Thursday, December 5, 2013

IDE launches awareness campaign on synthetic diamonds,

Bourse to expel members proven guilty of selling undisclosed synthetics
Ramat Gan, Israel - December 5, 2013: Shmuel Schnitzer, president of the Israel Diamond Exchange (IDE), announced his exchange has begun an awareness campaign to ensure that the 3,500 members of the world's largest diamond bourse are fully informed of the far-reaching implications of trading -- knowingly or unknowingly -- in synthetic diamonds.

"Our industry is built on transparency, integrity and accountability," he said. "Therefore, those few unscrupulous foreign dealers who have been mixing synthetic diamonds into parcels of naturals and sold them as natural diamonds are causing tremendous damage to the reputation of our entire industry! The IDE board and I will do all we can to protect our members from falling victim to these unethical practices, but at the same time will not hesitate to expel those members who have been proven guilty of not disclosing synthetic diamonds that they have sold," Schnitzer stated.

IDE board member Yoram Dvash, who heads the IDE Industry Committee, said that while undisclosed synthetic diamonds had not yet been encountered in the Israeli trade, the issue is of major concern. "As one of the world's leading diamond manufacturing and trading hubs, polished diamonds from all manufacturing diamond centers are traded here. Therefore, we are very much exposed to these challenges and our members must know what they're up against," Dvash said.

Dvash noted that IDE's awareness campaign, coordinated by the IDE Industry Committee, will start on December 8, with a first lecture on synthetic diamonds by industry analyst Chaim Even Zohar, who will discuss the economic, ethical and legal aspects of trading in synthetic diamonds. "This is the first step," Schnitzer said. "We will follow up with hands-on and more technical information sessions soon."

Shmuel Schnitzer.

Wednesday, December 4, 2013

Martin Rapaport Addresses Synthetic Diamonds

Martin Rapaport, the chairman of the Rapaport Group,  has just released an editorial relating to synthetic diamonds. The editorial entitled “Sinthetics” defines measures that the diamond industry must take to ensure the integrity of diamonds and the diamond trade.

Rapaport defines the 4-D’s: Differentiation, Detection, Disclosure, and Documentation, and calls upon the trade to sample test diamonds before delivery to retailers. He says, while documentation on invoices stating that diamonds are natural is important, it is not sufficient. Trust without verification is unacceptable and dangerous. Rapaport calls on the diamond mining sector to increase consumer education about natural diamonds so that they may be properly differentiated from synthetics.

“The integrity and ethics of the diamond trade is being tested by firms that sell synthetic diamonds as natural. Retailers must investigate their sources, confirm the authenticity of their diamonds and take full responsibility for what they buy and sell. Natural diamonds can and should be authenticated and differentiated. As long as the trade is honest, demand and prices for natural diamonds will not diminish due to synthetics. Real diamond demand is not about cheap synthetic prices, it’s about the authenticity of the diamond and the relationship between people. Women want the real thing,” said  Rapaport.

“Sinthetics” by Martin Rapaport is published in the December issue of the Rapaport Magazine.

Tuesday, December 3, 2013

De Beers introduces forward contracts of rough diamonds

With the slowing global economy posing a threat to diamond sales, the world’s largest rough-diamond miner De Beers has introduced forward contract sales, allowing customers to book the required quantities and types of the stone for a future month. Indian jewellers, however, fear the new system will lead to an artificial rise in the prices of rough diamonds.

The contracts will complement De Beers’ spot auction events. “The purchase price for the required volume of rough diamonds in a forward contract will be determined by a customer’s bid relative to the spot price for the same type of goods at the spot auction event, when the contract matures,” De Beers said.

The first forward contract was issued in London on Tuesday. Registered customers of De Beers Auction Sales were able to bid for supply up to three months in advance. It is anticipated the contracts to bid for supplies through 12 months will be introduced next year.

“Customers have expressed a desire to secure future supply at auctions so they can plan their activities more effectively and commit to longer-term agreements with their own customers. We see the contracts as the ideal mechanism to deliver this and believe these will be a valuable addition to our customer offering,” said Neil Ventura, senior vice-president, De Beers Auction Sales.

About 10 per cent of De Beers' rough diamonds are sold through its auction platform. “We understand auction forms a small part of the DTC sales window that they use to service SME (small and medium enterprises) clients. The positive effect of this move will be small manufacturers will get an assured supply for a longer period, which will bring stability to their business,” said Vipul Shah, chairman of the Gems & Jewellery Export Promotion Council. “But at the same time, we would like to urge both buyers and seller to use this system prudently so that it doesn’t lead to speculation and overpricing of roughs, which will harm the industry.”

For the first half of this year, De Beers posted a 6.29 per cent rise in rough diamond production. The company's overall rough diamond output rose to 14.295 million carats during this period, compared with 13.449 million carats in the year-ago period.

