Singapore's diamond market shines on luxury, investment appeal

The recent showing of a massive diamond in Singapore may herald a surge in the market for gems in the wealthy city state - or so hopes the diamond trader who brought it in, betting on rising demand both for luxury and investment potential.
The 110-carat "Yellow Dragon" diamond, valued at $11 million to $15 million, would normally have been showcased in more established diamond markets such as Geneva, New York and London, said Vihari Sheth, managing director of Vihari Jewels and a third-generation diamond trader.
But Sheth decided to bring the stone to Singapore first due to growing interest for precious stones in the city-state, which she said has the potential to be on par with more developed gem markets within a decade.

"There's always going to be demand for something which is this high-end and exclusive," she said of the yellow diamond. "The person has to find the diamond, the diamond doesn't find the person."
Sheth said 5-to 20-carat diamonds, valued anywhere from $500,000 to $6 million, are selling quickly. Most of her clients, who tend to be from their 40s to early 50s, are permanent residents of Singapore such as Indonesians, Indians and Chinese.
Her move is part of a broader trend of luxury product promoters shifting focus to Singapore and Asia from the West - and for good reason.

Lucapa Diamond Company to raise A$5.7M, after Lulo diamond success

Lucapa Diamond Company , plans to raise A$5.7 million to expand its kimberlite exploration program at the Lulo Diamond Concession in Angola.

The company had started drilling in September after it previously recovered a 131 carat diamond – amongst other diamonds – that was determined to have many features of a rare Type IIa diamond.

This was valued at US$3.5 million by Independent Diamond Valuers, which also inspected the other diamonds and stated that Lulo had the potential to produce diamonds far better than the average global production.

Lucapa’s original drilling program was targeted at finding the source or sources of the large gem-quality alluvial diamonds the company has already recovered.

This targets prospects selected by international diamond expert Manfred Marx from a list of 247 targets.

The company will now carry out a low-level aeromagnetic survey that includes a 725 square kilometre strip close to where the 131 carat diamond was recovered.

Lucapa expects the survey to increase the number of priority kimberlite to be drill tested.

Proceeds will also be used for licence renewal costs and for working capital.

Lulo is located in the diamond rich Lunda Norte Province and is surrounded by global diamond giants including De Beers, Alrosa, SDM and Metalex.

Rihanna Splashes Out On Diamond Bracelets

Rihanna has apparently bought a diamond bracelet for every VIP guest coming along to her next world tour.
 
The singer is showcasing her new record Unapologetic around the globe in 2013, and is said to have bought the lavish jewellery from her own personal funds.
Her management team were thought to have been unsure of the idea.


The jaunt kicks off in New York on March 8, and supports the new album due November 19.
'Diamonds' recently became her sixth UK No1 single, beating One Direction's 'Live While We're Young' and Adele's 'Skyfall'.

De Beers Production Falls 31% in Q3 in Response to Market Conditions

De Beers' diamond production fell 31 percent to 6.4 million carats in the third quarter of 2012. The decline has dragged down production so far this year by 20 percent, signaling that total rough diamond supply to the market will contract significantly in 2012.

 

The decline in supply was pinned on market conditions and the Jwaneng slope failure in June 2012 which temporarily prevented access to the main ore body, parent company Anglo American said in a production report today (Thursday).

If market conditions are a leading reason for reduced production, this means the company has slowed down production on purpose, preferring it to creating an enlarged inventory.

Anglo said market conditions reflect a combination of a softening in the polished diamond market and a credit constrained rough diamond market.

"The current operational focus is on maintenance, waste stripping and safety improvements, ensuring the mines are well positioned to respond to an increase in demand once market conditions improve," it sated.

The biggest drop in production was reported by Debswana, which mines in Botswana where Jwaneng is located. It mined 4.4 million carats, a 37 percent year-over-year decline.

De Beers Consolidated Mines in South Africa mined 1.3 million carats in the third quarter, a 28 percent decline.

Conversely, Namdeb in Namibia increased production by 36 percent to 419,000 carats.

In the first nine months of 2012, De Beers mined 19.8 million carats, compared to 24.8 million carats extracted in the first three quarters of 2011.

Anglo American's gold production increased 125 percent to 39,000 ounces.  

Source:idexonline

Kimberley Process Certification Scheme advocates online chat on conflict diamonds

The KPCS has sent invitation to the industry stakeholders across the world and the general public on social media and US state government website http://conx.state.gov/digital-diplomacy, and www.ustream.tv/conx to join live chat with KPCS chair Milovanovic. She will answer questions on conflict diamonds and the international system for managing trade in rough diamonds to exclude those who fund conflict.

