GEM DIAMONDS Q1 PRODUCTION FALLS 38%

Gem Diamonds Ltd.'s rough diamond production for the first quarter of 2013 totaled 18,775 carats compared to 30,181 carats recovered in the fourth quarter of 2012. The 37.8 percent reduction in Letseng output during the period is as a result of the lower tonnes of ore mined and treated and mining taking place in lower grade areas, reports the miner.

"As anticipated, this quarter was in line with our reduced expectations for grade and quality. Throughput was relatively low, albeit planned. Rough diamond prices have improved over the quarter, but this is not reflected in our results because of the lower quality diamonds mined so far this year," explains Clifford Elphick, Gem Diamond Chief Executive Officer.

Gem Diamonds mined1.45 million tonnes of ore in the first quarter, down 8.5 percent from the preceding quarter, and treated 1.4 million tonnes of ore, down 9.6 percent from the fourth quarter of 2012. The grade recovered during the period was 1.27 carats per hundred tonnes (cpht), down 31.4 percent over the fourth quarter of 2012.

Letseng

According to the miner, the lower tonnes of ore mined and treated for this first quarter is due to test work undertaken at two plants at its Letseng mine in Lesotho in order to establish diamond damage profiles at various throughput rates in preparation for the site's new crusher installations. Additionally, an unplanned scrubber breakdown at one of the plants resulted in a two-day loss of production.

"Mining will return to the higher value satellite pipe at the end of Q2 this year. It is anticipated that this will result in improved revenues for the remainder of 2013," adds Elphick.

Diamond Sales

Gem Diamonds sold 29,205 carats worth US$46.7 million during three tenders held in the first quarter, an increase of 3.1 percent in volume but a decrease of 3.1 in value compared to the fourth quarter of 2012. The average value per carat decreased 6.1 percent to US$1,599 per carat compared to US$1,703 per carat achieved in the preceding quarter.

Meanwhile, six rough diamonds achieved a value in excess of US$1 million each during the tenders and 24 rough diamonds achieved prices greater than US$20,000 per carat.

Projects

The installation of the new secondary crushers for Plants 1 and 2 at Letseng is underway and on target for installation by the end of the second quarter. Gem Diamonds says it expects these crushers to contribute "significantly" to reducing diamond damage and improving revenues.

The miner notes that work is ongoing to revise Project Kholo implementation options, production levels and waste stripping profiles. Indicative costs, timelines and updates will be provided during the course of the second quarter.

With regard to the Ghagoo mine in Botswana, the company reports that its wholly owned subsidiary, Gem Diamonds Botswana, is progressing with its development of the mine.

Botswana diamonds book launched

This is the second book he has written and published; his first book, Crocodile Pools Botswana - History and Biodiversity, was published in 2011 and tells the story of a little known area just 20 minutes drive south from Gaborone and which is steeped in natural and military history and has a great diversity of fauna and flora.

In his latest offering the 11-chapter book, the first of its kind, is dedicated to the story behind Botswana's diamond success, it follows the diamond from "Mine to Finger", or "Rough to Store", in what is known in the diamond business as the "Diamond Pipeline".
It addresses revenues derived from diamond sales that have spearheaded Botswana's economic growth and development since independence, and how Botswana has transformed from being one of the poorest and least developed countries in the world to a middle-income economy. The book proved popular as most guests bought copies upon arrival.
In his speech, Brook said Botswana has now developed a full and continually expanding diamond pipeline, encompassing the stages of diamond prospecting and evaluation, mining, processing and recovery, sorting and valuation, sales and marketing, cutting and polishing and finally diamond jewellery manufacturing and retail. "The last few years have seen tremendous growth in the beneficiation of Botswana's diamond industry, involving the expanded development of the downstream stages of the pipeline, thus benefiting Botswana and Batswana substantially," he said.
Born in  Huddersfield, West Yorkshire, United Kingdom (UK) Brook first arrived in Botswana in 1980 to work as a bush diamond prospector for De Beers Prospecting Botswana. He completed a Masters Hydrogeology Degree at Birmingham University.
He would later establish a new groundwater division in the Civil Engineering Department of the Anglo American Corporation where he provided technical hydro geological support to Anglo American, Debswana and De Beers mining operations.
He also worked in the Middle East. The author has also  worked as a hydro geologist in Europe, the Middle East and Africa. In 2007, he and his family left Dubai for his current position as Group Hydro geologist with the Debswana Diamond Company, Botswana.

