Namakwa Diamonds to raise US$ 55 mln following oversubscribed open offer

Namakwa Diamonds  shares rallied on the news that it expects to raise the full amount of funds expected in an open offer for new shares, that closed today.
The Africa-focused diamond firm said the share placing will raise US$ 55 million, pending shareholder approval at a special meeting this evening. The open offer was oversubscribed by 24.5 per cent.
The funds have been earmarked to repay debts and provide working capital for the company.
Repaying its debts now will mean the firm can avoid punitive interest rates and financial covenants Namakwa said.
Chief executive Richard Collocott explained that despite trading being in line with expectations, the group’s financial performance depends on the repayment of existing loans.
The firm outlined its fundraising plans at the start of June by offering just over 794 million new shares priced at 4.5 pence each.
Dealings in the new shares are expected to commence on the London Stock Exchange on 28 June.
At the end of May the company, which has its Kao mine in Lesotho and maintains alluvial operations in South Africa, said it had discovered an ‘exceptionally rare’ 11.36 carat pink diamond and a high value 44.47 carat diamond in the last financial year.
On the back of the news the share price was up 9.6 per cent to 4.44 pence.

Politburo plans to grab all diamond mines

“I do not know how they are going to do it, but this is what the party is planning,” said the source.
The Diamond Act, still being debated by the cabinetcommittee on legislation, proposes giving management contractsto the private companies currently mining diamonds.
“The politburo is saying there are some companies who have imposed sanctions on Zimbabwe who are dominating the diamond sub-sector andall these mines must be taken over,” he added.
He revealed that Zanu (PF) was specifically targeting Murowa and River Ranch, both owned by De Beers, emphasizing that the South African mining giant faced total expropriation.
“We have resolved that the party will continue to push for thee xploitation of all the resources in the country and we are sayingempowerment cannot be limited to diamonds, let alone specific deposit areas like Chiadzwa,” explained the politburo member.
He said Zanu (PF) had resolved that 2012 should be aturning point in the overall indigenization and empowerment drive. The Chiadzwa diamond fields have already been nationalized and highly militarized. The companies allowed to operate there have all been appointed by Zanu (PF). They include Mbada Diamonds, which has very close links to top party officials and is run by the military, and the Chinese-run Anjin Investments.
Human rights abuses in Chiadzwa, documented by Human Rights Watch and other international organisations, continue unabated amid tight security.

Global Witness Ties Diamond Business with Funding Mugabe's Military

Global Witness called for urgent action to prevent a businessman in China from financing Zimbabwe's President Robert Mugabe's military regime.  According to the group's report published today, ''Financing a Parallel Government?,'' Global Witness revealed that Zimbabwe’s Central Intelligence Organisation (CIO) received financing from a Hong Kong-based businessman at the same time that the CIO is alleged to be engaging in a campaign to discredit key members of Zimbabwe’s opposition.

According to Global Witness, CIO members jointly control Sino Zimbabwe Development (Pvt.) Ltd., a diamond, cotton and property development company in Zimbabwe. Their partner is businessman Sam Pa, a prominent member of the Queensway Syndicate, a network of companies with a track record of negotiating opaque resource for infrastructure deals across Africa.
The report also exposed how a Zimbabwean military lawyer owns half of Anjin Investments (Pvt.) Ltd., the biggest diamond company in Zimbabwe’s Marange diamond fields, on behalf of Zimbabwe’s Ministry of Defence.
“Given the violent reputation of the CIO and military, we fear that this money could fund human rights abuses during the forthcoming election,” said Nick Donovan of Global Witness. “Off-budget financing of the security sector undermines Zimbabwean democracy by subverting civilian control over key organs of the state. The international community should investigate the activities of Sam Pa, Sino Zimbabwe Development and Anjin Investments to see whether their actions justify imposing targeted sanctions such as asset freezes.”
Information given to Global Witness by sources within the CIO suggested that Pa provided funding and materials to the organization in return for access to Zimbabwe’s diamond, cotton and property sectors. One CIO document confirmed financial support of $100 million along with 200 pickup trucks. Two sources also told Global Witness that the money has been allocated by the CIO towards ''Operation Spiderweb,'' which are covert activities designed to discredit Mugabe's opposition party head, Prime Minister Morgan Tsvangarai, as well as his appointees, Finance Minister Tendai Biti and Industry Minister Welshman Ncube, although Global Witness cannot confirm the existence of these programs. ''We gave Mr. Pa an opportunity to comment on our findings but he has not responded,'' Donovan said.
While Anjin Investments claims to be the world’s biggest diamond miner, Global Witness revealed earlier this year how the company's executive board members include senior and retired military and police officers, and the Permanent Secretary at the Ministry of Defence, Martin Rushwaya, who is a Mugabe party loyalist. But this week, Global Witness revealed that 50 percent of Anjin’s shares are owned by Brigadier General Charles Tarumbwa, the Judge Advocate General at the Ministry of Defence, acting through Matt Bronze (Pvt.) Ltd., a front for the Zimbabwean military.
“Since ZANU-PF lost control of the Ministry of Finance, they appear to have engaged on a hunt for off-budget financing for the military and secret police,” said Donovan. “Zimbabwe’s civilian government must exercise democratic control over the budgets of security forces. If not, there is a real danger of a shadow security state emerging, with both a monopoly on violence and secret sources of funding.”

Source: Diamonds.net

DCLA updates Diamond Colour Master Set

DCLA is updating several master colour grading stones from the Official IDC Master Set.
The current diamond colour master stones D, E, F ,G, H, I and J are being retired and are now on sale collectively for AUD$52,000.

Offers of interest to purchase these stones can be submitted in writing to info@dcla.com.au for consideration. 