At the 35th World Diamond Congress (WDC) in Mumbai last week, Milovanovic had called upon the global diamond industry to rise up to a new challenge and sought evolution of the KP in order to restore the consumer confidence in diamond products.
Milovanovic stated "Within the KP - and that includes all of you in the industry - we need to discuss and adopt a new definition of 'conflict diamonds', one that will encompass agreed situations of conflict in which diamonds are directly involved. KP certificates must continue to ensure that the rough diamonds are free from conflict; certification should not address human rights, financial transparency, and economic development, which are better advanced through the exchange of best practices."
Milovanovic said the additional certification standards beyond the current definition should apply only to armed conflict and violence that is demonstrably related to rough diamonds and independently verified. It should not apply to isolated, individual incidents, or to circumstances or situations in which an armed conflict exists unrelated to the diamond sector.
According to Milovanovic, KP countries are catching an increased number of false certificates, and we have ensured that they are sent immediately to World Customs Organization and are uploaded to a central location on the KP website so customs officials worldwide have access to them.
"Change in the conflict diamond definition should not hurt the sentiments of Zimbabwe and other African countries. Being the founder members of KP, India and its industry stakeholders will wholeheartedly support new reforms," said a senior office-bearer of Gems and Jewellery Export Promotion Council (GJEPC).

South Africa’s State Trader Looks to Buy Diamonds Abroad

South Africa’s State Diamond Trader (SDT) is looking to purchase rough diamonds from other countries, in particular Zimbabwe, as it was unable to procure sufficient local goods to advance South Africa’s beneficiation sector.


The trader noted shortcomings in its current operations since it can only buy run of mine production from local diamond mining companies, the majority of which is not suitable for cutting and polishing.

The SDT is a government entity mandated to buy up to 10 percent of South Africa’s run of mine diamond production to make available for local manufacturers to develop the country’s cutting and polishing industry. Critics of the legislation governing its operations have long argued that the run of mine production would not provide sufficient gem-quality diamonds to ensure a vibrant beneficiation industry.

Target clients generally require a narrow range of rough diamonds that produce round, 1 carat and larger, SI1+ clarity, I+ color polished stones, the trader explained in its annual report for fiscal year that ended March 31, 2012 published recently.

The trader reported that only 6 percent of South Africa’s production by volume, representing 51 percent by value, was suitable for beneficiation in the fiscal year. While the legislation is unlikely to change in the near future and local producers appear unwilling to supply better quality goods to the SDT beyond what they are required by law, the trader said it is looking at alternative sources from other countries.

“This risk [of unsuitable supply] could be mitigated by purchasing suitable rough diamonds from other countries,” said Yekani Tenza, the chairperson of SDT’s audit and risk management committee. “In this case the State Diamond Trader would not be bound by the run of mine purchasing format, effectively selecting rough diamonds suitable for cutting and polishing in South Africa.”

Tenza reported that progress has been made with regards to the possible purchase of goods from Zimbabwe but these have been held up by a number of logistical issues.

Profitable For Now

During the fiscal year that ended on March 31, 2012 the trader bought just 4 percent of the country’s production, compared with 9 percent in the previous year.

Purchases by value fell 47 percent year on year to $46.9 million (ZAR 410.4 million), while volume declined  65 percent to 293,087 carats.

“As a result of the general price volatility within the diamond industry, the State Diamond Trader had to decline the purchase of a number of productions to ensure maximum trading within such adverse trading conditions,” said Futhi Zikalala, the chief executive of the SDT. “The main reasons for the decline were the prices at which rough diamond were presented and a subsequent lack of demand.”

Sales fell 47 percent to $92.6 million (ZAR 810 million) due to lower available production and an unsustainable rise in prices in the first half of calendar 2011. The trader sold goods to 58 companies during the fiscal year, compared with 60 in the previous period.

Sales to its mandated clients with historically disadvantaged South African (HDSA) backgrounds rose 65 percent to $1.2 million (ZAR 10.6 million), while sales to large and medium sized companies fell 39 percent to $38.9 million (ZAR 340 million). Sales to niche clients - those without HDSA backgrounds that employ fewer than 10 people – increased 44 percent to $9.3 million (ZAR 81 million).

The trader reported that profits fell 45 percent to $1.5 million (ZAR 12.9 million) during the fiscal year. Zikalala noted that profitability was achieved by upholding its operational policies relating to purchasing, production, sales and stock holding, but warned that future performance largely depends on supply.

“In the long term profitability will be ensured through the efficient distribution of those rough diamonds deemed not suitable for local beneficiation,” she said. “The suitability of rough diamond production for beneficiation purposes impacts the sales of the State Diamond Trader.”

Source: diamonds.net

Botswana Diamonds identifies new targets

Diamond exploration firm Botswana Diamonds said it has identified five targets on its new licence in the Orapa region of Botswana.
The licence, which was issued in May, covers an area of 249 sq km and lies 30km to the east of the Letlhakane diamond mine.
 
The company said results of testing in the area were very encouraging, and would enable the company to move forward to its next stage of exploration activity.
Mineral chemistry data from soil samples collected on the licence and a review of aeromagnetic data showed areas with concentrations of diamond indicator minerals including garnets and ilmenites.
“We believe the five target areas we are now focussing on offer very high potential, and look forward to providing a further update on the findings of the ground magnetic and gravity surveys before the end of the year,” chairman John Teeling said.
The company said a geophysics team is conducting ground magnetic and gravity surveys to identify drilling targets, with results expected within six weeks.

