanic rocks that often contain diamonds. were discovered by drilling on the property, located about 100 kilometres northeast of Iqaluit on the Hall Peninsula.

Since 2008, Peregrine has drilled more than 50 targets around the 8,500 sq. km. property.

Seven of those formations have the economic potential to be mined.

Earlier this year, Peregrine Diamonds Ltd. and BHP Billiton said they would spend $17.7 million in 2011 on exploration at Chidliak.

Within 10 years, depending on whether the exploration results “can put meat on the table,” and the project passes all permitting hurdles, there may be a diamond mine as large or larger than BHP’s Ekati diamond mine in the Northwest Territories, company president Brooke Clements Clements told Nunatsiaq News earlier this year.

A deep sea port in Iqaluit and a road inland to the site could follow.

Chidliak’s location, close to Iqaluit and 180-km south of Pangnirtung, is a plus for any future mine, he said.

For now, the main impact of Peregrine’s exploration activities and similar exploration projects across Nunavut now lies in the money they pump into the territory’s economy through exploration: this is expected to reach $322 million in 2011, up from $263 million in 2010.

Tuesday, June 21, 2011

Zimbabwe 'to defy US, West' on diamond exports




Zimbabwe has vowed to defy moves to monitor diamond sales from its disputed Marange fields, at the opening of a meeting of the global "blood diamond" watchdog, state media reported Tuesday.

Mines minister Obert Mpofu said the southern African nation must be allowed to export gems without any monitoring, insisting Zimbabwe has met the minimum requirements of the Kimberly Process Certification Scheme (KPCS), which seeks to prevent diamond sales from financing conflicts.

"Zimbabwe met the KPCS minimum requirements and this was confirmed by the last plenary" of the Kimberley Process, Mpofu said on the sidelines of the meeting which opened Monday in Kinshasa, according to the state-run Herald newspaper.

"Tell me of any country in Africa that has invested as we have done in the Marange area," he said. "Any other outstanding issues must be regarded as work in progress, but must not stop our full diamond export right."

Mpofu said Zimbabwe has for two years invested "in attempting to rectify all KPCS issues in Marange area without any external financial assistance," adding that "Zimbabwe is not being treated fairly."

The Marange fields, touted as Africa's richest diamond find of the decade, have been at the centre of a years-long controversy over abuses by Zimbabwean President Robert Mugabe's military.

Monitors say the military seized control of the fields in late 2008, violently evicting tens of thousands of small miners and then beating and raping civilians to force them to mine the gems.

Human rights groups say about 200 people were killed, and Kimberley Process investigators later documented "unacceptable and horrific violence against civilians by authorities", prompting a ban on exports of the gems.

Canada's ambassador to Harare, Barbara Richardson said she believed the talks in Kinshasa this week could lead to a solution for the Marange diamonds.

"We want consumers to want to buy diamonds from every country, but in order to have diamonds certified by Kimberly Process there are minimum obligations that must be met," she said on Zimbabwe's state television.

"I think in Kinshasa there will be discussions and I think they will be positive discussions and that there will be a resolution possible that will allow for Zimbabwe to continue to be certified just like Canada is certified."

Canada and other Western nations have joined rights groups in pressing for Kimberley to apply the same rules to human rights violations as it has in the past for armed conflicts like the civil wars in Sierra Leone and Liberia.

But the suspension of sales from Marange has done little to stem the flow of smuggled diamonds across the nearby border with Mozambique and then to overseas markets.

Some African governments have also balked at applying the same standard to the government of Zimbabwe as to rebel movements like those in Sierra Leone, whose brutal tactics prompted global concern over the sale of "blood diamonds".

In March, the Democratic Republic of Congo -- which has close ties to Mugabe and is the current chairman of the Kimberley Process -- made a unilateral decision to allow Zimbabwe to sell diamonds from Marange.

The decision sparked an outcry among other members of the Kimberley Process, which is supposed to reach decisions by consensus at its regular meetings. The decision was put on on hold and no sales have taken place.

Monday, June 20, 2011

Zimbabwe's Marange Diamonds Center-Stage At DRC Kimberley Meeting




Kimberley Process Chairman Mathieu Yamba of the Democratic Republic of Congo declared Marange diamonds could be sold into the world market, but his statement was not backed up by a Kimberley consensus

Zimbabwe is center stage at a four-day Kimberley Process meeting that opened Monday in Kinshasa, the Democratic Republic of Congo, with opposing camps already haggling behind the scenes over whether Zimbabwe should be allowed to sell diamonds from the highly controversial Marange diamond field into international markets.

Kimberley Process members this week are discussing issues affecting the diamond trade globally – but Zimbabwe once again is topping the agenda as KP members have not been able to achieve a consensus on the proper handling of Marange stones.

Key members such as India and African diamond-producing countries led by South Africa are pushing for the removal of a global ban on rough stones from Marange.

Kimberley Process Certification Scheme Chairman Mathieu Yamba of the Democratic Republic of Congo early this year declared Marange diamonds could be sold into the world market, but his statement was not backed up by a Kimberley consensus.

African members have lined up behind Harare, but human rights groups say Marange stones should be blacklisted as "blood diamonds," arguing that they have been tainted by human rights violations. But many observers expect that the tenuous barriers to the untrammeled export sale of Marange diamonds will gradually be lowered.

Research Director Alan Martin of Africa Partnership Canada told VOA Studio 7 reporter Sandra Nyaira that Zimbabwe is not yet up for discussion Monday, but that informal talks on the topic were under way. Martin said neither Zimbabwe nor the African Diamond Producers Association have tabled a formal proposal yet because Harare has refused to endorse a text worked up in Dubai that allowed sales with reduced oversight.

Zimbabwean Deputy Mines Minister Gift Chimanikire said Harare expects the Kinshasha meeting to be the last to discuss Zimbabwe’s compliance issues because he expects that the session will give a green light to the unrestricted sale of Marange diamonds.

Political analyst Effie Dlela-Ncube told VOA Studio 7 reporter Sithandekile Mhlanga that the Kimberley Process may achieve a consensus to lift the embargo on diamonds from Marange depending on how much the progress the country has made in observing human rights in the zone, and in making sure revenues benefit all Zimbabweans.

Sunday, June 19, 2011

The King of Really Big Diamonds Heads to China




On this big night out, Gisele Bündchen, darling of the cameras, is decked out in diamond earrings from Van Cleef & Arpels. The cover girl Shalom Harlow wears rocks from Harry Winston. And Madonna, that proto-Gaga, is bejeweled in Cartier.

But none of the gems actually belongs to them.

At the May gala of the Metropolitan Museum of Art Costume Institute, these A-listers are simply borrowing their baubles from some big names in diamonds, a common P.R. tactic in the high-glitz business of gems.

Yet jewels from Laurence Graff, perhaps the biggest dealer in seriously big stones, are rare this evening.

The King of Really Big Diamonds

“The people who wear Graff jewelry own it,” says Henri Barguirdjian, who heads Mr. Graff’s United States sales operation. “I think it is a bit of an insult to our clients who actually purchased our jewelry,” he adds, referring to the notion of non-owners wearing Graff jewels. “If you spend $1 million, that is a lot of money. Do you want a little model wearing it?”

It might seem remarkable that anyone would spurn a little free fashion buzz, particularly in a business like diamonds, and particularly in tough economic times. Lending jewels to boldface names is standard practice.