Asian demand for diamonds set to boom

India's diamond exports crashed by more than 44% in May as compared to a year ago period, sparking off panic in the diamond cutting and polishing industry. Though imports of rough diamonds also fell 20% in May, the country's rough diamond imports had jumped 20.3% the month before, in April.
The ``unexpected increase'' in April came under intense scrutiny from government officials, especially since the polished diamond trade was flat at that time. Diamantaires told the visiting regulatory officials that demand for diamonds in India and China is set to far outpace supply, which is limited to production at a small number of mines worldwide.
"The demand for diamonds is set to boom. There is no doubt about this. It will be driven primarily by the growth of the markets in China and India,'' said Maneesh Dhukaje from Hare Krishna Exports, a diamond trading firm.
In India alone, he noted, the market for diamonds is expected to grow faster than that for gold over the next five years, with some estimates pegging it at 1 trillion rupees. During the same time, India and China are expected to represent half the global growth in demand for diamonds.
Meanwhile, at the Hong Kong Jewellery and Gem Fair that concluded last week, some strain was evident in the business community, with most Indian dealers speaking about the external factors that had influenced the market. Traders also referred to the `silence' from the US market, which remains the biggest market for diamond jewellery in the world.
However, demand for light-weight diamond jewellery by China and India's rapidly expanding middle class consumers could counterbalance the expected drop in demand from key markets, traders added.
Consulting firms also have predicted that prices of rough diamonds are set to rise between 3% and 10% due to demand from emerging markets like China, India, Hong Kong and UAE, given the gradual decrease in global production of rough diamonds.
Traders said demand for diamonds is on the rise in India with the affluent class wearing more of them as a style statement and the middle class consumer shifting to the 16-18 carat gold diamond studded jewellery style that is most preferred in the major metros.
Diamond jewellery with low carat gold also appears to have found pride of place in smaller areas and districts of India, especially in Tier-II and Tier-III cities.
"People in these smaller cities are going for 14 carat diamond jewellery sets and even 12 carat sets to suit their shoe-string budgets instead of the usual 18 carat diamond studded jewellery pieces,'' said Dhukaje.
He added that the demand for diamond necklaces and bangles was especially on the rise in smaller cities.
The Indian diamond industry imports rough stones which are cut and polished within the country before they are exported. This part of the business took a major hit in May this year. According to data released by the Gems and Jewellery Export Promotion Council, exports of cut and polished diamonds fell from 51,22,000 carats in May 2011 to 25,74,000 carats in the corresponding period of this year.
In value terms, the fall in exports was from $2,240 million to $1,245 million in the same period. The decline in May was steeper than in April this year, which saw exports decline 35% in terms of value as compared to April 2011.
Diamond traders are blaming the fall in exports to the imposition of a 2% import duty on cut and polished diamonds on January 17 this year, which most traders say has resulted in a dramatic reduction. India's polished diamond exports for fiscal 2011-12 slipped by 17.3% immediately thereafter, say traders.
"At the start of January this year it was a completely different scene. Net polished diamond exports, which is the excess of exports over imports, was recorded at $828.35 million in January 2012, which was a considerable increase considering that the there was a deficit of $84.17 million in January 2011. Net rough diamond imports, which is imports less exports, also rose by 3% to $940.82 million,'' said Shashi Jariwala, diamond trader and exporter.
"Though margins are lower, cut and polished diamonds are imported for the purpose of value addition,'' he added. India imported $1.58 billion worth of roughs in April, up 8.4% as compared to March. The volume of imports also increased, up 42.2% to 14.2 million carats. The average value of imports totalled $111.41 per carat

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King Edward VII's diamond encrusted sword goes on display at Buckingham Palace for Jubilee

Some of the most spectacular treasures from the Royal Collection will go on display at Buckingham Palace this week to mark the Queen's Diamond Jubilee.
 

A Jubilee Celebration, a new exhibition that will be part of the Summer Opening at the Palace, will explore how the gems have been used and worn by monarchs over the last two centuries.

Among the highlights will be the magnificent 2,000 carat Jaipur Sword and Scabbard.

Set with more than 700 white and yellow diamonds, the sword was presented to King Edward VII by the Maharajah of Jaipur, Sawai Sir Madho Singh Bahadur, to mark the king's coronation in 1902. Made from steel and gold, enamelled in blue, green and red, the diamonds are set in a design of lotus flowers and leaves.

Queen Alexandra's Coronation Fan, a diamond-studded ostrich feather fan, made for Edward VII's consort for the coronation, will also be on display.

The exhibition will include several of the Queen's personal jewels, including the Cullinan III and IV Brooch, cut from the largest diamond ever found, and the Coronation Necklace and Earrings, created for Queen Victoria and worn by Queen Alexandra, Queen Mary, Queen Elizabeth, the Queen Mother and the Queen at their coronations.

The Diamond Diadem, set with more than 1,300 brilliant-cut diamonds, which is worn by the Queen on British and Commonwealth stamps and on certain bank notes and coins, will also be on display.
Other jewelled objets d'art from the Royal Collection that will feature in the exhibition include a snuff box, dated circa 1770, that was once owned by Frederick the Great of Prussia.
Encrusted with nearly 3,000 diamonds in elaborate flower motifs, the box is thought to have been inherited by Frederick during his 18th-century reign (1740-1786).
He later gave it to his daughter, Tsarina Alexandra Feodorovna, the consort of Tsar Nicholas I, who passed it to her descendants.
It was among the 1922 inventory of possessions of the imperial family confiscated by the Soviet authorities in 1917, and subsequently came to England, where it was later bought by Queen Mary in 1932.

Volatile diamond prices 'not forever'

A weakening Indian rupee is likely to contribute to volatility in rough diamond prices for the rest of the year, but longer-term price prospects are bright, the chief executive of London-listed miner Gem Diamonds said.