Murowa Diamonds output up 64 percent

production at Zvishavane-based Murowa Diamonds, which is majority owned by Rio Tinto International, jumped 64 per­cent to 92 000 carats in the three months to September from a quarter earlier, the interna­tional mining giant said.   The 92 000 carats are diamonds attributa­ble to Rio Tinto’s 77,8 percent stake in the mine. The latest figures hint to a recovery in pro­duction, especially after drop in production to 66 000 carats that was realised in the sec­ond quarter. Statistics from Rio Tinto International’s third quarter 2012 operations review pub­lished last week show that Murowa’s produc­tion in the first nine months of the year rose by 8,5 percent to 215 000 carats from 198 000 carats in the same period a year ago. Also, ore processed in the quarter under review increased 18,3 percent to 142 000 tonnes from 120 000 tonnes a quarter earlier, while ore processed in the nine months to September rose to 388 000 tonnes from 339 000 tonnes recorded in the same period in 2011, representing a 14,5 percent increase. However, diamonds recovered in the third quarter from the mine climbed 63 percent from 73 000 carats in the second quarter to 119 000 carats. In the period from January to September, recoveries grew 9 percent from last year to 277 000 carats. The fate of Murowa Diamonds is not clear. Its parent, Rio Tinto International, which became the world’s second largest miner last week with a market capitalisation of $98,7 billion, hinted earlier in the year that it might be forced to realign its ownership structure particularly for its diamond businesses. “We regularly review our businesses in order to ensure that they remain aligned with Rio Tinto’s strategy of operating large, long-life expandable assets. “The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply. “We have a valuable, high quality dia­monds business, but given its scale we are reviewing whether we can create more value through a different ownership structure,” said the company’s chief executive for Diamonds and Minerals, Harry Kenyon-Slaney, in March this year. Government is also pushing for locals to assume the majority shareholding in mining companies in order to address the historic imbalance where natives were sidelined from mainstream economic activity. The Indigenisation and Economic Empowerment Act, which was signed into law on March 9 2008, stipulates that previ­ously disadvantaged blacks should assume 51 percent equity in foreign businesses. Murowa Diamonds started operations in 2004 after feasibility studies and mine plan­ning conducted between 1998 and 2000. The miner now employs about 180 people.

Diavik Diamond Mines is one of Canada’s top 100 employers

Diavik Diamond Mines Inc., operator of the Diavik open pit mine in Canada's Northwest Territories, has been chosen as one of the country’s Top 100 employers for the second consecutive year.
More than 15,000 companies were invited to apply for this recognition and participants were evaluated across a number of criteria including the physical workplace, employee benefits, employee communications, training and development, performance management and community involvement.
Diavik’s workplace was described by the selection committee as “exceptional” and “one of the most unique work locations in Canada and the world,” said the company in a press release.
According to Diavik Diamond Mines Inc. President and Chief Operating Officer, Niels Kristensen, safety is key to Diavik’s operations and was integral to the assessment of its work place.
“Diavik has accomplished so much in its relatively short history, from significant engineering feats through to accolades for its commitment to sustainable development. None of these would have occurred without the team at Diavik being focussed on the health, safety and welfare of all employees," Kristensen said.
"Being recognized as a top employer for two consecutive years reflects our desire to ensure Diavik remains an employer of choice, both in Canada and in the diamond industry,” he added.
Underground mining began at Diavik in 2010. The plan was to transition the mine and eventually close the open pit.
Toronto-based jeweller Harry Winston Diamond , which has a 40% stake and is looking to become the sole owner of Diavik, has said it expects to begin another open pit in 2016.
On Tuesday the Toronto-based jeweller reduced its 2012 production target for the mine to 7.4 million carats, as the operation shifts its efforts to concentrate on processing higher-valued diamonds.
The company has also said that Diavik will have a total capital cost of $955 million until the end of its life.

Zimbabwe lowers diamond earnings forecast

Zimbabwe has lowered its projected $600 million earnings from diamond sales after miners cut production in response to a decline in diamond prices on the international market, the mines minister said Wednesday.
 
"The $600 million target has now been affected," Obert Mpofu told journalists.
Mpofu said that over the "past three to four months the diamond prices have actually gone down".
"When the prices go down, producers also reduce their production capacity. They cannot produce at a loss."
Mpofu did not give the new target for diamond sales.
In July, Finance Minister Tendai Biti complained about the low revenue trickle from diamond sales saying by mid-year only $46 million had been realised against the year's anticipated $600 million.
That forced him to slash the 2012 budget spending target by 10 percent to $3.6 billion.
He said earnings from key minerals such as gold and diamonds were not making it into state coffers.
Natural resource extraction watchdogs have accused President Robert Mugabe's ruling party of funneling profits from Marange diamonds to senior military officers and party leaders.
Diamond watchdog Kimberley Process has given the country the green light to sell its gems despite opposition from rights groups and Western nations.
Next month, Zimbabwe hosts a conference expected to attract hundreds of traders, diamond experts and non-governmental organisations.
Mpofu said the conference would seek to manage world perception of the Zimbabwean diamond industry and attract foreign investors.