Standard, perhaps — but not at Graff Diamonds. The retail business, however, is only part of an empire that extends from luxe showrooms in London to gritty diamond mines in southern Africa to cutting rooms in Antwerp, Belgium, and beyond. It is a world that at times seems impervious to the fortunes of mere mortals, though not, it turns out, to the shifting sands of the global economy.

Beneath the headquarters of Graff on Albemarle Street, in the Mayfair section of London, is a warren of workrooms. There, 170 people produce the jewelry that Graff sells worldwide.

But now Mr. Graff is pushing into China, where the number of billionaires is climbing annually — and ranks second only to that of the United States. Everyone else is piling in, too. The exploding market for diamonds in China, it seems, is yet another sign of its rising economic might, or at least the willingness of its ultrarich to spend — and spend big.

“We make more sales to newer money than to older money,” Mr. Graff says in explaining China’s appeal. “Americans are not attracted in the same way in spending money on jewelry as in the Far East.”

Let others fret over a mere carat or two. Mr. Graff’s purchases of giant gems awe the diamond world. Over the decades, he has sold many major stones, including the Magnificence, a 244-carat white diamond, and the Maharajah, a 78-carat yellow diamond. Graff Diamonds hit the headlines in 2009 when robbers made off with $65 million of gems from its shop in Mayfair, in the largest jewel heist in British history. (The jewels have not been recovered.)

His customers have included Oprah Winfrey, Arnold Schwarzenegger, Denzel Washington, Victoria Beckham and Danielle Steel. In the past three years, Mr. Graff spent more than $100 million on four diamonds. That’s right: $100 million to buy just four stones. For one of them, a flawless, 24.78-carat pink diamond, he paid a record $46 million last year at a Geneva auction.

And he is not likely to lend it to anyone for the evening.

Today, Mr. Graff’s offerings include a necklace of 26 stones cut from the Lesotho Promise, a 603-carat rough stone that he bought for $12.4 million from the Letseng Mine in the African country of Lesotho. The company now values the necklace at more than $60 million. Also for sale is the Graff Constellation, a 102.79-carat flawless round diamond that was cut from the $18.4 million, 478-carat Light of Letseng.

Not that he buys only rough stones. He paid $24 million for the 35.5-carat Wittelsbach diamond, a fancy blue stone that is a rival to the Hope Diamond. In a controversial move, he recut the diamond to remove imperfections, prompting criticism that he had essentially painted over a Rembrandt. The Wittelsbach Graff sold recently for an undisclosed amount.

Mr. Graff oversees a network of 32 stores worldwide, and owns 12.14 percent of Gem Diamonds, a publicly traded mining company. Through a 51 percent stake, he controls the South African Diamond Corporation, which cuts and polishes diamonds; Safdico has 520 employees in places like Johannesburg, Antwerp, Mauritius and Botswana.

Though Hollywood celebrities are often photographed wearing big gems, “they are not big purchasers,” Mr. Graff, 73, says. “They don’t have that sort of money.”

Increasingly, the sort of money that moves this market is Chinese. Though buyers rarely disclose purchases, experts agree that the Chinese appetite for diamonds — particularly for colored diamonds — is growing.

The American diamond market, like the American economy, has slowed in recent years. Mr. Graff plans only one new store in United States, in San Francisco, a city that has many visitors from Asia. Graff already has three stores in East Asia, and plans to open one in mainland China and one on Taiwan.

The swing to Asia, and China in particular, has startled even Graff’s veteran management. “If you had told me five years ago that the biggest buyers would come from the People’s Republic of China, we would have laughed,” says Mr. Barguirdjian, Mr. Graff’s longtime lieutenant. “It took us by surprise. America used to be the No. 1 market. Now that is being challenged.”

Graff, of course, is hardly the only player in China. Competition there, even for Graff, is fierce. DeBeers has two stores in China and is opening three more this year. Tiffany & Company has 15 stores in China among its total of 240, and is planning more. Leviev, another major diamond dealer, has no stores in China, though it just finished a two-week exhibit in Shanghai and Beijing.

DIAMONDS are in many ways a hush-hush business. The inner workings of Graff, like those of most of the big players, are difficult to penetrate. While Compagnie Financière Richemont, owner of Cartier and Van Cleef, is traded on the Swiss stock exchange, it does not break out those jewelers’ earnings. Nor does DeBeers Diamond Jewelry, the retail operation DeBeers owns with the luxury giant LVMH Moët Hennessy Louis Vuitton, disclose the profits from its retail stores.

At Graff, one must depend on Mr. Graff’s numbers.

Sitting in his elegant shop on the Upper East Side of Manhattan, Mr. Graff, dressed in a tailored blue suit and blue tie, says 2010 was a good year for his empire. His companies, he says, generated worldwide sales of nearly $1 billion. Of that, $437 million came from Graff Diamonds, the retail arm, which turned a profit of $64 million after taxes.

The balance of his operations include his stake in Safdico, the diamond and polishing business, as well as Diamond Works, a wholesale diamond company. Those two are in turn under the umbrella of AE Holdings. All are based in countries known as tax havens — AE in Switzerland, Safdico in Mauritius and Diamond Works in Luxembourg. Revenue from those businesses last year totaled $550 million, Mr. Graff says, but margins are far lower than in the retail business. (He declines to elaborate.)

All of this has been highly lucrative for him. The Sunday Times of London has estimated his wealth at $3.2 billion in 2010. His holdings also include a vineyard and a resort in South Africa, as well as an art collection that includes Picassos and Warhols. He gave up his British residency 11 years ago, moving to Geneva and Gstaad, Switzerland, where the personal income tax rate is far lower than in Britain.

Like Harry Winston, who died more than three decades ago, Mr. Graff has made his fortune selling big diamonds. But his beginnings were humble. The son of Jewish immigrants from Eastern Europe, he grew up in the hard-scrabble East End of London. “From an early age, I could see a little area called Black Lion Yard where the Jewish people bought diamonds,” he recalls. It was, he says, a place where people wanted to put their money in something that seemed safe, something tangible.

“It has been the same forever,” he says. “Whether it was royal families in different parts of the world, or today, when people worry that their dollars are worth nothing, they want assets that will increase in value — silent assets that you can put in your pocket because tomorrow, anything can go wrong.”

As a young man, Mr. Graff was such a poor student that by the time he was 14, his mother had arranged for him to work as an apprentice for a jeweler, doing chores like washing floors and fetching sandwiches. He lost that job. “I guess I was not good enough,” he recalled.

Shortly thereafter, he went into a jewelry business with a partner. That venture went into debt, and Mr. Graff decided to take it over. Within six months he had paid off the debt and, displaying a certain panache for sales, began traveling around Britain, selling jewelry made with semi-precious stones. Mr. Graff later helped make some of the costume jewelry that Elizabeth Taylor wore in her film role as Cleopatra, alongside Richard Burton.

Soon Mr. Graff was traveling to Asia. His first coup was on a trip to Singapore, where a local department store bought his collection. By the 1970s, he was off to Japan, Hong Kong and the Middle East. “I went everywhere,” he says. “I was the first real Westerner who came into that market as a wholesaler: a man carrying a case of jewels.”