De Beers Official: Diamonds Pivotal For Anglo American

A senior official of diamond company De Beers says that the global mining company Anglo American has tied its own fate to that of the diamond industry, Rough and Polished reports. De Beers global head of corporate affairs David Prager attested to the importance of De Beers diamond mining projects to Anglo's overall portfolio.
 
Anglo purchased the Oppenheimer family's 40% share in DB Investments and De Beers SA for over $5 billion in 2012. With Anglo already owning 45% of the firm, the buyout catapulted its stake in De Beers to an 85% controlling interest.
Prager noted that once the sale of the Oppenheimer shares went through, Anglo signed off on the underground expansion of its Venetia diamond mine in the Limpopo province of South Africa. This $2 billion expenditure is proof positive of Anglo's vested interest in the diamond industry, according to Prager.
De Beers chief executive Philippe Mellier affirmed that Anglo was intensifying its ties to the diamond industry via De Beers, and that in his estimation this is a positive development.

Ekati's Reserves Support Production Into 2019

Dominion Diamond Corporation, formerly Harry Winston Diamond Corporation, reported that current reserves at its Ekati diamond mine in Canada's Northwest Territories would sustain mining into the year 2019, at least, according to its first round of estimates.

The Ekati mine, in which the company recently acquired from BHP Billiton, has indicated mineral resources, inclusive of mineral reserves, estimated at 127.5 million carats.  However, inferred mineral reserves contain 19.1 million carats and more  immediately, economically-viable probable mineral reserves contain 19.6 million carats.

Mineral resource estimates cover stockpiles and the Koala,  Fox, Misery, Pigeon, Sable, Jay  and Lynx kimberlite pipes, while mineral reserves (those resources known to be economically feasible)  refer to the company's Core Zone joint venture with all kimberlites except Sable, Jay and Lynx. The company noted, however, that it could in fact be able to incorporate  Jay, specifically,  and Lynx deep mineral resources into the life-of-mine plan once sufficient and additional technical work has been undertaken on those pipes.

Nonetheless, with a projected recovery of just the reserves of 19.6 million carats during the next seven years, the company anticipates revenue from that production of $4.2 billion, expenses of $3.1 billion, taxes of $514 million and a net present value, at a 7 percent discount rate, of $460 million. The estimate assumes a 2 percent annual increase in rough prices.

The company also said that there is additional potential for supplemental process plant feed in the form of coarse reject tails in those stockpiles at Ekati, all of which have been collecting since the start of production in 1998.  There is also potential to treat low-grade stockpiles, primarily derived from open pit mining at Fox, if the grades in the stockpiles can be demonstrated to be economic with additional testwork, according to the company.

The Ekati diamond mine consists of 282 mining leases over 262,175 hectares, containing 150 known kimberlites. To date, Ekati has produced 53.5 million carats since production began in 1998.

Source: Diamonds.net

ALROSA's Exec. Committee Recommends Dividend Increase

ALROSA’s executive committee approved the company's annual report in which rough production was flat year on year at 34.4 million carats and aggregate diamond sales in 2012 rose 3.6 percent to $4.61 billion. The committee noted that rough diamond sales amounted to $4.45 billion, an increase of 4.1 percent from 2011. Profit, in local currency and as reported under Russian Accounting Standards (RAS), jumped 34 percent year on year to RUB 39.7 billion, but by dollar value the figure rose 25 percent to $1.3 billion.

Given these results, the committee recommended a 10 percent year on year increase in dividends or  RUB 1.11 per ordinary share of 50 kopecks par value. The proposed  dividends would amount to about $259 million (RUB 8.175 billion). The committee also  proposed that ALROSA retain the remaining $996 billion (RUB 31.5 billion) in profit. Their recommendation was sent to ALROSA's supervisory board for consideration and final approval.
Russian firms whose shares are in federal ownership must allocate at least 25 percent of its profit to dividends under the RAS, less  income received from revaluation of financial investments. ALROSA’s profit (without revaluation of financial investments) in 2012 amounted to $796 million (RUB 25.182 billion), according to the committee, therefore it allocated  32.5 percent of profit for dividends.