Sales remained steady during the first half of the current calendar year, with total sales of $3.3 billion  and rough diamond sales of $3 billion.

Monday, December 2, 2013

Central African Republic calls for diamond ban to be lifted

Central African Republic has called for a ban on its diamond exports to be lifted, saying it needs the tax revenue from sales to revive its crisis-crippled economy.
The Kimberley Process, a global watchdog set up to stop the trade in "blood diamonds", announced a suspension of certified diamond trading with the country in May, two months after a coalition of mainly Muslim Seleka rebels ousted President Francois Bozize.
"Diamonds have nothing to do with the situation in Central African Republic," said Herbert Goyan Djono-Ahaba, mines minister in a transitional government meant to lead the country to fresh elections.
"Our country was suspended based on risks but there was no proof that diamonds financed the war," he said in an interview on Thursday.
Diamonds are an important source of revenue for the government in Bangui and the ban makes interim president Michel Djotodia’s task of staging polls even more daunting.
About 10% of Central African Republic’s population of 4.5-million has fled the increasingly sectarian violence.
World powers are scrambling to quell the trouble, fearing tit-for-tat killings could escalate into war between the Christian majority and Muslims, who represent about 15% of the population.
Mr Djono-Ahaba said the country had fulfilled the requirements to be reinstated but claimed Kimberley Process experts had declined to visit to verify the government’s efforts.
But Partnership Africa Canada (PAC), a civil society member of the Kimberly Process, said the government was far from having the ban lifted.
PAC research director Alan Martin said the verification mission was unable to go to the country because the government could not guarantee its safety.
"Instability exists in both eastern and western diamond mining areas. It is also evident that the government is not in control of the diamond fields," Mr Martin said.
France is preparing to boost its military presence to about 1,000 soldiers to be followed by the deployment of a 3,600-strong African Union peacekeeping force. The United Nations is also examining the possibility of establishing a peacekeeping mission.
"Blood diamonds", stones used to fund insurgencies, became a global issue in the 1990s during a succession of African conflicts in which their trade financed arms purchases and resulted in human rights abuses.
A public outcry led to the establishment in 2002 of the Kimberley Process, a government, industry and civil society scheme aimed at certifying stones and preventing conflict diamonds from entering the international market.

Sunday, December 1, 2013

Global Diamond Players Flock to Zimbabwe

International diamond players, including Botswana registered company First Element Diamond Services (First Element), are flocking to Zimbabwe for opportunities to exploit the country's vast diamond deposits, businessdigest has learnt.

This comes after a Belgian diamond delegation toured the country recently. Zimbabwean officials in turn also toured Antwerp, the diamond capital of the world.
Highly-placed sources said this week First Element, which runs dual tenders in Gaborone (Botswana) and Antwerp (Belgium), was among a visiting group of foreign investors touring the country's diamond deposits.
The company is expected to clinch a deal with the Zimbabwean government that is likely to see the company getting vast diamond claims in the country.
"These Belgians were here and have had two meetings with senior ministry officials about their intentions," said a source who requested anonymity.
Insiders see the move as Zimbabwe's way of paying back Belgium for its critical stance against European sanctions on the Marange diamonds.
First Element is an independent Botswana-registered company which provides diamond cleaning, valuation, sorting and marketing services.
The company has expertise in valuating and tendering run of mine production and has offices in Gaborone, Johannesburg and Antwerp.
First Element last year partnered London Stock Exchange mining junior-quoted diamond mining and exploration company Firestone Diamonds to open a new tender facility at the Antwerp World Diamond Centre.
Zimbabwe's interest in First Element is believed to be driven by the desire to start marketing its diamonds locally after Diamond Trading Company (DTC), a subsidiary of De Beers, relocated its London-based sorting and sales activities to Botswana in November 2013.
In an interview, Mines and Mining Development deputy minister Fred Moyo said a number of investors were keen on Zimbabwe's extractive industry, particularly diamonds, but could not shed light on the specific negotiations with First Element.
"A lot of companies come but I think the permanent secretary is best placed to give details on specific companies because he is the one who deals with that especially at the early stages," Moyo said.

"What I can tell you is that as a ministry we welcome all investors who want to come and invest in our economy, not only in diamonds but in all minerals."
Moyo said government was currently seeking investors willing to make serious commitments towards exploiting the country's Kimberlite diamond deposits.
"We want to balance the two where the alluvial diamonds are being exploited and at the same time we get Kimberlite," he said.
Local donor funder research group Centre for Natural Resource Governance (CNRG) this month reported Russian diamond mining giant, Alrosa, is also believed to be prospecting in Zimbabwe after the discovery of new diamond deposits outside Marange.
CNRG said diamonds have been recently discovered in Bikita and Chimanimani.
The research unit said four kimberlitic pipes rich in diamonds were discovered in Budzi communal lands in Masvingo province's Bikita district near the border with Manicaland Province in March 2013.
Bikita sealed off
In February this year, former Mines minister Obert Mpofu said government had sealed off newly discovered Kimberlite diamond deposits in Bikita to stop illegal mining of the precious stones.
He said some villagers reported that there were diamonds in the Devure Range and the Chinese had already done some prospecting.