Clifford Elphick, who formed Gem Diamonds in 2005, said prices would eventually resume their upward trend because of the simple fact that demand will continue to exceed supply.
“There’s no question that the volatility in Europe is having an impact, and on top of that the appreciation of the dollar against the rupee is a big issue,” Elphick said in an interview.
“But at the end of the day, supply and demand determine price and I’m confident that prices will get better,” he said.
“There are only so many diamond mines, and the population of the world is wanting ever-more diamonds... people are consuming diamonds more than they are being mined.”
India is the world’s biggest importer of rough diamonds and vies with Japan and China as the second-biggest consumer of polished diamonds.
However, a 6% decline in the value of the rupee against the dollar since January has made it more expensive for Indians to import raw diamonds, while exports of cut diamonds are being restrained by the eurozone debt crisis.
Economic growth in India has also slowed markedly.
Rough diamond prices fell sharply in the second half of 2011 as markets tumbled and investors retreated. Prices stabilised in the first few months of 2012 but have since turned volatile.
“In the very short-term, between now and October-November, we may well be in for choppy rides as confidence disappears,” Elphick said.
“Prices will continue their upward trend over the long term, definitely over the medium term. Over the short term, I can’t be so confident.”
Elphick’s optimism about the longer term is shared by BMO Capital Markets, which said earlier this month that it expected rough diamond prices to rise by between 3% and 7% a year from 2013.
Gem Diamonds said earlier this week that initial production at its Ghaghoo mine in Botswana, which is under development, would be delayed until the first half of 2014, following a ground collapse that killed two employees.
Elphick declined to say when he expected operations to return to normal at the site.
“They’re not back to normal today; they may well be quite soon,” he said. “I don’t want to get back to normal operations if there is any risk of such a thing happening again.”
Production at Ghaghoo was scheduled to start in 2013 at an initial rate of 100 000 carats per year, rising to a peak steady-state production of 780 000 carats per year, according to the company’s website.
Gem Diamonds has two mines in production, the Letseng mine in Lesotho and the Ellendale mine in Australia.
The company considered buying the Ekati mine in Canada earmarked for potential sale by BHP Billiton [JSE:BIL] last year but decided not to proceed.
A deal could have edged Gem closer to FTSE 250-listed Petra Diamonds or even put it ahead of its rival in a sector dominated by giants De Beers - soon to be majority-owned by Anglo American [JSE:AGL] - and Russia’s state-owned Alrosa.
Gem Diamonds, which counts upscale jeweller Tiffany & Co among its customers, continues to explore options for the Ellendale mine, famous for its prized yellow diamonds.
“This is a mine that has a short life,” Elphick said. “It probably has another three or four years of life to it, and short-life operations are not really what we want to have in our portfolio,” Elphick said.
“If a buyer emerged at the right price, we would certainly consider an offer.”
Gem Diamonds’ shares, which have fallen about 18% over the past 12 months, have risen 4% since the beginning of this year. They closed at 200.5 pence on Wednesday on the London Stock Exchange.

Diamond exports plunge 50% in May Imposition of 2% import duty to blame, say traders

Mumbai, June 20
India's diamond exports crashed by more than 50 per cent in May this year compared to the year-ago period sparking off panic in the diamond cutting and polishing industry, which is one of the biggest employers in Western India.
According to data released by the Gems and Jewellery Export Promotion Council (GJEPC), exports of cut and polished diamonds fell from 51.22 lakh carats in May 2011 to 25.74 lakh carats in the corresponding period this year. In value terms, the fall in exports was 44 per cent - from $2,240 million to $1,245 million in the same period.
The decline in May was steeper than in April this year, which saw exports decline 35 per cent in terms of value as compared to April 2011.
Diamond merchants are blaming the fall in exports on the Indian government's decision to impose two per cent import duty on polished diamonds from January 2012 as a measure to conserve foreign exchange.
The data indicates that import of cut and polished diamonds fell 88 per cent as a result. "Though margins were lower, cut and polished diamonds were imported for the purpose of value addition," says Amanbhai Shah, who owns a diamond polishing unit in suburban Mumbai.
However, even the diamond cutting and polishing business at home has also been affected, according to the data. The Indian diamond industry imports rough stones which are cut and polished within the country before they are exported. However, even this part of the business took a major hit in May this year. According to the GJEPC data, imports of rough diamonds fell 20 per cent over May 2011.
Those in the diamond trade say the sharp fall in the Indian rupee has made it expensive for them to import rough stones. Often importers of rough stones trade these with other businessmen who specialise in cutting and polishing them who in turn trade their finished goods with the actual exporters. Since it takes several months for dues to be settled across the chain, traders are wary of taking positions in stock lest they be affected by volatility in the exchange rates, analysts said.

Diplomats to Tour Controversial Zimbabwe Diamond Fields

An illegal diamond dealer from Zimbabwe displays diamonds for sale in Manica, near the border with Zimbabwe.

Western ambassadors are expected to tour controversial diamond fields in Zimbabwe, following an invitation by the government, which is trying to move past reports security forces beat, tortured and killed miners. President Robert Mugabe and his allies are pushing to have Western travel and financial sanctions lifted.

Announcing the visit last week, Zimbabwe’s minister of mines, Obert Mpofu, said he hoped the visit by Western diplomats would put to rest claims of human-rights abuses by security forces in the diamond-mining fields.

“The EU ambassadors and Western country ambassadors are going to Marange [diamond fields] next week.  We said come.  In fact, they asked for that permission a long time ago ...  We are open to scrutiny,”
Mpofu said.

In an interview, European Union Ambassador to Zimbabwe Aldo Dell’Arricia confirmed Western diplomats will visit the Marange diamond fields next week.  He said contrary to what Mpofu told business delegates, it was actually the Zimbabwean government that invited diplomats to visit the fields, which are about 400 kilometers east of Harare.

"There is an issue related to the fact [that] one of the companies, which is listed by the European Union, is the Zimbabwe Mining Development (ZMDC).  Reflection about the measures is something which is taking place independent of this visit," Dell’Arricia said.

The United States, Britain and other countries imposed sanctions on companies it deemed to be helping Mugabe and his party oppress political opponents and suppress human rights.

The ZMDC is a government-owned company that controls minerals in Zimbabwe and has several board members who are on the EU sanctions list.  It is involved in mining diamonds in Marange, and linked to human-rights abuses.

Until recently, the Marange diamond fields were off-limits, except to Mugabe’s allies.  Many have seen this softening stance as a way to convince the West to lift the sanctions imposed in 2002. Mugabe has on several occasions argued that he respects human rights and is warming up to the West.