Source: diamonds.net

Report Cites Continued Abuse at Marange Mines

Residents and artisanal miners in Zimbabwe's Marange region are still experiencing human rights abuses at the hands of security personnel employed at the diamond mines in the area, a recent report showed. The report compiled by Centre for Research and Development (CRD) highlighted 11 recent encounters between security and locals in the area between February and March 2013. These encounters resulted in dog attacks, beatings and one shooting incident that resulted in the death of Herbert Manhanga. Manhanga was shot by security guards in an area outside of Marange Resources concession on March 6, 2013 and died on the spot after sustaining two bullets to his head. Family members told CRD that they have since received no assistance from Marange Resources and that no further investigation is being conducted into his death as he was shot in a protected area. CRD subsequently battled to obtain a response from Marange Resources regarding the incident. "Efforts by the executive officer’s personal assistant Ms Dhlwayo to grant CRD audience with the chief executive officer were rendered fruitless as the executive officer could be heard over the phone instructing her to direct us to phone the mine’s switchboard despite his earlier promises to speak to us," CRD said. CRD notes other incidents of abuse include an attack on 25 year old Tariro Saungweme from Mutare who was caught panning for diamonds in the Marange Resources mining area with a syndicate of four people. He was immediately arrested after intense and heavy beating where he sustained a deep cut on his forehead. Dogs were set loose on the rest of the syndicate. The following day, 27 year old Netsai Nechipote was caught by guards in the mining area operated by Mbada Diamonds during the night with a syndicate of six panners. The guards ordered them to lie down and others fled leaving Netsai alone with the guards. She was severely beaten and taken to the guard room for further beating. She was released the next morning and driven and dumped close to Odzi River by company guards. A local businesswoman covered her travelling fees to help her get home. Her condition remains unknown, CRD reportned. Another encounter with guards involved John Mutakura aged 34 years of Zimuto Camp area Masvingo. He was on his way to fetch water and relish for his meal when he met with National Eye Security and members of the uniformed forces around the Chiadzwa restricted area at 9 am. Mutukare tried to run away but was overpowered by two dogs that bit him. He sustained serious deep cut wounds on his head and leg. CRD's report details a further eight violent incidents. To date, seven companies operate in the Marange area namely Marange Resources, Ge Nyame, Anjin, Mbada, Zimbabwe Diamonds, Jinan, and Diamond Mining Company (DMC). These companies are either government owned or joint ventures between government entities and foreigners. CRD also noted that no known efforts have been made by government to grant a diamond mining concession to the local community in Marange. CRD called on government to force mining companies to account for human rights incidents taking place in Marange and to immediately address security problems in the fields.

Source: diamonds.net

Rough Pink Diamonds in Online Auction

Rough diamond auctioneer eDiamond will hold an online auction for a 7.37ct fancy vivid pink diamond. The diamond is one of many rough diamonds available at the auction.

 

The April 30 online auction consists mainly of large white diamonds and fancy pinks.

The goods are available for viewing in Antwerp until the April 22 and from then until April 29 in Israel.

Source: IDEX

Petra Diamonds finds rare 25.5 carat blue stone

Petra Diamonds has recovered a 25.5 carat blue diamond at its famous Cullinan mine in South Africa that could be worth more than $10m (£6.5m).

 

The diamond is a rare blue colour and Petra says the stone is considered to be a “high quality gem diamond of top colour”.

The Cullinan mine is renowned for its large diamonds, with many stones discovered there now set within the Crown Jewels. These include the Great Star of Africa which was discovered at the mine in 1905.

“Blue diamonds are the rarest of all diamond and Cullinan is one of the largest producers of the stones,” Jeremy Dibb, an analyst at broker Canaccord said. “Cullinan produced an important blue stone following the acquisition by Petra Diamonds.”

This previously discovered 26.6 carat fancy vivid blue stone was cut into an internally flawless 7.03 carat polished stone.

This blue diamond was sold at auction at Southeby’s in May 2009 and achieving a record price per carat for any gemstone sold at auction, hitting $9.49m or $1.35m per carat.

Coloured stones are in demand because of their rarity, with a pink stone breaking record at an auction at Christies in New York earlier this week. The 34.65 carat stone sold for $39.3m, or $1.13m per carat. Named the Princie Diamond, it was purchased by an anonymous collector bidding by telephone.
Petra Diamonds, a member of the FTSE 250 index, saw its shares rise 0.6p to 108p following the discovery.

Source: Telegraph

Lazare Kaplan Estimates 3Q Sales -31% to $15M

Lazare Kaplan International Inc. notified the Securities and Exchange Commission (SEC) that it would again be filing a quarterly financial report late for the fiscal period that ended on February 28, 2013. Nonetheless, Lazare Kaplan  estimated that its revenue for the fiscal third quarter fell 31 percent year on year to $15.3 million, while sales for the first nine months of the fiscal year slipped 38 percent to and $50.2 million. The decrease reflected a drop sales of both polished and rough diamonds, according to the company.
 