Thursday, November 28, 2013

Rockwell Diamonds unearths a heavyweight precious gem

Rockwell Diamonds on Wednesday announced that it had unearthed a 287 ct diamond, described as being of a tinted white commercial colour and makeable in shape, from its Middle Orange river  operation in South Africa.
It was the fifth large stone from the resource in three months, which Rockwell said served to reinforce management's decision to focus operations in the MOR region.
The diamond would be sold into the beneficiation joint venture with Steinmetz Diamonds at market value with Rockwell participating equally in the value uplift once it had been polished and sold.
Rockwell CEO and president James Campbell said that it was the second diamond exceeding 200 ct produced by Rockwell in its eight-year history and was one of the largest stones produced in the MOR region in recent times.
The stone was recovered from the Saxendrift Extension property, acquired in March 2012, and followed the recovery of four 100-ct-plus diamonds in September.
“These results show that our plants are correctly geared for the recovery of large diamonds that characterise the MOR region. This is also a strong validation of our strategy to grow our alluvial production volumes to 500 000 m3/m in order to produce large stones more regularly and improve Rockwell's quarterly earnings performance,” he said.
Campbell also noted that at the company’s Saxendrift Hill complex the bulk X-ray operation was performing well with solid results, and at Niewejaarskraal, ramp-up operations were ongoing, with the implementation of an in-field screen.
“We are on track to commission a bulk X-ray system early in 2014, which was procured on a rental basis,” he said.

Wednesday, November 27, 2013

Rockwell continues production of large diamonds in Middle Orange with recovery of 287-carat stone

Rockwell Diamonds Inc. announces the recovery of a 287-carat diamond from its operations in the Middle Orange River region which is of commercial colour and makeable in shape. As the fifth large stone from this resource in three months, this recovery further reinforces management's decision to focus operations in Middle Orange region.

The diamond will be sold into the beneficiation joint venture with Steinmetz Diamonds at market value with Rockwell participating equally in the value uplift once it has been polished and sold.
Commenting on the recovery of this large stone James Campbell, CEO and President said:
"This 287-carat diamond is only the second rough diamond exceeding 200 carats produced by Rockwell in its eight year history and is one of the largest stones produced in the Middle Orange in recent times. The stone was recovered from the Saxendrift Extension property acquired in March 2012 and follows the recovery of four plus 100-carat diamonds in September 2013. These results show that our plants are correctly geared for the recovery of large diamonds that characterize the Middle Orange River region. This is also a strong validation of our strategy to grow our alluvial production volumes to 500,000m3 per month in order to produce large stones more regularly and improve Rockwell's quarterly earnings performance."

Tuesday, November 26, 2013

Tiffany & Co.'s 3Q Sales +7%, Profit Jumps as Costs Ease

Tiffany & Co. reported that revenue increased 6.9 percent year on year to $911.5 million for the third quarter that ended on October 31. Same-store sales rose 7 percent. Cost of sales rose 0.9 percent to $392 million and profit surged 49.7 percent to $94.6 million. Inventory increased 8.3 percent year on year to $2.42 billion.
By region, sales improved 4 percent year on year to $417 million in the Americas, with comparable-store sales up 1 percent, while revenue surged 27 percent to $238 million across the Asia-Pacific region and same-store sales jumped 22 percent. Tiffany’s business in Japan was affected by a negative translation effect from a substantially weaker yen, so revenue fell 13 percent to $128 million; however, comparable-store sales rose 5 percent.  costs, margin
In Europe, Tiffany & Co.'s revenue increased 7 percent $104 million and same-store sales rose 2 percent, primarily led by growth in the U.K.
Gross margin  increased 2.6 points to 57 percent from 54.4 percent one year ago largely the result of reduced product cost pressure, as well as price increases that Tiffany & Co. implemented in early 2013. The jeweler also observed a shift in the sales mix toward higher-priced, lower gross margin products has continued to offset a portion of these benefits.
Tiffany & Co.'s guidance for the fourth quarter suggested mid-single digit sales improvement in U.S. currency, with earnings increasing by 10 percent to 20 percent.
Michael J. Kowalski, the CEO of Tiffany & Co., said,  “We are very pleased with our overall results. Worldwide sales growth in the quarter demonstrated the growing power of the Tiffany & Co. brand and the benefits of our expanding global presence. Operating earnings rose faster than sales, reflecting favorable product cost trends and ongoing well-controlled expenses. We’re experiencing excellent customer response to our expanded fashion jewelry designs, highlighted by the ATLAS collection, as well as continued growth in our fine and statement jewelry, with particular strength in our yellow diamond collection.”