Diamond ETFs Seen Riskier Than Other Commodity Funds

Plans are afoot to create exchange-traded funds specializing in diamonds, but advisers are warning that such investments are fraught with challenges and risks.
Diamonds are more difficult to package and price in fund portfolios than other types of commodities such as gold and silver, portfolio managers point out.

"Unlike gold, diamonds trade in a very fractured private marketplace that is highly opaque and ripe with opportunities for pricing markups," says Greg Peterson, investment research director at Ballentine Partners in Waltham, Mass., which manages $4 billion in assets.
While a diamond ETF hasn't arrived in the U.S. yet, Mr. Peterson is suggesting that investors prepare for a host of new funds. More than likely, he believes that ETF sponsors are trying to capitalize on the success of other popular commodity funds, such as the $76.1 billion SPDR Gold Shares Trust (GLD).
"This is typical of the ETF industry--someone takes an interesting financially engineered product like GLD and then tries to copy it. But not everything fits so neatly into an ETF wrapper," Mr. Peterson says.
Several different fund developers are looking to move into the field, including IndexIQ, known for its ETFs that replicate benchmarks for hedge funds. It has filed for approval from regulators to create an ETF that would buy diamonds and physically store them in a vault for investors.
While global pricing information on diamonds is still difficult to formulate, enough trades are now being done online to make tracking such moves much more practical, says Abraham Stern, chief executive at industry researcher IDEX Online in New York.
"We believe enough information is now available to set an objective statistical base to build transparent pricing structures for an ETF," Mr. Stern says, pointing out that IDEX has been benchmarking such markets since 2004.
Last month, Chicago financial services provider GemShares was granted a patent for its own benchmarking process that could serve as the basis for an ETF. A leading driver behind the effort is Andrew Feldman, a financial adviser inspired by a desire to see diamonds made more accessible to investors.
"The natural users are industry players, just like airlines are for oil and miners are with gold," Mr. Feldman says.
But just building a diamond ETF doesn't guarantee professional traders will come, notes Stephen Hammers, chief investment officer at Compass EMP Funds, a registered investment adviser that runs $1 billion in separate accounts and mutual funds using ETFs. The firm in Brentwood, Tenn., includes commodities strategies as one of its areas of expertise.
Mr. Hammers views efforts to bring out diamond ETFs more along the lines of trading in lumber than gold. "Even though it's traded on exchanges, lumber hasn't attracted enough institutional investors to gain much in the way of liquidity," he says. "Diamonds could easily run into the same issues."
Unless a new ETF takes off in a big way, Mr. Hammers warns that investors might wind up shouldering higher costs related to storage, insurance and other transactional expenses than they're used to paying in more popular parts of the commodities marketplace.
Despite such possible structural flaws, a new diamond ETF is likely to draw at least some initial investor interest, says Andrew Ahrens, an adviser in Lafayette, La.
His advisory firm, which manages about $900 million in assets, has been informally asking affluent investors who own diamonds and favor alternative investments what they think about a diamond ETF.
Almost everyone questioned has found the idea appealing--at least at first, Mr. Ahrens says. As discussions advanced, however, he found that most expressed concern about widely perceived discrepancies in the market related to categorizing and pricing different grades of diamonds.
"Their experiences were so negative, I just don't know how many people will trust an outside manager at this point to create a fairly priced and representative basket of diamonds," Mr. Ahrens says.

World Diamond Congress Opens in Mumbai

The 35th edition of the World Diamond Congress, the bi-annual meeting of the World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA), opened today in Mumbai and will brainstorm ways in which to deal with challenges facing the diamond industry and to ensure sustainable growth.

“This is a proud moment indeed, as the congress, the most prestigious event of the two international bodies, WFDB and IDMA, is being held in India for the first time,” said Anoop Mehta, the president of the Bharat Diamond Bourse (BDB).

Mehta stated that the congress will deliberate on issues including the challenge of ensuring full ‎disclosure and transparency with regards to synthetic diamonds, declining demand, and the ‎need for the promotion and marketing of diamonds, among others.

“The congress will serve as the crucial platform for dialog on burning issues related to the diamond industry such as consistent rough diamond supply and the Kimberley Process,” said Vipul Shah, the chairman of the Gem & Jewellery Export Promotion Council (GJEPC). “We look forward to addressing the issues that plagues the industry today and come up with firm solutions in a bid to counter the downturn affecting the progress of the industry in recent times.”

Participants include  Avi Paz, WFDB’s president,   Gillian Milovanovic, the Kimberley Process chair,  Moti Ganz, the president of the IDMA and Eli Izhakoff, the president of the World Diamond Council, among others.

The congress, which was inaugurated by Prithviraj Chavan, chief minister of Maharashtra, will end on October 17.