Lazare Kaplan has been unable to file its quarterly and fiscal-year financial statements since September 2009 due to unresolved material uncertainties concerning  the collectability and recovery of certain assets and potential obligations under certain lines of credit. The company stated that uncertain economic conditions continue to impact the diamond and jewelry industry. In addition, its litigation with Antwerp Diamond Bank N.V. and KBC Bank N.V., and the inability of the company to timely resolve these material uncertainties, has adversely impacted its ability to transact business.
Once Lazare Kaplan has resolved these issues, it intends to file the current year's first through third quarter  financial statements, as well as  full results for each of its fiscal years that ended on May 31, 2009, 2010, 2011 and 2012, according to its statement.
Meanwhile, the company updated the SEC on its ongoing litigation with KBC Bank and Antwerp Diamond Bank. In April 2012,  KBC and Antwerp Diamond Bank filed motions to dismiss Lazare Kaplan's $500 million Racketeer Influenced and Corrupt Organizations Act (RICO) complaint against them, which a U.S. District Court judge granted on September 5, ruling that the suit must handled in Belgium. Nonetheless, Lazare Kaplan appealed that judge's decision.
On March 21, Lazare Kaplan filed criminal proceedings against Antwerp Diamond Bank in Antwerp, alleging fraud, embezzlement and money-laundering. The Belgian judge ordered Lazare Kaplan and Antwerp Diamond Bank to brief their positions on the potential need to suspend the civil proceedings, pending the resolution of criminal allegations. Proceedings in that criminal case are scheduled to commence on May 3 and further proceedings in the civil case are currently scheduled for May 31.
Lazare Kaplan believes that the litigation  have a significant detrimental effect on the company's ability to transact business in the ordinary course.

Source: Diamonds.net

Rockwell Diamonds Divests Interest in Klipdam Mine for $2.5 Mln

Rockwell Diamonds Inc. (RDI.TO) has reached an agreement to sell the Klipdam Mine and associated properties for a total cash consideration R23 million (C$2.5 million). This brings the total proceeds from the sale of this asset to R48 million, including the sale of the earth moving equipment in October 2012.

The proceeds will be reinvested in bringing the Niewejaarskraal Mine into production and progressing its strategy of growing its operating footprint in the Middle Orange River region of South Africa.

Thieves Use Ice Picks To Nab $500,000 In Diamonds

Half a million dollars worth of diamonds and precious gems were stolen at a Seattle, Washington shopping mall last week, Fox News reports. The stones were stolen from a jewelry courier as he was preparing a case to take on a delivery.

The courier told law enforcement officials that he was accosted by men who emerged from a van and threatened him with ice picks. According to the courier's version of the events, one of the men grabbed the case carrying the gems from his hands, while another man used the ice pick to hold him back. One of these assailants also punctured one of the tires on the courier's vehicle. The courier, who suffered no injuries, was unable to say, however, whether there had been two or three thieves, according to Fox News.
There was no word on whether the stolen gems were rough diamonds or polished diamonds.

Third licence added to Botswana Diamonds/Morminas agreement

Aim-listed Botswana Diamonds on Thursday said a third license block would now be evaluated on the Save river, in Mozambique, as part of its recently signed option agreement with a Mozambican company Morminas.
 
Botswana Diamonds aimed to explore the potential for alluvial and eluvial deposits that may have washed down in the river from the Marange diamond fields, which were predicted to produce up to 16.9-million carats in 2013.
The miner stated that the agreement stipulated a six-month exclusivity period during which it would review the available data on the licences and undertake preliminary exploration. Initial work had already started and a site visit had been scheduled.
Botswana Diamonds chairperson John Teeling indicated that the company would negotiate a long-term agreement with Morminas, should the analysis prove positive.
"Acquiring this additional licence increases the scope of our prospective play close to the Marange diamond fields in Zimbabwe. The experience and knowledge gained already in Zimbabwe will be invaluable in identifying diamond prospects in the Save region,” he said.

Dominion Diamond Completes Ekati Acquisition for $553M

Dominion Diamond Corporation, formerly Harry Winston Diamond Corporation, completed its planned acquisition of the Ekati diamond mine, which included associated diamond sorting and sales facilities in Yellowknife, Canada and Antwerp. Ekati consists of a core zone, which includes the current operating mine and other permitted kimberlite pipes, as well as a buffer zone, an adjacent area hosting kimberlite pipes having both development and exploration potential. Dominion Diamond purchased the assets from BHP Billiton for $553 million and it officially marks the end of BHP's diamond investment. 