Harry Winston Sees Diamond M&A as Prices Fall

Harry Winston Diamond Corp. (HW), the only gem producer and jewelry retailer in Canada, is seeking more mining assets including Rio Tinto Group’s share of a joint venture as two of the world’s largest miners consider quitting diamonds.
Rio and BHP Billiton Ltd. (BHP) are weighing a sale of their respective diamond interests as commodity prices decline and the companies turn their attention to investing in other materials such as iron ore and copper. That may offer an opportunity for Toronto-based Harry Winston to boost production ahead of what Chairman and Chief Executive Officer Bob Gannicott sees as a looming shortage.

 

Harry Winston Diamond Corp. Chief Executive Officer Bob Gannicott said in an interview, “There are opportunities on the mining side where there haven’t been reasonable opportunities in my view for the last 15 years or so.” Photographer: Norm Betts/Bloomberg

“There are opportunities on the mining side where there haven’t been reasonable opportunities in my view for the last 15 years or so,” Gannicott said in a June 13 telephone interview from London.
Prices for rough diamonds on average have declined about 15 percent this year, according to Gannicott, 65. Demand for higher-value stones has weakened as polishers who use European banks find it more difficult to obtain credit, he said. While the outlook for the rest of year is “pretty chaotic” as Europe is gripped by economic turmoil, demand will outpace supply in the longer term, Gannicott said.
“I think that when things do start to improve it’s actually likely to look a lot better perhaps faster than people might be expecting now,” he said. “The beginnings of this recession, if you like, are a long time behind us now.”

Strategic Review

Harry Winston slipped 0.1 percent to C$12.29 at the close in Toronto. The shares have gained 13 percent this year compared with the 3 percent decline in the S&P/TSX Composite Index. That was also the biggest gain among six Canadian diamond companies with a market value of $50 million or more, according to data compiled by Bloomberg.
Harry Winston posted net income of $11.6 million on sales of $192.5 million in the quarter through April 30. Profit excluding one-time items has missed analysts’ estimates four of the last five quarters, according to data compiled by Bloomberg.
De Beers, 45 percent-owned by London-based Anglo American Plc (AAL), is the largest diamond producer, with output of 31.3 million carats in 2011. Harry Winston’s share of production at Diavik, its only source of rough gems, was 2.7 million carats last year.
Rio, the world’s third-largest mining company, said in March that as part of a strategic review it’s weighing a sale of diamond mines including the Diavik mine in Canada’s Northwest Territory.

BHP Bids

Harry Winston, which owns 40 percent of Diavik, has the right of first refusal on Rio’s 60 percent stake and would “be interested in putting that to work,” Gannicott said. Illtud Harri, a spokesman for London-based Rio, declined to comment.
BHP, the world’s biggest miner, has sought bids for its diamond assets including the Ekati mine, which is also in the Northwest Territories. Harry Winston and groups led by private- equity firms KKR & Co. and Apollo Global Management LLC (APO) were in talks to buy Ekati, two people with knowledge of the matter said in March. Gannicott declined to comment on Ekati.
BHP and Rio together accounted for about 16 percent of global production by value in 2010.
“They tried to build a critical mass in the diamond space,” Edward Sterck, an analyst at BMO Capital Markets, said in a phone interview from London. “Rio’s been more successful than BHP, but they just haven’t been able to gain the market share that they have in other commodities.”

Merger Opportunities

Exploration companies searching for deposits and developers of existing diamond projects find it difficult to raise funds as investors stay away from risky investments, Gannicott said.
Shares of junior diamond stocks are lower than they have been for some time, which could create potential merger and acquisition opportunities in the sector, Sterck said.
“Uncertainty around Europe does seem to be weighing on sentiment in the diamond space and we’ll probably see prices remain at current levels throughout the rest of 2012,” he said.
In the longer term, a lack of new supply and strong demand growth for diamonds, particularly from developing markets including India and China, mean that the outlook is “extremely positive,” Sterck said. Diamond production probably peaked in 2006 at 162 million carats, he said in a report dated June 7.
“There’s simply been no significant discovery since the early 90s really, and that’s despite an awful lot of effort going into exploration,” Sterck said in the interview.

Retail Unit

Like De Beers, Harry Winston is a consumer brand as well as a miner. The Canadian company sells luxury jewelry and watches through a separate retail unit, which operates stores from Paris to Dubai.
Gannicott, a geologist, was appointed CEO of Canada’s Aber Resources Ltd. in 1999 and renamed the company in 2007 after acquiring the Harry Winston jewelry brand. While the mining and retail operations run as separate units, the involvement on both sides of the business means Harry Winston has insight into pricing and market conditions for both rough and polished gems, Gannicott said.
Retail demand for polished-diamond products remains “generally very good” although Italy, an important European market for diamonds, has contracted, Gannicott said.
“The Italian economy is really feeling the pain and so there isn’t really much domestic consumption of diamond products in Italy at the moment,” he said. “Although it’s not one of the bigger ones in the world it’s certainly the biggest consumer in Europe,” he said.

Bank Loans

The difficulties diamond polishers face in obtaining loans mirrors the situation during the financial crisis in 2008 and 2009, according to Oliver Chen, a New York-based Citigroup Inc. analyst, said in a telephone interview. The situation is probably more temporary though, especially as demand for diamond jewelry has held up relatively well, he said.
Polished-diamond prices declined 13 percent in 2008 and 2009, according to an index from data provider PolishedPrices.com. Lack of credit is delaying purchases by polishers, Gannicott said.
“That’s thrown them into a fair bit of chaos so they’re really trying to minimize the amount that they are taking through their system while they sell their stock,” he said.

Diamond prices drop like a stone as global economy slows

Diamond prices are on the slide again, as macro economic gloom continues. The Rapaport Diamond Trade Index, which is derived from the average asking price for the top 25 best-quality one-carat diamonds and is seen a global benchmark, fell to $9,391 last week.

Rough stones giving back the price increases seen in the earlier part of the year. 

This represents a fall of 3.8pc in the year to date and 9.8pc over the past 12 months. “This decline should remain in context, as the S&P GSCI commodity index has declined by 9.8pc and 14pc over the same time period,” said Kieron Hodgson, an analyst at Charles Stanley.