Source: diamonds.net

Rockwell Diamonds Revenue -20% in 2Q

Rockwell Diamonds reported that revenue fell 20 percent year on year to $7.6 million (CAD 7.4 ‎million) in the second fiscal quarter that ended August 31, 2012. The junior mining company ‎posted a loss of $4.3 million (CAD 4.2 million) compared with a profit of $2.1 million (CAD 2 ‎million) the previous year.‎

Rockwell’s diamond sales were basically flat at $7.1 million (CAD 7 million) during the quarter, ‎while its beneficiation revenue slumped 81 percent to $0.5 million (CAD 439,584). Rockwell has ‎a joint venture beneficiation partnership with Steinmetz Diamond Group.  ‎

The company explained that its focus during the quarter was to drive efficient mining at its ‎Saxendrift and Klipdam operations while most of the loss incurred was attributed to the ‎Tirisano mine, which was temporarily closed in mid-July to implement a new right size plan.  ‎The company is currently constructing a fourth mine, Saxendrift Hill, which is scheduled to ‎commence production by March 2013. ‎

Group production rose 14 percent to 4,218 carats during the quarter.‎

During the first six months of the fiscal year, Rockwell’s revenue fell 18 percent to $14.8 million ‎‎(CAD 14.5 million), while its loss expanded to $12.8 million (CAD 12.5 million), from $0.3 million ‎‎(CAD 306,588) the previous year. ‎
Source:diamonds.net

SA Miner Unrest Spreading to Diamonds

The unrest in South Africa’s mining sector is spreading to diamonds. Petra Diamonds reported on Tuesday that a “limited number” of workers at its Kimberley Underground mine had gone on strike. The company said, however, that production had not been affected that it is in talks with the National Union of Mineworkers (NUM). Media reports have warned that South Africa faces a “mining meltdown” as the miner unrest over working conditions and pay, which began with the platinum sector, has spread to the gold, diamond, coal and iron ore sectors as well. The initial flare up at the Lonmin platinum mine at Nkaneng had led to the deaths of nine people including two police officers on August 13 and subsequently the deaths of at least 34 at Marikana on August 16 when police opened fire on protesters. The unrest appears to have been aggravated by the rivalry between the dominance of the government-recognized NUM with a new union, the Association of Mineworkers and Construction Union (AMCU). Compounding the issue is the bitter rivalry between Julius Malema, the former leader of the African National Congress (ANC) youth wing and the country’s President, Jacob Zuma. Malema has publicly issued an anti-mining message, calling for all mines to be made unmanageable.   Source: idexonline

The Coming Supply Crunch in Diamonds

Alrosa, the world’s second largest diamond miner,  plucked out a stone weighing 158.2 carats from its Nyurbinsk mine in Russia’s north-eastern republic of Sakha (Yakutia). That is a quite remarkable size; at auction that is worth about $1.5m, and by the time it has been cut and polished it will be worth a great deal more.

In fact, Alrosa produces 97% of all diamonds in Russia and accounts for about 28% of global production. It is a name you could soon be hearing a lot more of as it is rumoured to be preparing a stock market flotation.
That would cast the spotlight on the diamond mining industry. There is an air of optimism about the future of this sought after precious stone, as I discovered when I met Robert Bouquet, a director of diamond mining junior Botswana Diamonds .

Only 1% of Sites Turn Out Commercially Viable Diamonds

Botswana Diamonds has projects in Botswana, Cameroon and, potentially, Zimbabwe, a political hotbed but a country that hosts the extraordinarily rich Marange diamond mine. Bouquet was excited about the potential for the company, especially in Cameroon. But it was his insight into the industry that interested me.
The price of rough diamonds has shot up in recent years and quickly recovered from the financing crisis of 2009. Although, there was some easing of the diamond price this [northern] summer, sentiment is still bullish, and it is not hard to see why.
Diamonds are exceptionally difficult to find. Although there are some alluvial sources, washed downstream by ancient rivers, 95% of diamonds have erupted from deep in the earth’s crust and are found in vertical pipes known as kimberlites or, occasionally, lamproites.
The location of these kimberlites is known, but they do not necessarily yield diamond mines. Only about 1% of kimberlites discovered to date have proved to be commercially viable, so with this low success rate and a finite number of kimberlites left to explore, there is no chance of a sudden increase in supply.

A Supply Crunch is on the Way for Diamonds

Global production of diamonds amounted to 124 million carats in 2011, and according to a report by Bain, 13 new mines will add 23 million carats by 2012. Balancing this against the depletion of existing mines, aggregate diamond production is forecast to increase by 2.8% a year to 2020. But that figure is not sufficient to match forecast demand.
Although the USA remains the largest market for diamonds, the rapid growth of the Chinese and Indian middle classes is expected to have the biggest impact on the equation.
In these two countries the number of households with a disposable income of $15,000 is expected to rise to about 469 million in 2020 from about 220 million today.
That seems certain to boost demand for diamonds, and since consumers have a tendency to equate price with worth, rising prices could lead them to value diamonds even more highly than they do today.