Robert Gannicott, the chairman and CEO of Dominion Diamond, said, "We are very pleased to be able to bring our northern mining background and diamond marketing skills to bear on a project that is well constructed, well operated and well-endowed with resources that represent a promising future for shareholders, employees and northern stakeholders."
Ekati held cash of approximately $65 million on the closing date and two sales cycles (10 weeks) of diamond inventory either in the process of being sorted and valued or available for sale. This inventory will be valued against Dominion Diamond's rough diamond sales assortments. Dominion Diamond also provided letters of credit to the Canada of approximately $127 million in support of reclamation obligations for the core zone. The purchase price and the letters of credit were satisfied from or secured by cash on hand.
Dominion Diamond expects to release a detailed mine plan for Ekati on or before April 24.

Source: Diamonds.net

Diamonds: Driven by market forces for the first time in 100 years

Up until recently the diamond industry had a structural flaw — just one player controlled it. De Beers was the diamond industry, and diamonds were synonymous with De Beers. However, over the last 25 years, a series of events led to the dismantling of the De Beers monopoly. Today, De Beers no longer has complete control of the diamond industry, and for the first time in a century, market forces, not the De Beers monopoly, drive the diamond market.
In the late 1800s after a massive diamond discovery in South Africa, a diamond rush was born, and businessman Cecil Rhodes bought as many diamond mining claims as he could, including farmland owned by the De Beer family.  By the turn of the century, Rhodes had accumulated enough properties that his company accounted for the majority of the world’s supply of rough diamonds.  He called his company De Beers Consolidated Mines Limited.
As De Beers maintained a hold on the worlds rough diamond supply through the first quarter of the 20^th century, financer Ernest Oppenheimer began accumulating shares of De Beers whenever available, and reached a controlling stake of the company by the mid-1920s.  Under Oppenheimer’s control, De Beers further expanded into every facet of the diamond industry, intent on monopolizing distribution. De Beers successfully influenced just about all of the world’s rough suppliers to sell production through the De Beers channel, gaining control of the global supply not produced by De Beers mines. The cartel was born, giving Oppenheimer the power to influence diamond supply and thus diamond prices.
The De Beers distribution channel, named the Central Selling Organization or CSO, (later changed to Diamond Trading Co. or DTC), had the power to sell what, when, and where they wanted to.  In order to buy from CSO, membership as a “Sightholder” was required, which was completely the discretion of De Beers, as was the quality and price of the product being sold. No negotiation between the CSO and Sightholder occurred, all transactions were take-it-or-leave-it.  In order to maintain a stable but rising diamond price, De Beers had the power to stockpile inventory in a weak market or raise the prices charged to Sightholders, and then in an excessively strong price environment (with the potential to damage demand), De Beers had the excess supply on hand to release to the market when needed, repressing disorderly price increases.
To keep the system intact, it was necessary for De Beers to maintain control of the world’s rough diamond supply via purchases through CSO.   In the second half of the 20^th century, as new world class mines were discovered in Russia, Australia and Canada, it became more and more difficult for De Beers to purchase all global production.  The biggest risk to the survival of the cartel was for mines to begin selling directly to the market, thus bypassing De Beers.

Source: WWW International Diamond Consultants Ltd, Economic Times of India, and Authors analysis.
Russia (present day the world’s largest diamond producer by value) began producing diamonds in the mid-twentieth century.  At first, the Russians agreed to sell production to De Beers keeping the cartel intact.  However, this quickly became extremely costly to De Beers as the Russian mines produced greater quantity and lower quality stones than anticipated. This prompted De Beers to commence the ”Diamond is forever” marketing campaign, transforming the image of diamonds to a proxy for love, expanding demand of lower quality stones to a new middle class American market, in an effort to absorb the new supply.  Another challenge emerged in 1963 when Anti-Apartheid legislation restrained the Soviet Union from dealing with a South African company.  But the final blow to the arrangement came during the Soviet Union collapse in the 1990s, when political chaos and a weak ruble further separated Russia’s production from De Beers.