Monday, November 25, 2013

Belgium raises issue of 2 percent duty on diamond imports by India

Belgium today raised the issue of imposition of 2 per cent duty on imports of polished and cut diamonds by India during a meeting with Commerce Minister Anand Sharma.

Diamonds account for a large part of trade between India and Belgium.

The diamond duty issue was discussed at the meeting of Sharma with Princess Astrid of Belgium and its Deputy Prime Minister Didier Reynders here.

According to an official, Sharma conveyed to the visiting side that the measure was necessitated due to economic reasons and the tax is applicable for imports from all the countries - not targeted specifically at diamond imports from Belgium.

"The Belgian side discussed the consequences of the recent special import tax of 2 per cent re-instituted by India on exports of polished and cut diamonds," the official said.

Of the world's polished diamond market, India's share is 60 per cent in terms of value, 85 per cent in terms of volume and 92 per cent in terms of pieces.

Eleven out of every 12 cut and polished diamond set in jewellery worldwide are processed in India. The cutting and polishing of diamond employs a million people in the country.

Antwerp in Belgium on the other hand is the key destination for rough diamonds.

More than 80 per cent of the world's rough diamond volume is traded through Antwerp. About 40 per cent of the world's natural industrial diamonds pass through the city.

Sharma also conveyed satisfaction over the signing of MoU between the two sides for exchange of information/data sharing on Kimberley Process.

KP is a joint initiative by governments, industry and the civil society to stem the flow of conflict diamonds - rough diamonds used by rebel movements to finance wars against legitimate governments.

Sunday, November 24, 2013

Zim has been raking in millions in diamond royalties

Substantial revenue from Zimbabwe’s Marange diamond fields have evidently been going into state coffers, despite claims to the contrary by former Movement for Democratic Change finance minister Tendai Biti.
IOL  Tendai Biti

This is according to classified documents from the Kimberley Process Certification Scheme (KPCS or just KP) which was set up to filter conflict diamonds (also known as blood diamonds) out of world markets. They show that the four mines at Marange exported over $717 million worth of diamonds between November 2011 and October last year and paid 15 percent of that – just over $107m – in royalties into state coffers.
The KP research was part of the process of clearing Zimbabwe after its suspension from the KP due to reports that its forces had violently evicted informal miners from Marange.
The KP Monitoring Team comprised Abbey Chikane (brother of former director-general in president Thabo Mbeki’s presidency, Frank Chikane) and Mark van Bockstael, chairman of the Working Group of Diamond Experts at the World Diamond Council in Antwerp,
The documents are not public but they are on the KP’s restricted website which is available to any of the many government, industry or civil society members of the KP. This has raised some questions about why they have not been cited before to counter the claims made by Biti.
He frequently said he never saw any Marange revenues while he was finance minister in Zimbabwe’s coalition government from 2009 until this year’s elections, which Zanu-PF won.
The MDC and many observers have often suggested that all income from Marange due to the state went directly into Zanu-PF’s coffers. In their report for the quarter February to April last year, the authors say statements by ministers about the lack of transparency in the “chain of custody” of Marange diamond production and export, “have caused serious confusion regarding compliance to KP standards and minimum requirements.”
They refer to contradictory statements by Zimbabwe’s ministry of mines – then controlled by Zanu-PF – and the finance ministry and agencies then controlled by Biti’s MDC.
Chikane and Van Bockstael found that both the Reserve Bank of Zimbabwe and the Zimbabwe Revenue Authority (Zimra), which is part of the treasury, were both directly involved in authorising diamond exports so they could be KP certified.
Zimra was involved in several steps of the process, including receiving copies of customs forms which showed that the amount paid to the producer, as noted on the KP certificate, had been received in the producer’s bank account in Zimbabwe.
Zimra also had to give clearance for the shipment of the rough diamonds near the end of the process by issuing “Release Form 21”.
Zimra “ thus holds the key to all rough diamond exports from Zimbabwe,” the report says.
“Statements that Zimra is completely unaware of the exports of rough diamonds are therefore alarming as these could indicate that the KPCS-compliant export process for rough diamonds is no longer applied or not applicable in case of rough diamond shipments from Marange.”
However, Chikane and Van Bockstael’s report says further investigation showed that proper process was still being implemented for all rough diamond exports, including Marange, and that Zimra need only check its records to identify how much revenue through royalties had been generated by rough diamond exports.
This week at the annual KP Plenary in Johannesburg, campaigners failed to persuade the KP to block rough diamond exports by rebel movements and exports by governments which exploited diamonds to fuel violence.