Starting in the 1970s, Mr. Graff began selling jewels to the sultan of Brunei. Mr. Graff became close enough to the royal family that the sultan’s brother lent him his Aston Martin during his visits. On a trip to the Philippines, he sold millions of dollars in jewelry to Imelda Marcos.

By the time wealthy Arabs arrived in London in the 1980s, Mr. Graff was the man to see. At that time, prices for big stones were beginning to rise. A watershed moment came in 1987: François Curiel, who heads the jewelry department for Christie’s, president of Christie’s Asia, recalled that in that year, a red diamond weighing 0.95 carat sold for $880,000, or $926,000 a carat. Before that, the highest price per carat for a diamond was $127,000. That was an anomaly, but prices for large colored stones have since been rising.

WHEN the petrodollars stopped gushing, Mr. Graff looked beyond the Middle East. In 1998, he bought his 51 percent of Safdico. Three years later, he opened his first store in the United States. To establish his brand here, he struck a deal to open a number of boutiques in Saks Fifth Avenue stores. “That got our name out overnight,” he says.

Despite all the publicity about major diamond sales, even experienced dealers still struggle to read the tea leaves.

At a Christie’s jewelry auction in April this year, the Graff team decided to bid up to $2.6 million for a fancy blue 3.25-carat diamond that was estimated to sell for $3 million to $3.2 million. (On top of the auction price, buyers must pay Christie’s an additional 20 percent.)

Graff’s thinking was that a retailer could not possibly charge a big-enough mark-up over $3 million to spend more for the stone. When a buyer agreed to a total of $3.66 million, Mr. Barguirdjian concluded that the buyer was probably a private individual in Asia, because “three carats is too small for an American.” He was half-right: it was an individual, but from Europe.

Just how Graff manages to carry an inventory worth many hundreds of millions is one of the great puzzles of the diamond market. Even experts scratch their heads about its finances.

One veteran jeweler, who did not want to comment publicly on industry names, says of Mr. Graff: It is “a mystery where he gets the financing to carry so much inventory.” But Mr. Graff says that carrying the inventory is no problem.

While the world of Graff might seem unaffected by the ups and downs of the workaday economy, it was in fact hurt by the recent slowdown. In 2008 and 2009, even the superrich pulled back.

In 2008, Graff Diamonds turned a pretax profit of $77 million on sales of $538 million, according to its chief financial officer, Nick Paine. In 2009, sales dropped to $432 million, and pretax profits to $62 million. Last year, sales were virtually flat, but pretax profits jumped to $86 million, mostly because of sales of smaller pieces with higher mark-ups. Which raises the question of how large his inventory of large stones has become.

Mr. Graff says he can turn a bigger profit by buying large, rough stones. “I will make my money on buying the rough, in my polishing it and getting it to a certain level of market price,” he says.

It can take from three months to a year to cut a rough stone. Cutting the Lesotho stone into 26 pieces, for instance, took nearly a year and involved more than a dozen people, he says.

Over time, the appetite for big stones hasn’t surprised Martin Rapaport, publisher of the Rapaport Diamond Report, an industry bible. Big diamonds are a way to move money without a trace. “Billionaires everywhere in the world like to keep some of their wealth in something easily transportable,” he says.

Mr. Graff, now in his eighth decade, is circumspect about the future. His son François, 47, works for him in London. But two years ago, a potentially smooth family transition seemed at risk. Mr. Graff and his wife of 47 years, Anne Marie, were set to divorce after Mr. Graff fathered a child with a woman who had worked for him. The London tabloids screamed that it would be the largest divorce settlement in British history.

At the last minute, the couple reconciled. And Mr. Graff is open in recognizing his daughter. “She carries my name and her mother’s name,” he said last week.

The Graff family empire, flawless or not, seems to be diamond-hard.

This story originally appeared in The New York Times

Mugabe vows to defy rules on 'blood diamonds'




President Robert Mugabe has promised to sell diamonds from his country's controversial Marange mine ''sanctions or no sanctions'', and the country that would be his biggest customer, India, is being urged by the industry there to buy Zimbabwe stones outside the international framework.

The Kimberley Process - the international protocol designed to stem trade of conflict diamonds - is in turmoil.

Conflict or blood diamonds are diamonds whose mining and sale is used to fund violent conflict and human rights abuses. Most come from resource-rich Africa, where diamond money is used to buy weapons and fight insurgencies.

The Age revealed last month that India, the world's largest diamond trading hub that exports 95 per cent of the world's cut diamonds, is being infiltrated by illegally mined conflict diamonds.

Diamonds mined in Africa are smuggled into India by plane or boat, where they are cut and polished, and essentially laundered, turned into clean diamonds for sale on the world market. Traders in India's diamond capital Surat said up to 10 per cent of India's $26 billion diamond market could be conflict stones.

Australia is a significant customer. By carat weight, half the cut diamonds imported into Australia come from India; more than 125,236 carats worth $155 million, according to the Bureau of Statistics.

The issue of Zimbabwe selling stones from its Marange mine will dominate the agenda at a Kimberley Process meeting that begins today in Kinshasa, the capital of the Democratic Republic of Congo.

Previously at the mine in the country's east, scores of miners have been shot by government troops from aircraft helicopters and local villagers forced into mining. It is widely believed government troops have been involved in smuggling stones.

Australia will push for independent monitors to supervise mining at Marange, saying it holds serious concerns for the future of the Kimberley Process, and a failure to resolve the Marange mine issue could see the entire framework fail.

Global Witness campaigner Elly Harrowell said this week's meeting was critical for the future of the Kimberley Process.

''The KP can't go on like this, we can't just crash from crisis to crisis. The Zimbabwe impasse has highlighted significant structural issues with the Kimberley Process and if we can't sort those problems out, then perhaps the KP won't have a future.''

But Mr Mugabe has already said his country will sell its Marange diamonds regardless of any conditions the rest of the world tried to impose.

''Sanctions or no sanctions, Zimbabwe will sell its diamonds,'' Bulawayo 24 News quoted him as saying.

Already, South Africa has agreed to buy rough Zimbabwe diamonds ''outside'' the Kimberley Process.

And the Indian diamond industry, likely by far Zimbabwe's biggest customer, is pushing for Delhi to do the same.

''Instead of South Africa, the initiative of accepting import of Zimbabwe diamonds should have been taken by India as Surat is the end-user of [Zimbabwean] stones,'' chairman of Surat Rough Diamond Sourcing India Limited Ashit Mehta said. ''It is very crucial to clear Zimbabwe's rough diamond export.''

The Kimberley Process was established in 2003 to curb the trade of conflict diamonds and requires all rough diamond exports to be stored in a tamper-proof box and carry a certificate guaranteeing the diamonds were mined legitimately.

But the Kimberley Process applies only to rough diamonds; once stones are cut and polished they are no longer bound by the protocol and are almost impossible to trace.

This makes India, with literally thousands of diamond-cutting operations, from the large and legitimate, to the unsophisticated and illegal, a haven for smugglers.

Thursday, June 16, 2011

'Blood diamond' trial: the case against Charles Taylor



He was the first ever African head of state to face an international tribunal. Aside from distracting details about his flirtation with supermodel Naomi Campbell, uncut jewels and dining with Nelson Mandela, the aim of the Special Court for Sierra Leone could not be more serious: to seek justice for the hundreds of thousands of victims of a vicious civil war.