Shortly after losing control of Russian supply, the Argyle Mine in Australia, at the time the largest diamond producing mine in the world by volume, broke away from the DeBeers supply chain. Over the next few years, other mines followed suit, as new world-class mines in Canada sold supply independent of De Beers.
The emergence of new supply distributed outside of CSO meant that De Beers, was forced to hold back from selling large portions of its own inventory and to purchase excess supply from its new competitors in the open market, in an effort to maintain control of the market.  By the end of the 1990s, De Beers’s market share had fallen from as high as 90% in the 1980s to less than 60%.  De Beers no longer had control of the market in 2000, when the company announced a shift in strategic initiative to focus on independent marketing and branding, rather than generic diamond price control.
However, the monopoly officially ended in 2001, when several lawsuits were filed in U.S. courts alleging that De Beers “unlawfully monopolized the supply of diamonds, conspired to fix, raise, and control diamond prices, and issued false and misleading advertising.” After multiple appeals, in 2012 the U.S. Supreme Court denied final petition for review, and a settlement in the amount of $295 million with an agreement to “refrain from engaging in certain conduct that violates federal and state antitrust laws” was approved.

Source: WWW International Diamond Consultants Ltd, Gem Certification & Assurance Lab, Price Scope, and Authors analysis.  Price constitutes various qualities of rough and polished diamonds, and shows diamond price deviation from starting basis of 100 beginning in 1987.
The way De Beers did business, which revolved around the central concept of controlling supply in the market, was simply not viable in a more competitive environment, and De Beers could not maintain the monopoly.  From 2000 to 2004 diamond prices modestly declined, as the De Beers stockpile was liquidated into new demand coming out of Asia.  By 2005, the inventory overhang had been lifted allowing market forces to drive diamond prices for the first time in a century, resulting in unprecedented price volatility.  Diamond prices made a new high in 2007, followed by a violent sell off in 2008 and 2009 before rebounding to another new high in the summer of 2011.
With a market share of less than 40%, in 2011 the Oppenheimer family announced a complete exit from De Beers, ending almost a century-long ownership of perhaps the greatest monopoly in history.

Canadian miner's garnet find points to diamonds in Botswana

 

 

 Microscope photo example of garnets from another area of the Tsabong North project

Pangolin Diamonds Corp. (TSX.V: PAN) said last week it had extracted high-pressure garnets that point to a possible diamond-bearing kimberlite pipe at one of its exploration projects in southwestern Botswana, reports MiningWeekly.com.
Veteran geologist and Pangolin chairman Dr. Leon Daniels said in a written statement he had never seen such a high concentration of garnets in a drill core sample area of this size in Botswana before. Further drilling is taking place and more results are to come.
The company believes this find is similar to the one recovered from the DK2 kimberlite pipe in the Orapa field found at De Beers-operated Letlhakane mine, one of the two largest in the world, in the country's central district.
Pangolin owns 11 prospecting licences in Botswana, including the Tsabong North, Jwaneng South, Malatswae and Mmadinare projects.
The country supplies 21% of global rough diamond production, which makes it the largest diamond-producing nation in the world by value.

Zimbabwe diamonds flood Dubai

International sanctions have targeted President Robert Mugabe’s inner circle and the country’s economic pillars such as the diamond industry, revenues from which have allegedly been used to finance the ruling party and the security forces.