He added that similar trends are being seen on other benchmarks, with “rough stones giving back the price increases seen in the earlier part of the year”.

“Our forecasts for both rough and polished diamond prices to be around 5pc lower for the year shall remain unchanged at this point,” he said.

However, the long-term trend looks positive. Worldwide demand for rough diamonds may climb more than 6pc between 2010 and 2020, according to consultants Bain & Co. This is higher that the expected growth in diamond supply.

Because of these expected demand trends, the Rapaport Group plans an online diamond exchange for banks and other financial institutions to benefit from rising demand in China and India. This RapX exchange will open in October.

Copper bounces on stimulus hopes
Copper prices rose last week for the first time in seven weeks. The European debt crisis is coming to a head and speculators are betting that more stimulus measures will be announced worldwide to avoid the crisis deepening. However, London Metal Exchange stockpiles rose last week at the highest rate since January 2009, rising 8.6pc to 249,450 tonnes, so this could limit price gains. Copper is the most economically sensitive metal because of its wide range of uses.

CVD Single Crystal Diamond

Scio Diamond Technology Corporation (OTC-BB: SCIO.OB) announced today that results from their first low-level growth runs have created in excess of 50 gross carats of useable single crystal CVD diamond.   Scio has brought to life seven reactors thus far.  All 10 initial reactors are to be in full production during their second quarter.
 
Joe Lancia, Scio Diamond's CEO said, "After meticulous testing and phased startup we have made our first S3532 technology production run and received a positive result.  The output of this run gives us material for our self-sustaining seed process, as well as the ability to supply our clients' material to begin their own testing.  This is an exciting time."
Scio is beginning to take orders and complete production plans for the next 12 months.  Quantities of gross diamond will be increasing on a regular basis, as Scio completes and comes to full production on it S3532 technology and transitions to its S3724 technology.  "The S3724 technology has the potential to increase the S3532 technology by over 50%," says Lancia.
As the first seven reactors complete production testing and have entered into the first phase of production, the last three reactors are being readied to start their startup testing in a few short weeks.  Their startup is inclusive of the rigorous levels of testing of the previous seven.  This continues our completion of successful milestones to initiate and build production during its fiscal first quarter ending June 30 and to phase into full production during the following quarter ending September 30.

About SCIO Diamond

Scio Diamond will employ a patent-protected chemical vapor depositionprocess to produce high-quality, single-crystal diamonds in a controlled laboratory setting, with such diamonds referred to as "lab-grown" or cultivated diamonds. The diamonds are intended to have the identical chemical, physical and optical properties as diamonds found in the earth, and the company's highly controlled manufacturing process will enable it to produce very high-quality, high-purity, high volume, single-crystal colorless, near colorless and fancy colored diamonds.
Scio's technology will permit it to produce lab-grown diamond in size, color, and quality combinations that are very rare in nature. SCIO intends to offer diamonds in limited quantities as jewelry and in the technology arena as the material operating system of the future.

Scio Diamond Technology Corporation (OTC-BB: SCIO.OB) announced today that results from their first low-level growth runs have created in excess of 50 gross carats of useable single crystal CVD diamond.   Scio has brought to life seven reactors thus far.  All 10 initial reactors are to be in full production during their second quarter.

Joe Lancia, Scio Diamond’s CEO said, “After meticulous testing and phased startup we have made our first S3532 technology production run and received a positive result.  The output of this run gives us material for our self-sustaining seed process, as well as the ability to supply our clients’ material to begin their own testing.  This is an exciting time.”

Scio is beginning to take orders and complete production plans for the next 12 months.  Quantities of gross diamond will be increasing on a regular basis, as Scio completes and comes to full production o n it S3532 technology and transitions to its S3724 technology.  ”The S3724 technology has the potential to increase the S3532 technology by over 50%,” says Lancia.

As the first seven reactors complete production testing and have entered into the first phase of production, the last three reactors are being readied to start their startup testing in a few short weeks.  Their startup is inclusive of the rigorous levels of testing of the previous seven.  This continues our completion of successful milestones to initiate and build production during its fiscal first quarter ending June 30 and to phase into full production during the following quarter ending September 30.

About SCIO Diamond

Scio Diamond will employ a patent-protected chemical vapor deposition process to produce high-quality, single-crystal diamonds in a controlled laboratory setting, with such diamonds referred to as “lab-grown” or cultivated diamonds. The diamonds are in tended to have the identical chemical, physical and optical propertie s as diamonds found in the earth, and the company’s highly controlled manufacturing process will enable it to produce very high-quality, high-purity, high volume, single-crystal colorless, near colorless and fancy colored diamonds.

Scio’s technology will permit it to produce lab-grown diamond in size, color, and quality combinations that are very rare in nature. SCIO intends to offer diamonds in limited quantities as jewelry and in the technology arena as the material operating system of the future.

Source: DiamondNews (http://s.tt/1erBc)