Taylor stands accused of accepting "mayonnaise jars" stuffed with diamonds dug by anti-government rebels – and the civilians they forced to work at gunpoint – from Sierra Leone's rust-coloured earth which were then smuggled across the jungle border to Monrovia.

In return, US-educated and Libya-trained Taylor sent back weapons largely purchased on the black market because of a UN arms embargo placed on Liberia. Among those he is alleged to have traded with was Russian Viktor Bout, on whom the Nicholas Cage film Lord of War is partly based.

The Sierra Leone civil war claimed some 120,000 lives in the 10 years to 2001, with Revolutionary United Front rebels mutilating thousands of civilians who had their hands and arms severed.

According to Brenda Hollis, the chief prosecutor, Taylor was directly responsible for the terrorising of civilians, recruitment of child soldiers and even cannibalism – the court heard from a former aide who said he saw him eat a human liver.

Russia joins China’s fight for Zim diamond control




Russia is set to join China in controlling diamond mining in Zimbabwe, with the Federation’s state diamond group seeking a license to mine at the controversial Chiadzwa fields.

The Russian Ambassador to Zimbabwe, Andrey Kushakov, said recently that his country has pledged to invest in mining and infrastructure development in Zimbabwe as a way of supporting the country. According to the Times of India news service, Andrey stated that Russia's state diamond group, Gokhran, will be investing.

Russia will have to compete with China, which already has a controlling stake in operations at Chiadzwa. China has two companies operating as joint venture projects with Zimbabwe’s state diamond firm, namely Anjin and Sino-Zimbabwe. China has also pledged its support for Zimbabwe to be given the green light to resume full diamond exports by the industry watchdog, the Kimberley Process (KP).

India has since raised its concerns that China and Russia will be monopolising the industry, with the Times of India reporting that the Surat diamond hub will be forced into relying on Russia and China for rough diamond supplies. Surat is the world’s largest diamond cutting and polishing centre, and most Zimbabwean diamonds are sent there.

Uncut diamond dealer Rakesh Patel is quoted as saying; “Zimbabwe has a stockpile of about US$4 to US$5 billion worth of diamonds. Once the KP clear Zimbabwe to export the diamonds, Russia and China will buy most of the stockpile. The same diamonds will come to India through different channels at high premium rates."

"It is a big blow to Indian diamond manufacturers. Both Russia and China will secure the diamond resources of Zimbabwe and ultimately sell it to Indian diamond traders via Antwerp, Hong and Dubai," chairman of Blue Star Group Ashit Mehta told the Times of India. He said that the Surat industry is in dire need of raw material and only Zimbabwe can fulfill these requirements.

Zimbabwe’s official trade status remains unclear after the KP chairman earlier this year made a shock, unilateral decision to allow exports to resume. Many of the western KP members have since said this decision was unjustified, but a final decision is still to be made.

In the meantime, pressure is building on the KP to allow Zim sales to resume, despite ongoing reports of smuggling and serious human rights concerns. China’s pledge to support Zimbabwe has also been followed by a statement by a South African diamond group, which said it will start accepting Zim stones. India’s concerns will now add more pressure to the KP.

Zimbabwean political analyst Clifford Mashiri told SW Radio Africa on Thursday that Russia’s intentions to join the Zim diamond trade are “disturbing,” saying their motives must be questioned.

“Russia is no better than China in terms of business and human rights. They are linked to corruption and they have a bad rights record, like China,” Mashiri said.

He added that the massive wealth being attributed to Chiadzwa should be a blessing for Zimbabwe, not something that benefits foreign countries that do not care about Zimbabweans.

“We have problems that easily could be solved and these are the things Zimbabweans want the diamond money to fix. But it requires transparency, audits, and political will,” Mashiri said.

Wednesday, June 15, 2011

Botswana’s Strike to Affect Economic Growth, Mohohlo Says




A state-worker strike in Botswana, the world’s biggest diamond producer, and a ban on beef exports to the European Union will have a “short-term effect” on the country’s economy, central bank Governor Linah Mohohlo said.

Economic growth probably won’t exceed the 7.2 percent expansion of 2010, Mohohlo told reporters today in Gaborone, the capital.

“We do not want to talk about the effects of the strike as yet but definitely it will impact on the growth of the economy this year,” she said. “This might reverse the gains of economic recovery recorded so far.”

State workers, including nurses and teachers, went on strike for eight weeks to demand a 12 percent pay increase. Schools temporarily closed and police fired tear gas to break up demonstrations, according to labor union officials. The unions suspended the protest on June 13 after the government refused to raise its offer from 3 percent. Shipments of beef from the southern African nation to the EU were halted in March after the country didn’t meet European safety requirements, according to the government.

Botswana’s economy rebounded last year following a 3.7 percent contraction in 2009 when the global financial crisis cut demand for diamonds.

Balance Budget

Demand for gems, particularly from emerging economies, continued to improve this year and should support growth, Mohohlo said. A decline in government spending, as the state tried to reduce its budget deficit, will probably curb the rate of expansion, she said.

The state plans to cut the fiscal deficit to 6.3 percent of gross domestic product in the fiscal year through March 2012 and has pledged to balance the budget by 2013, Minister Kenneth Matambo said on Feb. 7. The shortfall widened to 12 percent of GDP in 2009.

The Bank of Botswana kept its benchmark interest rate at 9.5 percent to help boost the economy and with inflation forecast to ease to within its 3 to 6 percent target range by the second half of next year, the central bank said yesterday. Inflation was 8.2 percent in April, according to the country’s statistics office.

Slower growth in disposable income would help to ease inflation, Mohohlo said today.

Surat firm makesa breakthrough in diamond processing




Lexus Softmac, a unit of the Surat-based Lexus Group, has developed a new technology that allows processors to see through a rough diamond and polish it to a higher level of purity.

Industry experts said processing diamonds with the so-called immersion glass technology will also reduce wastage, thus increasing yields and profits.

India imported rough diamonds worth $11.9 billion (Rs.53,000 crore) in 2010-11, up 31% from 2009-10, according to Gem and Jewellery Export Promotion Council of India (GJEPC), a government-approved body that represents India’s diamond processing industry.

“This is the first such technology in the world and we have already got it patented in Europe and applied for patent rights in India,” said Utpal Mistry, chhttp://www.blogger.com/img/blank.gifief executive of Lexus Group. “Using this technology we can see through a rough diamond, which is almost opaque, and find out impurities like carbon deposits, and plan the cutting of the diamond in a way that the impurities are not included in the diamond.”

A rough diamond is immersed in a heated formulation of immersion glass. After the glass solidifies, the clear parts of the diamond become transparent, while the impurities are visible through a microscope. These impurities are pointed out and then the glass is melted to take out the diamond for cutting.

The technology has been developed with the help of Lexus Softmac’s Russian partner OctoNus Software Ltd.

“This is the first such diamond planning technology in the world,” said K.K. Sharma, former director of Surat-based Indian Diamond Institute, which runs professional skill enhancement courses for the diamond industry.

“In other planning technologies, we end up wasting some portion of the rough diamond in the planning stage as it needs to be polished to reduce the opaqueness of the rough diamond,” he said. “This can be saved using this technology, while providing higher value to the finished diamond. This maximizes the utilization of a rough diamond and gets more profit out of it.”