But the country has found a crucial route to global markets.
Over the past five years Dubai — known for its relentless pursuit of new markets and willingness to deal with all manner of regimes — has become a significant conduit for legal Zimbabwean exports of rough diamonds.
“Dubai was our saviour,” said Christopher Mutsvanga, chairman of the Minerals Marketing Corporation of Zimbabwe, which is under US sanctions.
According to the latest available figures, Dubai imported US$408 million worth of Zimbabwean diamonds in 2011, up from US$1,7 million in 2008.
While it is not illegal for Dubai to buy them, some gems from Marange fields — which account for the vast majority of Zimbabwean stones — are tantamount to “conflict diamonds”, human rights activists say.
With the diamond fields allegedly under the control of the military — which is loyal to Mugabe’s Zanu PF party — his opponents say profits are siphoned off to fund the security forces, which have been repeatedly accused of human rights abuses.
For his part, Obert Mpofu, Mines and Mining Development minister, says sanctions are “politically-motivated” and the measures of “former colonisers”.
Most rough stones that arrive in Dubai are re-exported for polishing, mainly to the manufacturing centre of India. Other destinations include Belgium, China and Thailand.
In 2011 the Kimberly Process, a co-operative system between 80 states to certify that diamonds are not contributing to conflict, approved Zimbabwean gems for sale.
One of its founders, Global Witness, which campaigns against the abuse of natural resources to fund repressive regimes, then withdrew from the process, saying it had become an accomplice to diamond laundering.
Global Witness say there is not enough oversight of the provenance of stones arriving in western markets.
The pressure group says Dubai has become a popular staging post for such “tainted goods,” allowing companies to avoid scrutiny in western markets by re-exporting gemstones via the Emirates.
“Dubai is crucial,” says Emily Armistead of Global Witness. “It is not covered by sanctions and so it’s an easy route for diamonds to pass through and avoid these restrictions.”
Global Witness says its investigations have revealed links between some joint-venture diamond mining companies and the military, police and intelligence organisations loyal to Mugabe.
“Global Witness’ investigations point to a serious risk that diamond revenues could be used to fund violence in this year’s election,” the advocacy group said this year.
Officials in Dubai say they did not import Zimbabwean gems when the Kimberly Process restricted Marange gem trade. They also deny claims made several years ago by its former chief executive that the Dubai bourse had turned a blind eye to “conflict diamonds”.
The trade with Zimbabwe comes as Dubai’s share of the global gem business has risen.
Larger volumes from bigger producers such as Russia, Botswana and Angola has pushed the value of the diamond trade in Dubai from negligible rates in 2005, when the emirate set up its diamond bourse, to US$39 billion in 2011.
The diamond bourse is located in Almas Tower, the region’s tallest commercial tower, part of the fast-growing Dubai Multi Commodities Centre (DMCC), which boasts five new corporate registrations a day.
Mpofu says the government is setting up an office at the DMCC to boost exports further.
The DMCC plans more incentives to boost the trade in gems.
“Dubai has a clear African strategy,” says Peter Meeus, chairman of the Dubai Diamond Exchange, home to 600 diamond companies. “We are here to assist African states to trade here,” says Malcolm Wall Morris, DMCC chief executive.
This year, the EU suspended most sanctions after the country’s voters approved a new constitution, limiting presidential powers and paving the way for elections. —Financial Times
For Zimbabwe’s cash-strapped government, diamond sales should be an important source of revenue.
However, Tendai Biti, the finance minister and member of the MDC-T, which shares power with Zanu PF, regularly complains about the murkiness of the industry and the small amounts it contributes to state coffers.
Biti has battled for increased transparency in the management of diamond revenues without success, underscoring the limited powers of MDC members of the dysfunctional unity government that took office in 2009.
Last year, the country exported US$760 million worth of diamonds—its second-biggest export earner after tobacco —while the government’s official take was US$84 million.
Opposition politicians fear the diamond money will go towards keeping the security forces on Mugabe’s side and could be used to help to fund the Zanu PF political campaign.

ALROSA may look for diamonds in Africa

Major diamond producer ALROSA is considering resuming business in Africa, which it froze in 2009. Russia’s diamond monopoly has been in talks with the Angolan government and plans to set up ventures in Botswana and Zimbabwe. High political risks are forcing the company to focus on geological exploration projects, which do not require large-scale investments.

Kommersant learned of ALROSA’s plans from a source close to the diamond company. The source noted that ALROSA has already completed preliminary negotiations with Endiama (the Angolan government’s representative in all diamond projects) over a joint venture, which will engage in exploration outside of the Catoca diamond mine project.
“We are talking about looking for new primary deposits in the country’s northwest, near the border with Congo, which is home to many promising areas,” the source told Kommersant, adding that ALROSA had made preliminary inquiries about obtaining exploration licenses for the joint venture in the Kwanga and Luminas regions.
ALROSA’s business in Angola is effectively limited to the Catoca project, in which it holds a 32.8-percent stake. GRO Catoca Ltd. was founded in Angola in 1992 to develop a kimberlite pipe of the same name. ALROSA partnered with Angola’s Endiama (32.8 percent) and Brazil’s Odebrecht (16.4 percent) on the project.
In the late 1990s, the Russian company sold 18 percent to entities owned by Israeli entrepreneur Lev Leviev, who sold his stake a few years ago to Hong Kong-based China Sonangol International Holding – the largest buyer of Angolan oil – for $400 million.
ALROSA has proposed establishing a geology council, which will be attached to the company’s chief executive board and control all geological exploration in Catoca’s area of responsibility. ALROSA also hopes to set up a cooperative agreement with the Angolan side on a national program to evaluate the country’s diamond production potential.