The Trouble with Diamonds

And yet the diamond market is a strange one. Thanks to the efforts of De Beers, which cornered the market at the beginning of the 20th century, and came up with ‘diamonds are a girl’s best friend’, brides and grooms all over the world are now convinced that their devotion should be measured by this particular precious stone.
De Beers has now lost its stranglehold on the industry, and without a sustained and consistent marketing campaign, future brides and grooms could decide that emeralds, for instance, are no lesser tokens of love.
Also having an effect on the supply of diamonds is the Kimberley Process which, in theory anyway, prevents the sale of ‘conflict diamonds’ from financing brutal regimes. The other shadow hanging over the industry is synthetic diamonds.
It is possible to make diamonds in a laboratory and, given that these can only be identified by experts using advanced inspection tools, you can be certain that they would hoodwink the average consumer.
While the trade has managed to convince itself that consumers would not be satisfied with artificial diamonds, industrial users have no such qualms, and 95% of industrial diamonds are synthetic.
Finally, the attraction of diamonds is that, like gold, they last for ever. That means that every diamond that has ever been produced is still in existence. To the extent to which owners choose to pluck their grandmother’s diamond jewellery from the bottom drawer and flog it, supply will be affected.
The bullish case for diamonds is not all it might seem. But even with these reservations, the industry looks well placed.

Rapaport Auctions Reports Record September Sales

Rapaport Auctions, the largest auction market for recycled diamonds, reported strong activity for the third quarter of 2012 with sales of 82,260 carats for $14.3 million. Melee prices stabilized, increasing 3 percent after a decline of 13 percent in the second quarter. Single stone sales were better than expected with steady demand from Israeli dealers.






“There has been a noticeable uptick in prices and trading volume for small melee diamonds following a slow summer season. The recent strengthening of the Rupee and expectations for a reasonably good U.S. holiday season improved demand and stabilized prices for a broad range of commercial and promotional quality diamonds at popular price points.” said Ezriel Rapaport, the director of Rapaport Global Trading.
Upcoming Rapaport Auctions:

October 15 - 24, New York & Belgium (Melee)
October 17 - 24, New York & Israel (Single Stone)
November 14 - 21, New York & Israel (Single Stone)



Source: diamonds.net

Firestone Diamonds improves diamond recovery at Liqhobong

 
The amount of whiter stones recovered is encouraging, Firestone said

Firestone Diamonds  today said it has made good progress in improving the quality and value of diamonds recovered from the Liqhobong mine, in Lesotho.
This comes after changes were made to reduce diamond breakages at the pilot plant.
It reported that several larger stones have since been recovered successfully in the past quarter, and further improvements are now expected in the short term. Higher grade rock from Liqhobong’s K5 area will now be processed, it explained.
"We are happy with the progress that we have made at the Pilot Plant in September which has continued into October, after overcoming technical and weather challenges in July and August,” said chief executive Tim Wilkes.
Firestone said that it successfully recovered three yellow stones weighing 27, 17 and 15 carats and three white stones weighing 12.4, 9.2, and 9.1 carats.
Wilkes explained that the amount of whiter stones recovered is encouraging.
“(This) should continue on an upward trend as the mine plan calls for more of the higher grade, larger stone bearing areas of the pit to be mined during the remainder of the year.”
Today’s statement comes ahead of two potential catalysts for Firestone.
It told investors that the next diamond tender will take place this month, in Gaborone and Antwerp.
Meanwhile the definitive feasibility study for Liqhobong’s main treatment plant is also expected this month.

Why Are Indians Suddenly Buying Diamonds?

Indians have long been the world’s biggest buyers of gold — so much so that changes in their consumption tip the scales of global demand. Recently, those scales have tipped down.

This year, China surpassed India in overall gold demand, according to the World Gold Council, largely because by the end of the second quarter, gold jewelry demand in India had dropped 30 percent year-over-year.

Why? Because wealthy Indians have discovered diamonds.

“India has become the fastest-growing market for de Beers. It’s now a priority market for us,” said Forevermark CEO Stephen Lussier. Forevermark is a subsidiary of the De Beers Group, the largest supplier of diamonds in the world.

“It’s also the most extravagant market in terms of its diamond designs. Women wear such extraordinary pieces. You wouldn’t see that in Europe unless you were having dinner with the Queen,” he added.India’s ‘diamond discovery,’ isn’t just about the bling. It is being driven by price moves and currency devaluation. Persistently high gold prices over the past year have been coupled with a depreciation of the rupee against the dollar. In fact, the rupee

has lost 25 percent of its value against the dollar over the same period. This exacerbated the price of gold for Indians, because gold is priced in dollars.

At the same time, diamonds became cheaper. By the end of the second quarter of this year, the average asking price for 1-carat diamonds dropped about 18 percent year-over-year, according to the Rapaport Diamond Trade Index. In dollar terms, diamond dealers can now purchase a 1-carat diamond for about $8,384, down from $9,175 last year, according to Rapaport’s index.

Yet varying cuts and qualities make the value of all diamonds difficult to assess. Diamond exchanges do not have official rates, and unlike gold, are not quoted on a daily basis.

In this case, then, transactions speak louder than quotes.

Marketers Shine to Indian Brides

Gold bullion’s price moves aren’t the only factor in India’s new affinity for diamonds. In the past few years, diamond marketing campaigns have targeted India’s wedding market—which has opened its bejeweled arms. (More: A Gluttonous Food Industry That Lacks Investors)

“Before De Beers started marketing in India, the market was entirely gold focused. Now De Beers spends $4 to $5 million per year on consumer marketing in India,” said Forevermark CEO Lussier. Over the last five years, Lussier adds that DeBeers’ marketing investment has been rewarded with over 20 to 30 percent sales growth “year in and year out.”