Sharma said rough diamonds cut using other planning technologies yield 50-60% in terms of weight and value, while immersion glass technology can give up to 70-75%.

Lexus recently used the technology for the first time to cut a 154-carat rough diamond into 25 clear diamonds. The Gemological Institute of America, a laboratory that certifies cut and polished diamonds, gave 24 of them the “internally flawless” grade—the second highest grading for a diamond based on its clarity. Diamonds are valued in the market according to such grades.

Lexus processed the rough diamond for a Mumbai-based diamond processing firm. A senior official of the firm, who did not want to be named, said they were at best expecting 10-15 pieces of a lesser grade.

“Such indigenous technologies in diamond processing industry is definitely the need of the hour as it enables processors to take maximum returns from rough diamonds,” said Rajiv Jain, chairman, GJEPC.

Mistry said Lexus will shortly distribute the technology worldwide.

Lexus Group exports diamond-cutting technology to most diamond-processing countries, including Belgium, South Africa, United Arab Emirates, Botswana, Russia and Israel.

Tuesday, June 14, 2011

48-Carat Diamond Ring Fetches $4.2M at Auction

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A 46.51-ct. oval-cut diamond, flanked on either side by a pear-shaped diamond, weighing approximately 1 and 1.01 cts., (pictured above) fetched an impressive $4.2 million at Christie’s Important Jewels sale in New York. The E color, VVS2 diamond mounted on a platinum ring has a presale estimate of $2.5 to $3.5 million. The two pear shaped diamonds were graded as D color, VS1 and VS2 clarity, respectively.

Also commanding a powerful price was a 10-carat, D color, internally flawless pear-shaped diamond flanked on either side by a pear-shaped diamond, each weighing approximately 1.02 cts., mounted in platinum that sold for $1.3 million, well within its presale estimate. The two side diamonds are graded as D color and internally flawless.

The sale which featured exceptional diamonds and elegant signed jewelry at the international auction house’s Rockefeller Plaza headquarters took in a total of $11.7 million with 118 of the 125 lots sold (94 percent). The auction achieved 98 percent of its value by price.

Statement diamonds were by far the best sellers and include the following:

A pair of ear pendants, each suspending a cut-cornered modified square-cut fancy yellow diamond, weighing approximately 17.77 and 17.80 carats, from a baguette and trapeze-cut diamond link, to the circular-cut diamond French wire, mounted in platinum and gold that sold for $722,500.

A ring set with a 19.22 carat, potentially internally flawless, square emerald-cut fancy light yellow diamond, flanked on either side by a triangular-cut diamond, mounted in platinum that sold for $458,500 ($24,000 per carat), well above its presale estimate of $200,000 to $300,000.

A platinum ring featuring a 10.42-carat, square emerald-cut diamond with the shoulders set with circular-cut diamonds that sold for $458,500 ($41,000 per carat).

A ring signed by the Italian jewelry house, Sabbadini, set with a rectangular-cut diamond, weighing approximately 9.76 carats, with the shoulders set with modified hexagonal-cut diamonds, mounted in platinum. The ring sold for $434,500 ($45,000 per carat), well above its $200,000 to $300,000 estimate.

Monday, June 13, 2011

Valuation boosts Stornoway Diamond mine in Quebec




Stornoway Diamond Corp. says a new valuation adds up to 56 per cent to the base price estimate of diamonds at its flagship project in northern Quebec.

The valuation of bulk sample diamonds at the Renard project was done in connection with an ongoing feasibility study, the company said Monday.

Samples from Renard 2 and 3 kimberlite pipes saw price estimates increase 56 per cent to $182 U.S. per carat while samples from the Renard 4 pipe saw an increase of 49 per cent to $112 U.S. per carat.

“This comprehensive new valuation of the Renard bulk sample diamonds has confirmed the substantial increases in rough diamond prices of the last 18 months, brought about by sustained demand growth and tightening mine supply,” Matt Manson, Stornoway CEO, said in a statement.

The feasibility study is expected to be delivered in the third quarter, he said.

The $511-million Renard project is located in the Otish Mountains area of the James Bay region.

A preliminary economic assessment said that the project could potentially produce 30 million carats of diamond over a 25-year mine life. The net value of the project was set at $885 million.

Read more: http://www.montrealgazette.com/Valuation+boosts+Stornoway+Diamond+mine+Quebec/4938268/story.html#ixzz1PCXPGCgN

Mozambique to step up diamond controls



Mozambique is speeding up preparations to join an international conflict diamond monitoring scheme amid widespread gem smuggling from Zimbabwe's controversial Marange mines, state media said on Monday.

Mining Minister Esperanca Bias said Mozambique, which hopes to start mining its own diamonds soon, wants to join the Kimberley Process diamond certification scheme by December, Noticias newspaper reported.

"Government's idea is that we shouldn't lose time. We are in the prospecting phase, yes, but we have to join the Kimberley Process already, so that we are familiar with it when we start mining activities," Bias said.

Currently 27 companies and individuals are prospecting for diamonds in Mozambique under 40 separate licences.

Tests are already being done to see if some samples are commercially viable, Bias said.

Her announcement comes amid reports that diamond smugglers are trading in gems worth millions of dollars from neighbouring Zimbabwe's Marange diamond mines through the central Mozambican border town of Manica.

The Marange fields, touted as Africa's richest diamond find of the decade, have been at the centre of a years-long controversy over reported abuses by Zimbabwean President Robert Mugabe's military.

Monitors say the military seized control of the fields in late 2008, violently evicting tens of thousands of small miners and then beating and raping civilians to force them to mine the gems.

Human rights groups say about 200 people were killed, and Kimberley Process investigators later documented "unacceptable and horrific violence against civilians by authorities", prompting a ban on exports of the gems.

The Kimberley Process last year allowed two special sales of Marange diamonds. In March, Zimbabwe's deputy mines minister announced that the Kimberley Process would again allow the country to sell diamonds from the mines.

The watchdog's current chairman, Mathieu Yamba of the Democratic Republic of Congo -- who has links with Mugabe -- was subsequently criticised for acting unilaterally in authorising the sale.

Thursday, June 9, 2011

IMF wants Biti to handle all diamond dealings




The International Monetary Fund wants Finance Minister Tendai Biti to handle all diamond transactions by transferring the administration of the Zimbabwe Mining Development Corporation to his ministry.

The Bretton Woods institution wants this captured in the Diamonds Revenue Bill that is now before Cabinet and expected to be sent to Parliament soon for consideration. The IMF proposal follows indications by Prime Minister Morgan Tsvangirai that Zimbabwe will use revenue from diamond sales to repay part of its external debt totalling $7.1 billion.

Zimbabwe is following a strict IMF prescription that has restored sanity to the central bank and seen the country's voting rights restored after a seven-year suspension, a step toward normalizing relations with major donors. Zimbabwe is, however, not eligible for financial aid until it clears its arrears, about $1,3billion, to the Fund, the World Bank and African Development Bank.

A letter from a consultant drafting the Diamond Revenue Bill, Brian Crozier, to Biti (seen by The Zimbabwean) says: "The IMF chief of mission suggested an amendment to the ZMDC Act in order to give you power to direct the disposition of the corporation’s revenues.”