First diamonds from Karowe mine auctioned

	Over P42m realised from 26,196 carats sold

Botswana Stock Exchange (BSE) listed diamond junior, Lucara Diamonds says it has completed the first sale of diamonds from its recently opened Karowe mine in the Boteti region. Karowe, formerly known as AK6 mine, was commissioned three months ago and targets to sell 300,000 carats in 2012. In a statement, Lucara, which has a primary listing on the Toronto Stock Exchange (TSX) said 26,196 carats of Karowe diamonds were sold through its new online auction system fetching over P42 million in revenue. "A total of 35 individual lots containing 29,339 carats of diamond were put up for sale through the on-line auction.
"Of the 35 lots, 30 were sold for a total revenue of $5.64 million at an average diamond value of $215 per carat.
Of the diamonds sold, the parcel included a 25.9ct stone which sold for $5,022 per carat," reads the statement.Lucara is the second company to hold independent diamond auctions in Gaborone outside the Diamond Trading Company (DTC) framework after another diamond junior, Firestone Diamonds kickstarted tenders in Gaborone in December 2010.
William Lamb, president and CEO, commented, "With the first sale of Karowe production, Lucara has achieved the final milestone in its transition to an operating company. It is a direct reflection of the current status of global markets that not all diamonds were sold during this first auction; however, we are extremely bullish about the market outlook overall and look forward to our future sales. Our new Karowe Mine produces high quality diamonds and we can expect to always see steady demand regardless of the cycle the market is in".
At the end of May 2012, greater than 33,500 carats of diamonds were recovered from 85,000 tonnes of ore processed at Karowe. The company says the recovered grade of 39 carats per hundred tonnes supports the resource grade estimate for the area of the pit being mined. The mine production plan for the remainder of 2012 includes ore from the North and Centre Lobes and will deliver an average ore grade of approximately 20 carats per hundred tonnes (cpht).
Following the unexpected closure of Firestone's BK11 mine recently, the Karowe mine formerly known as AK6, is the only operating mine outside of the Debswana stable. Later this year, government through its newly incorporated private company, the Okavango Diamond Trading Company, is expected to start its own independent diamond auctions.
Okavango Diamond Trading Company will this year purchase, market and sell 11 percent of Debswana production that the state is entitled to through the new marketing agreement signed with De Beers last year. The new company is expected to independently auction an estimated $300 million (P2, 2 billion to $350 million (P2, 6 billion) worth of diamonds on the open market per annum from Debswana's average $3 billion-a-year supply.

Mpofu defends diamond firms

 

Mines and Mining Development minister Obert Mpofu has defended diamond mining companies operating in Zimbabwe, following criticism by Finance minister Tendai Biti that they were not remitting proceeds to the fiscus.

Mpofu told delegates that attended the Centre for Public Accountability’s third annual conference held in Harare yesterday, mining firms were meeting their obligations.

Biti last month claimed Anjin Investments of China had not remitted a single cent from its Marange diamond fields since it started operations.

He said failure by Anjin to pay proceeds from diamond sales to Treasury would impact negatively on the $4 billion national Budget where $600 million was expected to come from the sale of the gems.

“Diamond producers continue to meet their obligation to the country by remitting dividends to Treasury from time to time,” Mpofu said.

“I really don’t deal with figures, but there have been so much misplaced utterances.

“Why is Anjin not paying so much? I cannot go to Anjin to ask what they have paid this month.”

Mpofu said the country’s diamonds in 2011 amounted to $166 million excluding royalties and value added tax.

“I am minister of Mines and Mining Development and my responsibility has nothing to do with revenue collection,” he said.

“The responsibility of collecting revenue is for Zimbabwe Revenue Authority (Zimra) not the Ministry of Mines.

“Why don’t you ask Zimra those questions? Please let’s get our facts clearly.

“The responsibility of the line ministry is not to complain, but to do the work,” Mpofu said.

“We are not denying Zimbabweans information. I have been reading the figures to you.

“There is nothing we have hidden from Zimbabweans. No Ministry of Mines has ever collected revenue anywhere in the world.”

Mineral exports for 2011 surged to $2,45 billion from $1,6 billion in 2010 driven by performances in platinum, gold and diamond production.

Mpofu said diamond production will rise this year beyond the Medium-Term Plan target of 12,1 million carats due to the green light from the Kimberley Process Certification System to sell diamonds on the international market.

He said the outlook for the mining sector remained positive, but the unavailability of medium to long-term credit facilities for both working capital as well as power shortages continued to be major impediments to growth.

“Regrettably, if these enablers are not resolved, they will slow down growth,” he added.

Element Six Uses Synthetic Diamond to Demonstrate Better Quantum Bit Memory Capability

Luxembourg-headquartered synthetic diamond supermaterials manufacturer, Element Six has employed its chemical vapor deposition (CVD) grown single crystal synthetic diamond to facilitate a quantum bit to exhibit memory coherence greater than one second at room temperature.

This places synthetic diamonds at an advantage over rival materials as no other material has been able to exhibit such long duration of memory at room temperature and without complex infrastructure such as cryogenic cooling.
The quantum electron spin can be likened to the two states of a bar magnet with 1 denoting “up” and 0 denoting “down”. In quantum mechanics, the quantum bit (qubit) can represent both 1 and 0 simultaneously. This property forms the basis of quantum computing and can be extended to other magnetic sensing applications. The quantum information processing using synthetic diamond consists of controlling the atomic sized impurities.
Element Six has created synthesis processes, which are characterized by impurity control in the range of parts per trillion. The nano-engineering controlled CVD growth of synthetic diamonds is the result of collaborative research between Harvard University, Max-Planck Institute for Quantum Optics and California Institute of Technology. The study, which is termed as the quantum information research collaboration, focused on developing a synthetic diamond with only one specific impurity or defect called the Nitrogen Vacancy centre. The N-V centre can be spin polarized at room temperature using a green light source and its state can be read out using existing techniques before quantum de-coherence takes place.
While the finding paves the path for future advancement in quantum communications, they have near term applications in quantum sensor technologies at the nanoscale for chemical and biological imaging processes.