Worldwide retailers are gunning to gain share before the diamond jewelry market becomes as crowded as Indian cities themselves. Their main competitor is Indian diamond jeweler Tanishq, already known to dominate the largest cities, Mumbai and Delhi. Indians say Tanishq's popularity is due to its modern designs, coveted by India’s younger generation.

“When I look at my mom’s wedding jewelry, is it mostly gold. Indian wedding jewelry has become much more modern, and more diamonds are used,” said Indian newlywed, Saniya Ghandi Bhardwaj.

In affluent families, the mother and father of the bride give custom-made jewelry sets as a ceremonial gift to their daughter. The importance of this gift, Bhardwaj explained, is essentially based in traditional Hindu theology, which holds that the bride is being sent to the groom’s family. Depending on the family wealth, traditional gifts can consist of gold only, but the trend among the affluent has turned to diamonds.

“On Sangeet night [a traditionally lavish celebration on the eve of an Indian wedding], 1,200 guests attended and throughout the night, I wore the diamond sets my parents gave me,” she added.

While wealthy Indian families embrace the diamonds trend, some investors are getting nervous, wondering whether gold demand will continue to drop.

Diamond firms divert cash into realty

SURAT: Income tax department is learnt to have collected documentary evidence about diversion of crores of rupees by owners of diamond companies in the world's biggest diamond cutting and polishing centre in the city to realty sector. This was unearthed during I-T's search and seizure operation on a brokerage firm dealing in realty business on Friday.

I-T's investigation wing had swung into action following a report published in TOI dated September 7, 2012, highlighting the diversion of at least Rs 30,000 crore of working capital loans borrowed by the diamond companies from foreign, private and national banks into realty estate sector in Surat, Ahmedabad, Bharuch, Mumbai etc.
Sources said that range III of I-T department had conducted a search and seizure operation at the offices of a brokerage firm dealing in realty at two spots in the city namely Annapurna Market on Ring Road and Rahul Raj Mall in Piplod.
The I-T sleuths had seized computers, documents and bank details of the brokerage firm. The department found that many diamond company owners had diverted huge amount of money into luxurious real estate projects coming up across the city, mainly in areas like Vesu, Pal, Piplod, City Light etc.
Official sources said I-T department has issued summons to about 15 leading real estate developers associated with the brokerage firm.
"The documents pertaining to dealings by diamond companies into the real estate through the brokerage firms are being scrutinized. In the preliminary investigation, it is believed that crores of rupees have been diverted into city's real estate," a senior I-T officer said.
As per industry estimates, several diamantaires have diverted at least Rs 30,000 crore worth of working capital loans borrowed from the foreign, private and national banks in the real estate and speculative buying of rough diamonds since 2010. Now, with the downturn in the real estate too and falling rough prices, big players are finding their investments stuck up.
A major chunk of these loans were borrowed through round-tripping through which a small tribe of diamond traders got cheap finance against export of same set of diamonds over and over again.
They used the finance obtained from several high-street lenders to dress up past losses on their books, carry out speculative deals in rough diamonds and diverting substantial part in the real estate sector.
These loans were mostly borrowed for export finance at London Interbank Offered Rate (Libor) from the banks and that it works out 5.5-6 per cent cheaper than minimum rupee loans extended by banks to corporates.

IDI Reelects Ganz as Chairman

The board of directors for the Israel Diamond Institute Group of Companies (IDI) reelected Moti Ganz as its chairman. Ganz also serves as president of the International Diamond Manufacturers Association (IDMA) and is honorary president of the Israel Diamond Manufacturers Association (IsDMA). Ganz said that his main goal for this new term would be to create a comprehensive 10-year strategic plan for IDI, in order to position the Israeli diamond industry as a global leader in rough and polished diamonds.
Ganz said, ''I am grateful to the board of directors for this vote of confidence, and promise to continue to act for the advancement of the Israeli diamond industry.''
During his previous terms as chairman of IDI, Ganz has promoted the industry’s marketing efforts into China and India, opened a representative office in Hong Kong and expanded IDI's trade show presence in India, Thailand and China. Subsequently, the number of Israeli exhibitors in key trade shows has grown exponentially, according to IDI.
Additionally, Ganz has worked with the banks and the government to ensure favorable terms for the local industry. He promoted cooperation among all industry parties and lobbied for open dialogue with the major rough producers to ensure a constant rough supply to Israel.
Ganz owns the MotiGanz Diamond Group, a manufacturer with operations in Israel, China, India and Botswana. Ganz began his career in the Israeli diamond industry in 1982 and in 1989 he received the country's ''Outstanding Exporter Award,'' and in 1991 his firm became a Diamond Trading Company (DTC) sightholder.