He said he had inserted a new section, giving Biti power to issue directives which will in effect place the ZMDC under the supervision of the mMinistry of Finance and ZimRA. Zimbabwe plans to seek relief for 68 percent of its debt from foreign lenders and pay the remainder using proceeds from minerals such as diamonds and platinum.

The resolution of the debt is crucial for Zimbabwe to return to the international community. The Diamond Revenue Bill is set to stir intense debate when it is tabled in Parliament. Biti was not immediately available for comment.

Critics say the ministry of Finance should steer clear of the mining sector and leave the ministry of Mines to handle all mining.

Diamond Demand to Beat Supply for Five Years, De Beers’ Oppenheimer Says




De Beers, the world’s largest diamond producer, said demand will surpass production for at least the next five years because no new mines are coming on stream.http://www.blogger.com/img/blank.gif

“For the foreseeable future, five years, it seems to be the demand for diamonds is going to exceed the supply,” Chairman Nicky Oppenheimer said today in a speech at the Council on Foreign Relations in Washington. “That is simply because there are no new mines.”

Demand has recovered since De Beers, which is based in Johannesburg, slashed output in 2009 during the financial crisis. Prices rose 7.7 percent in May as retail sales in emerging markets improved, the Rapaport Group said today, citing its composite RapNet Diamond Index of certified, polished stones.

“We only have the existing mines,” Oppenheimer said. “Their production is level at best.”

“With China and India coming into the market, I think demand is going to exceed supply for the immediate future,” he said.

De Beers, producer of about 40 percent of the world’s rough diamonds, posted 2010 net income of $546 million, compared with a year-earlier loss $743 million. The Oppenheimer family owns 40 percent of De Beers, London-based Anglo American Plc. (AAL) has 45 percent and Botswana holds 15 percent.

“We’re seeing diamonds coming back into favor,” Oppenheimer said.

Harry Winston boss says diamond demand already outshining supply




Diamond demand is already starting to outstrip supply, and will continue to do so until a major new mine is found and developed, Harry Winston chairperson and CEO Bob Gannicott said on Thursday.

“In a way, we’re already seeing it now and I think it will become more acute,” he told Mining Weekly Online.

“The effect of China really is enormous, but people tend to neglect India, which also has very strong growth.”

China and India have emerged as major diamond markets in the past few years, more than picking up the slack after the biggest consumer, the US, saw a significant drop in demand for luxury products after the financial crisis.

Later on Thursday, Bloomberg quoted De Beers chairperson Nicky Oppenheimer as saying demand for diamonds would be greater than supply for the next five years.

"That is simply because there are no new mines," he told the Council on Foreign Relations in Washington.

Gannicott said that Harry Winston, which owns 40% of the Diavik mine in Canada’s Northwest Territories, is keen on securing additional sources of the precious stones it sells in its ultra-luxury jewellery stores, where a diamond-encrusted watch can retail for over $600 000.

“Exploration is part of that, and reviewing projects that need a partner or want to roll up with us is another,” he commented in an interview.

“And there are several around, but it’s a matter of finding one that offers proper accretive value.”

Gannicott declined to provide further details, citing confidentiality agreements.

Harry Winston has started exploring properties it acquired directly southhttp://www.blogger.com/img/blank.gifwest of the Diavik mine, but it would be at least ten years before any production came from these, assuming the company found economically viable deposits.

It would take a “major discovery” of diamonds somewhere in the world to fill the diamond supply gap, and this too would take at least a decade to bring into production, said Gannicott.

In the meanwhile, prices – which have reached record levels this year – will continue to climb, he added.

Will they reach level where it starts to scare consumers away?

Gannicott doesn’t think so.

He compares the situation to someone buying a house – if prices rise, a buyer might look at a smaller property, or consider moving further away from a city centre.

“I don’t think it’s going to destroy the appetite of the consumer to own diamonds, but obviously, people will buy diamonds according to their budget,” he commented.

Harry Winston on Wednesday night reported its results for the quarter ended April, showing a 51% jump in pretax earnings to $25-million.

Wednesday, June 8, 2011

Botswana Diamonds identifies potentially diamond bearing rock in Cameroon

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Exploration at Botswana Diamonds’ (LON:BOD) diamond licence in Cameroon has identified possible diamond bearing rock.

The company reported that a small diamond was recovered from a sample taken from a stream in the same area where the conglomerate was identified. A follow-up drilling and trenching/pitting programme will now be undertaken to determine the extent of the rocks and whether they are diamondiferous.

“This is very exciting for Botswana Diamonds. Our next step is to prove that there are diamonds there,” said chairman of Botswana Diamonds John Teeling.

“To date the majority of the licence has not been explored and significant scope remains for discovering more areas where the paleo-conglomerate layer is preserved.”

Investors were cneouraged by the news as shares in Botswana rallied 7 percent to 5.75 pence in early deals.

The conglomerate horizon included in the sedimentary rock layers identified at the license is geologically similar to the paleo-conglomerate that C&K Mining has identified as being diamondiferous.

The exploration team is currently completing geological mapping to delineate the extent of this conglomerate horizon. In addition to that, the company has collected a number of rock specimens for further study and analysis.

In April, Botswana Diamonds began a 60-90 day exploration programme in a remote rainforest area of Cameroon – on its 8,000 square kilometre diamond licence south of the Mobilong diamond field.

The campaign aims to identify the presence and extent of the diamond bearing host rock that defines Mobilong and the work will include geological mapping and excavation.

Diamonds are a girl's best friend: Jessica Alba draped in jewels as she fronts new fashion campaign




They say that diamonds are a girl's best friend - and Jessica Alba certainly looks at ease modelling the latest designs from luxury jeweller Piaget.

Revealed as the new face of the Swiss brand, the 30-year-old actress - currently pregnant with her second child - poses wearing pieces from the label's Possession range in a series of pictures shot by renowned fashion photographer Patrick Demarchelier.

Jessica, who takes over from Sienna Miller as the model for the brand, is styled in six different ways 'from sophisticated to street-savvy' to reflect the different sides of her personality, Piaget say.

Mother to three-year-old daughter Honor, the American beauty is frequently lauded for her style and beauty, and was previously voted FHM’s ‘Sexiest Woman in the World’ and one of GQ’s top 25 Sexiest Women in film of all time.

Of the campaign she said: 'The great thing about these pieces is how chic and simple they are. It’s jewellery that you can hang on to and pass down. This is something I would want my daughter to have later in life.'

'I love the idea of layering the gold and the silver and rose gold, this sparkly line is nice with all of the diamonds.

'These are pieces that you keep forever, they’re timeless.

Of working with Demarchalier, Jessica adds: 'It’s just thrilling to be shot by Patrick who is a legend.'
Mr Demarchelier, 67, repays the compliment. The globally acclaimed photographer, who has shot advertising campaigns for brands including Dior, Louis Vuitton and Chanel - and even earned a reference in the film The Devil Wears Prada - says Jessica is stunning.

He said: 'Jessica Alba is a beautiful girl, she is gorgeous the way she is. It's simple.'

Piaget - a brand also popular with the likes of Liv Tyler and Leighton Meester - say their new range represents a 'secret story of love or friendship'.

The Possession collection is available in white or yellow gold, paved with diamonds or left without.

Jessica, who gained Hollywood star status thanks to films such as Shttp://www.blogger.com/img/blank.gifin City and Fantastic Four, stars in August's film release Spy Kids 4: All the Time in the World.