Diamond exports halve in April

The country's rough and polished diamond exports for April dropped to P1.26 billion or less than half of their value in March, latest Bank of Botswana figures indicate.
For March, diamond exports were pegged at P2.95 billion, trending higher from P2.2 billion in February. At P1.26 billion, April's exports are seven percent lower than in April 2011, but healthily higher than the year-to-date low of P805 million recorded in January 2012. In US dollar terms, the April exports were pegged at US$173.8 million, with the Pula appreciating by 0.4 percent against the greenback.While the BoB's data contains no trend analysis, analysis of previous statements by leading diamond industry players sheds light on the April drop in exports.  Read together, the statements suggest the April slump is part of the seasonal cycle of exports, rather than a result of the slowly emerging pressure on commodity prices caused by economic slowdowns in several European states. Late last year, Diamond Trading Company (DTC) CEO, Varda Shine, told Mmegi Business that first quarter diamond demand was driven by the Indian wedding season and the Chinese New Year. Last year, China overtook Japan as the world's second biggest market for diamonds after the United States.
Other experts have been positive on diamond prices and demand this year, pointing to the continuing mismatch between demand for and supply of high quality stones."The market for rough diamonds has continued to improve following the correction to prices in September 2011," Gem Diamonds said in a recent statement. "The Gem Diamonds Price Index has shown increases in every sale since this correction and is up some seven percent in 2012.  "Gem Diamonds anticipates rough prices across the market to continue increasing into the second quarter of 2012 and, despite the relatively thin volumes being traded in the polished market in high end goods, prices in these goods both in the polished wholesale market and high end branded auctions are expected to improve further."
Earlier this year, De Beers Botswana CEO, Neo Moroka, told Mmegi Business that the demand for diamonds has been strong at the sights or auctions held by the Diamond Trading Company Botswana (DTCB) since the beginning of the year. He said the sales were positive despite the fact that cutting and polishing firms still had stockpiles of diamonds from sights held last year.
"Due to the downturn at the end part of last year, companies have been getting rid of the stockpiles and when the industry is selling off stockpiles, the performance is not usually good," he said. "But much to our surprise, our sights (rough diamond auctions) in the first quarter of the year have been above expectations."The April drop, other analysts believe, could be an indicator of higher inventory levels among diamond manufacturers and retailers, as a consequence of the strong February and March sales. Higher inventories and softer market demand generally mean lower rough and polished diamond sales.

Plan to redefine conflict diamonds rejected

THE United States, Canada and other western nations have failed in a bid to redefine “conflict diamonds” which would have given them greater scope to block Zimbabwe’s diamonds, reports said Thursday. The Kimberley Process, which is currently chaired by the United States, is meeting in Washington DC from June 4 to 7 for its annual meeting to discuss the mining and trading of conflict diamonds. On the table were plans by western countries and their NGOs to reform the KP certification scheme to address human rights violations. But the proposal “hit a brick wall as the idea was rejected by African and Asian members during closed-door discussions by the Working Group on Reform”, according to Sunday Mail editor, Brezhnev Malaba, who is with the Zimbabwe delegation in Washington DC. Malaba said KP member countries had been sent a questionnaire in advance of the meeting exploring whether the definition of conflict diamonds must be broadened to encompass “human rights” issues, and 75 percent of the respondents had shot down the proposal. With resolutions of the KP deliberations not set to be published until Friday, the Zimbabwe delegation was confident the motion had been defeated. One African delegate said: “During the Working Group on Reform, attempts by the US to go into the merits or de-merits of changing the definition of conflict diamonds was totally resisted. “The whole motion was shot down on account of its defective methodology. If the recent survey clearly showed that more than 75 percent of the members were against redefinition, on what basis was the US trying to force the matter through?” The Kimberley Process, founded in 2003, groups the diamond industry, rights groups and 75 countries to certify rough diamonds as "conflict-free" to assure purchasers they are not funding violence. It was born after wars in Sierra Leone and Liberia that were fuelled by "blood diamonds." The KP originally banned diamonds from Marange after the army moved in to drive out thousands of diamond hunters amid claims of human rights abuses. But subsequent monitoring missions by the KP have revealed no rights abuses. But even then, the United States, Canada and their allies continue to ban Zimbabwe diamonds and the flow of cash to the companies doing mining which President Robert Mugabe says is a deliberate plot to scuttle Zimbabwe’s economic recovery. In February, rights group Global Witness, which quit the KP, cited fears that Mugabe loyalists were using diamond revenue as an "off-budget cash cow" instead of rebuilding the shattered economy. It also said unspecified amounts of Zimbabwe's diamond earnings were being stashed away in tax-free havens and could be used to finance violence and intimidation in upcoming elections. But this stance is not supported by Zimbabwe’s finance minister Tendai Biti who wrote a letter to the United States treasury last December pleading for the removal of a ban on Marange diamonds. “Zimbabwe is a poor fragile economy and therefore it must be allowed to sell and benefit from its resources,” Biti said. “In my budget, there are capital projects of US$600 million which are totally dependent on diamond revenues.”

Rapaport Group Plans Diamond Bourse for Banks, Brokers

The Rapaport Group plans to set up an online diamond exchange from October that’s open to banks, brokerages and other financial firms as well as industry members to benefit from increased Asian demand.
The exchange, to be called RapX, will offer real-time bid/ask prices and clearing services for institutional investors, Chairman Martin Rapaport said in interviews on the telephone and by e-mail. At present, about 7,200 industry members use Rapaport’s RapNet online exchange to trade, with about $6 billion worth of diamonds listed. There’s no estimate yet on the value of the diamonds that’ll be available on RapX, he said.
Global rough-diamond demand may climb more than 6 percent a year in the decade to 2020, exceeding growth in supply, Bain & Co., a consulting firm in Boston, has forecast. China, the largest metals user, may overtake the U.S. to become the top buyer in 2015, according to the Antwerp World Diamond Center.
“Strong demand from top consumers in India and China in 2011 supported investment opportunities in this market,” said Sergey Filchenkov, a Moscow-based analyst at IFC Metropol.
Prices of so-called top-quality gems climbed 22 percent in 2011, the biggest advance since at least 2006, according to the RapNet Diamond Index, which calculates the average weekly price of the 25, best-quality 1-carat diamonds. A carat is a fifth of a gram. Spot gold rose 10 percent in 2011, rallying for the 11th straight year on increased demand.

‘Consumption Story’

“The bottom line is the consumption story, especially in China,” said New York-based Rapaport, who introduced reports bearing his name in 1978, three years after becoming an apprentice diamond cleaver in Antwerp. “Diamonds are a store of value -- similar to gold.”
While the existing RapNet exchange that’s used by the industry is a so-called peer-to-peer network, where people trade directly with one another, the potential sellers and buyers on RapX won’t know each other, Rapaport said.
“The diamond world used to be a cozy market based on relationships,” said Claudio Ribeiro, chief executive at Carat Ventures, a Singapore-based diamond-investment company that uses the Rapaport index as part of its pricing model. “Now, the market has expanded beyond Antwerp and Israel.”
The U.S. accounted for about 38 percent of the global diamond market in 2011, China 11 percent and Japan and India 10 percent each, according to De Beers, which produces about 35 percent of the world’s rough diamonds.