Source: diamonds.net

Archduke Joseph diamond to fetch at least $15 million at auction

The Archduke Joseph, is up for sale in Geneva with an expected price tag well in excess of $US15 million ($A14.68 million), Christie's auction house says.
"It's a 76.02 carat cushion-shaped D-colour diamond (considered to be the most flawless), from the famous Golconda mines in India," Christie's senior international specialist Jean-Marc Lunel said.
The colourless gem, which is about the size of a domino and 1.5 centimetres thick, is to be exhibited from October 13 in New York, Hong Kong and Genevafore the auction in Switzerland on November 13.
Described as the "star lot of the fall jewellery auction season" by Christie's, the diamond has the same provenance as other illustrious jewels including the Koh-i-noor - part of the crown jewels held in the Tower of London - and the Regent, believed by many to be the finest diamond in the French crown jewels and now in the Louvre museum in Paris.

All three jewels come from the now closed Golconda mines, which produced the purest gems, Mr Lunel said.
Next month's auction will be the second time Christie's has sold the Archduke Joseph after it fetched $US6.5 million ($6.3 million) at a Geneva sale in 1993.
The jewel, which belonged to Archduke Joseph of Austria (1872-1962), was put in a vault of the Hungarian General Credit Bank in 1933 by his son, the Archduke Joseph Francis.
The diamond was sold three years later to an anonymous buyer who left it in a safe during World War II, escaping the attention of the Nazis.
It finally resurfaced in 1961 at auction in London and was offered for sale in November 1993 at Christie's Geneva.
Since then the diamond has changed hands privately, but Christie's declined to comment on the identity of the current owner.
The auction house holds eight major jewellery sales a year, including two in Geneva.
"The first half of 2012 saw record sales, thanks mainly to the May auction in Geneva," said Mr Lunel, "when part of the jewellery collection of billionairess Lily Safra was sold for good causes."

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Diamond Council of America Announces Individual Membership Category

The Diamond Council of America (DCA) is excited to announce the creation by the board of directors of a new member category to be known as DCA Individual Member.

“DCA’s board recognizes the diamond industry is evolving and that a thriving industry demands an educated market,” says Terry Chandler, president of the DCA. “DCA has created the new member category in response to numerous inquiries from consumers and industry professionals over the past several years for access to DCA’s accredited courses.” The Diamond Council of America’s accredited courses have, up to now, only been available to employees of DCA executive or associate member companies. The new member category opens DCA’s program to a broad audience with a variety of interests.

Chandler added, “We take the responsibility of diamond education very seriously and have created this new member category to provide an unparalleled opportunity, for all who seek it, to join DCA and enroll in our DETC (Distance Education and Training Council) accredited courses.” Dues for DCA individual members are $35 annually. DCA individual membership applications are available online at  www.diamondcouncil.org.

The new DCA Diamond Studies Course has been developed specifically for this new member category, which potentially includes anyone interested in diamonds and diamond jewelry - from students, hobbyists, and consumers to those considering the fine jewelry industry as a career. The new course covers the 4Cs, diamond jewelry and its care, plus treated, lab-created, and simulated diamonds. Background on diamond myth and lore, and how diamonds are formed, found, mined, and cut round out this comprehensive training.

“The course’s online format enables diamond buyers, artisans, collectors and hobbyists to access it at their convenience and move through the material at their own pace. The lessons have distinct components that are designed to create a complete and personalized learning experience,” says Lissa Roussel, Director of Operations. Progress is tested and coursework graded, culminating in a final examination and acknowledgement of achievement by DCA. Tuition for the Diamond Studies Course is $165.00. The Diamond Studies Course is now available at www.diamondcouncil.org.

The Diamond Council of America (DCA) was founded in 1944 to educate jewelry sales professionals about diamonds and gems and is accredited by the Accrediting Commission of the Distance Education and Training Council (DETC). Operating as a not-for-profit organization, DCA provides professional jewelers an opportunity to earn certifications in diamonds and colored gemstones through distance education, and gives salespeople the knowledge and training necessary to make them successful. DCA represents more than 5,200 jewelry stores and leading suppliers of diamonds and gems across the country.

Source: diamonds.net

Scio Diamonds Record Production Allows Shipments to Increase

Scio Diamond Technology Corporation  announced today that its first sixteen weeks of production has exceeded 3300 carats of useable diamond.  The last 5 weeks have yielded over 1400 carats of useable diamond.  As laser fabrication capacity continues to increase, shipments are now reaching thousands of diamond parts per month.

"On a month over month basis we have increased our production 29% in September as we remain on track in the progressive implementation of our growing technologies.  Our focus remains customer centric, with shipments increasing daily." states Joseph Lancia, Scio's President and CEO.  "All the product in he world doesn't mean anything until someone buys it, and you ship your product to them.  That part of our plan is coming to fruition now."
Mike McMahon, Scio's COO, says, "Our current production run rate equals 14,500 carats per year.  Literally in June, we were at 4,300 carats per year.  We have increased reactor up time, decreased reactor turnaround, increased our growth rate of useable diamond and most importantly increased our growth per crystal".
"The result of all this production effort, is more high quality product to our customers," says Lancia.  "The demand for industrial diamond is unbelievably high with requests coming in every day.  We must be very cautious that we do not over promise our deliveries. "
"We have successfully set up partnerships with international vendors for diamond fabrication and have installed our first diamond sawing laser," says McMahon.  "We must remain focused on completing the installation of our next five lasers in the upcoming quarter to keep up with our ever increasing production capability."