Married to long-time boyfriend Cash Warren, Jessica is expecting another child this year.

Source:dailymail

Tuesday, June 7, 2011

Diamond ring adds sparkle to anniversary celebration




The sparkle in Navneet Kaur's eye was not just from the rock shining on hehttp://www.blogger.com/img/blank.gifr hand. On Monday as her husband Sukhwinder Singh Bajaj gifted her the diamond ring, Navneet remembered 18 years of married life and could not stop beaming with joy.

The Bajaj couple, who stay in Dugri Phase 2, said it still felt like the first year of marriage. ''Though we met each other through a matrimonial advertisement our relationship is stronger than that of couple who enjoy love marriages,'' said Navneet. Unconsciously admiring her new ring again and again, she added that, ''The gift was very special. Every woman loves diamonds and getting it as an anniversary gift was very unexpected.''

Lovers of non vegetarian food, the couple and their children Jagmeet Singh and Prabhleen Kaur, enjoyed brunch at KFC and had dinner at Chawla's restaurant. The family also watched 'Ready' for a second time, went shopping and enjoyed a drive around the city.

Sukhwinder said they used to celebrate every anniversary at a hill station but this time their kids had extra classes because of which they didn't go out of town. ''But we still had a lot of fun. My wife gifted my a teddy bear because I love them since my childhood,'' he said.

Meanwhile, the couple's kids were excited because their parents always include them in all plans. ''For their anniversary mom and dad could have made some plans just for the two of them but they never do that. They are so careful to make us a part of all their moments. They are the best,'' said Jagmeet.

Monday, June 6, 2011

Diamond Proceeds Expected to Repay $98M Chinese Loan to Zimbabwe




In a deal signed in March by Zimbabwean Finance Minister Tendai Biti and President of the Export-Import Bank of China Li Ruogu, China will lend Zimbabwe $98 million to build a military college outside Harare, and Zimbabwe will repay the load using proceeds from its diamonds, Voice of the People reports.

Article 9 of the loan agreement stipulates that Zimbabwe's earnings from Anjin, a Chinese company mining diamonds in the Marange region in a joint venture with the government, will be garnished to offset the loan.

Zimbabwe's Marange diamonds remain under international embargo, with the Kimberley Process at a deadlock. Recently, South Africa's diamond regulator decided to permit imports of rough diamonds from Zimbabwe, and the diamond industry in Surat is urging India's central government to do the same.

The latest deal between Zimbabwe and China also names China as a preferential supplier of all goods, technologies, and services to be used in constructing the college.

While some have criticized the college as an example of what they call the Zimbabwe government's misplaced spending priorities, Defense Minister Emmerson Mnangangwa argued that the institution will create employment and benefit local induhttp://www.blogger.com/img/blank.gifstry.

Although the loan was signed on March 21, President Robert Mugabe recalled parliament only this week to have it ratified – a move that came as a delegation of Chinese military officers were visiting the country. "China is a great friend of us in many ways," Mugabe said.

Source:israelidiamond

Sunday, June 5, 2011

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Indians want Marange gems


A key Indian rough diamond buyer has urged New Delhi to accept imports of stones from Zimbabwe’s Marange mines following reports South Africa has authorised dealers to take stones from the controversial mines.


The Surat Rough Diamond Sourcing India Limited (SRSDIL) - a special purpose company formed to source rough diamonds from African countries – said the move by South Africa should spur New Dehli to act urgently, warning that further delay could see India losing out on the Marange stones to China and Russia.

"Instead of South Africa, the initiative of accepting import of Zimbabwe diamond should have been taken by India as Surat is the end-user of Zim stones,” said SRSDIL chairman Ashit Mehta.

"If India will not act in favour of Zimbabwe, the diamantaires will lose the supply of Zim diamonds to China and Russia," Mehta said, in what should be good news to Zimbabwe’s cash-strapped government that is keen to resume exports of the Marange stones.

The South African Diamond and Precious Metals Regulator (SADPMR) earlier this week said it would allow diamonds from Marange in line with the stance of President Jacob Zuma’s government to support its northern neighbour’s diamond trade.

The SADPMR spoke after the World Federation of Diamond Bourses (WFDB) urged the Kimberley Process (KP) that regulates the world diamond industry to allow Zimbabwe to export the alluvial stones from Marange to avert an imminent shortage of diamonds on the international market.

But it should be the interest shown by India that boast the world’s largest diamond cutting industry that Zimbabwe will find more exciting as it looks to ramp up diamond exports and earn badly needed revenue.

According to estimates, Zimbabwe that has about two other big diamond production sites besides Marange has capacity to supply about 25 percent of world demand.

But the country has been unable to freely export rough stones from Marange -- its largest diamond deposits – after the KP banned the diamonds in 2009 over allegations of human rights abuses in the extraction of the gems and failure to meet minimum requirements for trading in the precious stones.

KP chairman Mathieu Yamba of the Democratic Republic of the Congo last March scrapped the ban on Marange stones.

But several countries, among them the United States and Britain, as well as non-governmental organisations that are KP members, have said they will not recognise Yamba’s decision to authorise exports of the Marange gems, saying the Congolese had acted without consulting all members as is required under the regulators’ rules.

Top diamond trade groups such as the World Diamond Council, Jewellers of America and the Diamond Manufacturers & Importers Association of America have also refused to recognise Yamba’s decision and have instructed their members to stay away from Marange diamonds.

However, should India follow the lead of South Africa and authorise its giant industry to take the Marange stones, this would greatly weaken the position of the countries and groups opposed to the Zimbabwean stones.

Diamond company swindled of $100 000




A Harare businessman Bernard Mahara Mutanga was arrested last week and charged with theft after he allegedly swindled a business partner of $100 000 in a botched diamond purchasing deal.

Mutanga, who is the chief executive officer of Braitwood Institute of Gemology, is alleged to have duped African Star Diamonds, represented by Hatineti Kevin Sachikonye, into believing he could buy diamonds on the company’s behalf, but allegedly failed to deliver the gems after he converted the cash to his own use.

It is alleged sometime in February this year, African Star Diamond, a company registered to buy and polish diamonds, experienced financial problems in acquiring diamonds from Minerals Marketing Cooperation of Zimbabwe.

Last month, Sachikonye, approached a colleague Happymore Mapara for assistance and Mapara in turn allegedly referred him to Mutanga, who is also in the business of buying and polishing diamonds.

On May 4, Sachikonye is alleged to have met Mutanga at his company offices in Alexandra Park where the two allegedly sealed a deal after Mutanga offered to purchase the diamonds on behalf of Sachikonye’s company.

It is alleged Mutanga then instructed Sachikonye to deposit part of the money for diamond purchases into Braitwood’s bank account.

Sachikonye allegedly complied and and transferred
$100 000 between May 10 and 11.

After allegedly transferring the cash, Mutanga allegedly withdrew the cash and converted it to his own use.

Sachikonye later made follow-ups, but failed to get the diamonds or a refund from Mutanga leading him to report the matter to police.

Thursday, June 2, 2011

Tiffany & Co reports sharp rise in first quarter net profit to $81.1 million




Luxury jewellery retailer Tiffany & Co has posted net profit of $81.1 million, or 63 cents per share, up from $64.4 million, or 50 cents per share, a year earlier for the quarter ending April 30.