Asia’s Millionaires

China, India and Singapore posted the biggest gains in millionaires last year as Asia countered a decline in wealth in western Europe and the U.S., according to Boston Consulting Group. Millionaire households in China rose 16 percent to 1.43 million, while those in Singapore climbed 14 percent to 188,000 and India saw a 21 percent increase to 162,000, the Boston-based firm said in a report on June 1. Millionaire households in the U.S. fell by 129,000 to 5.13 million.
Graff Diamonds Corp., the London-based jeweler, intends to open 11 stores in Asia over two years to capitalize on rising demand, Chief Executive Officer Francois Graff said on May 27, before the company shelved plans for a share sale in Hong Kong. Singapore Diamond Exchange Pte. Ltd. has partnered with IDEX Online to sell diamond portfolios at minimum prices of $250,000 from July, majority shareholder Alain Vandenborre said May 22.
Rye Brook, New York-based IndexIQ Advisors LLC applied to the U.S. Securities and Exchange Commission in March to list an exchange-traded fund backed by diamonds, according to a filing. The company, which runs exchange-traded products, didn’t specify on which exchange it wants to list the diamond fund.
Rio Tinto Group and BHP Billiton Ltd. (BHP) are seeking to sell their diamond assets. Rio said in March 27 it was considering selling the business as the mines in Canada, Australia and Zimbabwe no longer fit its strategy. BHP announced Nov. 29 that it’s studying the sale of some or all of its diamond unit.
Rapaport USA, Inc., based in Las Vegas, Nevada, owns the Rapaport - RapNet Diamond Trading Network.

Kimberley Process Meeting Begins As Rights Watchdog Urges Focus on Zimbabwe

The Kimberly Process intersessional meeting kicked off in Washington Monday with Human Rights Watch urging the diamond monitor to tackle what it called continuing human rights violations in Zimbabwe's Marange fields.
The meeting, which runs through Thursday, will take up a range of topics related to the mining and trading of conflict-free rough diamonds, a press statement from the State Department said.
The Zimbabwe delegation comprises Mines Minister Obert Mpofu, Attorney General Johannes Tomana and civil society members, including prominent diamond campaigner Farai Maguwu.
Human Rights Watch Africa director, Daniel Bekele urged the Kimberley Process, under the chairmanship of Washington, to "address the ongoing rights abuses in Zimbabwe’s Marange fields and the lack of transparency by mining companies operating there.”
"The KP meeting should demand more tangible progress from Zimbabwe and focus on reforming its certification scheme so that it can tackle the human rights problems that taint diamond production," Bekele said in a statement.
But minister Mpofu vowed he will object to any discussion that brings up the Marange rights issue.
"That will be resisted by countries that want to see the KPC succeed. It was very clear from the opening remarks that all such attempts to raise contentious issues will not be entertained," he told VOA after Monday's session addressed by Kimberley Process chair, Gillian Milovanovic among other dignitaries.
Regional Information and Advocacy coordinator, Dewa Mavhinga, of the Crisis in Zimbabwe Coalition, said the diamond monitor should not shy away from the Harare rights issue.
The Kimberley Process, charged with preventing the trading of so-called blood diamonds on the formal market, has struggled to deal with diamonds from Marange, with Western countries maintaining the mining of the rough gems is done at the expense of human rights.

US allows Zimbabwe officials in for diamond meeting

The Obama administration has granted visas to two senior officials from Zimbabwe to attend a meeting of an international body charged with monitoring and preventing the sale of blood diamonds, despite human rights concerns and financial sanctions against the pair.
The State Department said Sunday that Zimbabwe's Attorney General Johannes Tomana and Minister of Mines Obert Mpofu would be part of the country's delegation to the U.S.-hosted meeting of the Kimberley Process that begins on Monday.
The department would not confirm that the two men had been given visas, citing privacy concerns, but officials acknowledged that they would not be able to participate if they did not have proper travel documents.
Both men are subject to U.S. financial sanctions under an executive order because of their positions in Zimbabwe President Robert Mugabe's government, which is accused of numerous human rights abuses. They are not covered by a travel ban.
.In addition, the department noted that as the current chair of the Kimberley Process, the United States is "obligated to facilitate the entry" of participants.
Hillary Renner Fuller, a spokeswoman for the State Department's Bureau of African Affairs, said the participation of the officials "is in no way indicative of an easing of U.S. concerns about the human rights situation in Zimbabwe, nor a change in our sanctions policy."
However, other officials said the decision to allow Tomana and Mpofu to attend was the subject of debate within the administration with some arguing against because of the human rights concerns. Those officials spoke on condition of anonymity to discuss internal deliberations.
The U.S took the helm of the Kimberley Process earlier this year amid controversy after a major human rights watchdog quit, accusing the body of refusing to address links between gems, violence and tyranny, notably in Zimbabwe.
Rights group Global Witness left the body in December, alleging it had failed in Ivory Coast, Venezuela and Zimbabwe, after the Kimberley Process a month earlier agreed to let Zimbabwe trade some $2 billion in diamonds from fields where critics say miners have been tortured. Zimbabwe denies allegations of human rights abuses in the fields.
The departure of Global Witness raised questions about the credibility of the process. At the time, the Obama administration said it understood and appreciated the group's concerns but that the U.S. would stay in the body to address the challenges and press it to reform to restore its credibility.
Human Rights Watch has accused Zimbabwean troops of killing more than 200 people, raping women and forcing children to search for the gems in Marange fields.
In February, Global Witness cited fears that Mugabe loyalists were using diamond revenue as an "off-budget cash cow" instead of rebuilding the shattered economy. It also said unspecified amounts of Zimbabwe's diamond earnings were being stashed away in tax-free havens and could be used to finance violence and intimidation in upcoming elections.
Mugabe's party has denied hoarding any diamond revenue.
The Kimberley Process, founded in 2003, groups the diamond industry, rights groups and 75 countries to certify rough diamonds as "conflict-free" to assure purchasers they are not funding violence. It was born after wars in Sierra Leone and Liberia that were fueled by "blood diamonds."

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