The retailer reported a sales jump of 20 percent to $761 million. Stripping out currency changes, sales increased by 16 percent.

The firm said that gross margin rose to 58.3 percent from 57.8 percent, and that total same-store sales rose 19 percent, or 15 percent on a constant-exchange-rate basis.

Tiffany reported that all global markets saw double-digit sales growth, including a 19 percent increase in the Americas, a 37 percent jump in the Asia-Pacific region and a 25 percent increase in Europe.

Tiffany said it was raising its full-year earnings estimate to a range of $3.45 to $3.55 a share from its March forecast of $3.35 to $3.45.

Tiffany's results are being boosted by higher discretionary spending by wealthier consumers buying premium diamond and gold jewellery, as well as appealing to more middle-range, aspirational consumers.

"Worldwide sales growth in the early part of this second quarter is continuing to exceed our expectation, with solid performance in most regions," said Michael J. Kowalski, chairman and chief executive officer.

Tiffany had previously announced that store closings caused by the earthquake and tsunami in Japan would hit earnings by five cents a share. The stores have since re-opened and Japan sales rose 7 percent to $123.4 million in the quarter.

TV reality star Kim Kardashian in dreamworld with $2 million ring




American TV celebrity Kim Kardashian has received an engagement ring sethttp://www.blogger.com/img/blank.gif with more than 20 carats of diamonds.

Designed by Kardashian's friend, celebrity jeweler Lorraine Schwartz, the ring is set with a 16.5-carat emerald cut center stone flanked by a pair of two-carat trapezoids, according to media reports.

National Basketball Association star Kris Humphries is reported to have paid $2 million for the ring. "It's the most beautiful thing I have ever seen," she told People magazine. "It's perfect."

Wednesday, June 1, 2011

SA group to start accepting Chiadzwa diamonds




A South African diamond group has announced that it is ready to start accepting diamonds from Zimbabwe, despite the ongoing confusion over the country’s legal trade status.

As quoted in Zimbabwe's Financial Gazette, a communiqué from the South African Diamond & Precious Metals Regulator said that it was taking its cue from the government, which has already pledged its support for Zimbabwe’s diamond trade to be officially legitimised. The Regulator said; “On that note, we will accept imports of rough diamonds from Zimbabwe.”

South African officials earlier this year had lobbied on Zimbabwe’s behalf at an international diamond meeting in Dubai, calling for the international trade watchdog, the Kimberley Process (KP), to clear Zim diamonds for sale. South Africa’s Mines Minister, Susan Shabangu, said her Zimbabwean counterparts had complied with international standards and the country was ready to trade its gems in a “normal way.”

Shabangu’s remarks came after a controversial decision by the new KP Chairman, Mathieu Yamba, to give Zimbabwe the green light to start exporting, despite the needed consensus by the rest of the KP over the country’s trade future. This confusion remains and international diamond traders have been warned against buying Zimbabwe diamonds until there is a final decision.

The news from South Africa meanwhile comes amid reports that an African ally of Zimbabwe’s has already been buying the country’s diamonds, including stones from the controversial Chiadzwa diamond fields. Gabriel Shumba from the Zimbabwe Blood Diamond Campaign said on Wednesday that the South African Regulator’s announcement this week raised “huge suspicions” that the group might already have been accepting the stones.

South Africa is already widely believed to be the rumoured ‘Zimbabwe ally’ in the diamond trade. The KP monitor appointed to oversee Zimbabwe’s efforts to fall in line with international standards was a South African citizen, Abbey Chikane. Chikane tried to push through a decision to allow the diamond trade to resume, even going as far as unilaterally certifying some diamonds for legal export, without KP approval.

Chikane is related to Frank Chikane, the former Director-General in then South African President Thabo Mbeki's office. Mbeki has faced severe criticism for repeatedly appearing to back the Robert Mugabe regime, through quiet diplomacy and a widely condemned ‘softly-softly’ mediation approach. The accusation then, is that the Chikane’s have used political influence in the diamond trade, possibly for their own benefit.

Meanwhile top South African banking group Old Mutual, is also a shareholder in one of the joint venture mining firms working at Chiadzwa. Old Mutual has played down its involvement there, insisting that it was not part of the deal.

Shumba said on Wednesday that South Africa must be careful of being complicit in “sweeping human rights abuses under the carpet, if it is going to call for the exports from Zimbabwe to resume.” He explained that “the moment you say ‘lets resume trade’ before the question of human rights abuses is dealt with, then you are encouraging the trade in blood diamonds.”

Govt set to boost diamond beneficiation sector: Oliphant




Deputy Mineral Resources Minister Godfrey Oliphant on Wednesday outlined plans to boost South Africa's fledgling diamond cutting and polishing industry.

Speaking during debate on his department's 2011-12 budget, he told MPs these included developing a local "diamond funding model" to support small and medium-sized manufacturers in the sector.

Government would also look to supplement the country's locally mined diamonds with stones from other African countries, such as Angola, the Democratic Republic of Congo and Zimbabwe.

"It is... worrying that we remain a small player in the downstream sector of the diamond value chain, with a disproportionately small and under-developed beneficiation industry," Oliphant said.

This was despite the country's ranking as the world's sixth-largest producer in terms of volume carats and fourth-largest in terms of value.

While the diamond beneficiation industry had immense potential to create thousands of jobs, it remained "significantly small". One of the reasons was the high cost of setting up, with small and medium-sized manufacturers having limited or no access to finance.

"We are currently studying different diamond-funding models, like the Antwerp Diamond Bank, the Bank of Israel and the State Bank of India, in order to propose to local financial institutions -- and especially the IDC [Industrial Development Corporation] -- to consider developing a South African diamond funding model to support our local beneficiation industry," he said.

On security of supply, Oliphant said many manufacturers did not have access to a constant supply of rough stones.

"Limited access to rough diamonds is often cited as one of the main reasons why the local downstream beneficiation industry has not really taken off."

In this regard, the department was looking to some of South Africa's northern neighbours.

"To supplement locally-produced diamonds, we are exploring the possibilities of importing diamonds from other African diamond-producing countries.

"In particular, through our membership of the African Diamond Producing Countries, we are looking at importing diamonds from, among others, Angola, the Democratic Republic of Congo and Zimbabwe."

Oliphant said a shortage of advanced cutting and polishing skills was also a major barrier to developing the industry.

"To this end, we are working with the further education and training sector... the Mining Qualification Authority (MQA) and other industry stakeholders to develop a curriculum that will respond meaningfully to the skills needs of the diamond beneficiation industry."

Government was also looking at access to markets.

"The African Growth and Opportunity Act provides access to markets in the US, which consumes more than 50 percent of all diamond jewellery in the world. This is an opportunity for local diamond beneficiators to grow their markets internationally.

"In addition, a free trade area exists with the European Union, which provides for duty free access into the EU.http://www.blogger.com/img/blank.gif

"Together with local diamond beneficiators, we will be exploring means to leverage on these instruments, in order to facilitate access of local beneficiators goods into these lucrative markets," Oliphant said.

Speaking at the start of the debate, Mineral Resources Minister Susan Shabangu said government was well aware of the problems currently besetting the diamond beneficiation sector, including a "lack of access to rough diamonds".

Government's strategy would be finalised "before the end of the current financial year", she said.