Catoca is a lucrative project for the Russian company, which collects around $30 million in dividends from the venture annually.
ALROSA’s plans for Africa are not limited to Angola. Last week’s meeting of ALROSA’s international operations committee heard a report that also named Botswana – the world’s second largest diamond producer after Russia – and Zimbabwe as priority countries for business development.
“In Botswana, ALROSA is considering a joint venture with Botswana Diamonds PLC, which holds 13 exploration licenses in that country, for the purpose of looking for new kimberlite bodies. In case these are discovered, we will seek a concession,” the source told Kommersant, adding that ALROSA expected to spend around $1 million in Botswana this year.
In Zimbabwe, ALROSA is looking for a partner to set up a similar joint venture for the geological exploration of diamond-rich areas in the Marange diamond fields.
“ALROSA is approaching the selection of a project in that country with more caution: A presidential election should take place there in the summer, which could potentially change the political situation in a serious way,” the source told Kommersant.
Robert Mugabe, one of the world’s oldest heads of state at 89 years old, has been Zimbabwe’s president since 1987. The West considers his regime to be a dictatorship. The European Union and the United States have imposed sanctions on a number of state-owned Zimbabwean companies.
“Angola is one of the few places in the world with a high probability of discovering primary diamond deposits. The only problem is that the political risks in the region are increasing by the day, as the echo of the Arab Spring has already spread to central Africa,” said Rough&Polished trade agency expert Sergey Goryainov. A military coup occurred in the Central African Republic just one week ago, in late March.
Goryainov believes that, under the circumstances, ALROSA is now choosing projects in Africa more carefully.
“ALROSA used to invest heavily in Angola, focusing on large-scale, capital-intensive projects with uncertain economic outcomes," he said. "A case in point is the extremely expensive projects at the Luo diamond deposit and the hydro power plant at the Chikapa River. Now ALROSA is proceeding more cautiously, which is totally justified in this situation.”
ALROSA’s subsidiary Escom-Alrosa Ltd. holds a 45-percent stake in Luo-GRO Kamachia-Kamajiku Ltd., which was founded in 2002 to engage in geological exploration at the Luo River. In 2009, ALROSA froze its participation in the project after investing more than $100 million in it.

Birks Debuts 16-Ct. Fancy Intense Yellow Diamond in Edmonton

Birks in Canada is premiering a 16.01 carat, VVS1, fancy intense yellow diamond at its Edmonton location beginning this week. The diamond is set in a platinum ring and adorned with diamond pavé.
The diamond will head to Birks in  Calgary after its Edmonton showing.
This yellow diamond's color is of natural origin and its large size and high-clarity makes it exceptional, according to Birks.

The stone was recently discovered and the retailer is marketing it as ''guaranteed conflict-free'' since it was sourced ethically through ''a responsible chain of custody.'' 

Source: Diamonds.net

$400,000 in diamonds stolen from city store

Police are searching for a couple following the theft of $400,000 worth of diamonds from a jewellery store in Castlereagh Street, Sydney.
 
Police say the pair, pretending to be customers, were shown a number of pieces on Tuesday.
"It's alleged that, while no one was looking, the man entered a workshop area and stole a number of rare high-quality diamonds," police said in a statement.
The couple left the shop a short time later while the theft was noticed only the following day.

 

After reviewing CCTV footage, police believe the pair "may be able to assist with our inquiries".
Police say the man was about 40-45 years old. He was wearing a short-sleeved checked shirt, dark blue denim jeans, dark grey casual shoes and dark sunglasses.
The woman was about 35-40, about 155-160 centimetres tall, with a medium build and dark olive skin. She was wearing a pink T-shirt with "I love Australia" written on it, dark blue jeans, dark shoes, a tan coloured bucket hat and was carrying a large bag.

Costco Attempts to Defend Sale of Counterfeit TIFFANY Diamonds

On February 15, 2013, Tiffany and Company filed a lawsuit against Costco Wholesale Corporation in the U.S. District Court for the Southern District of New York, alleging that Costco was engaging in the sale of counterfeit TIFFANY diamond engagement rings. 
 
The complaint filed by Tiffany alleges counterfeiting, trademark infringement, dilution, unfair competition, injury to business reputation, false and deceptive business practices and false advertising. Tiffany’s is seeking a permanent injunction, damages, treble damages and punitive damages for the alleged infringement and other alleged unlawful acts, but if you read the complaint carefully it seems pretty clear that what they really want is to make a public example out of Costco. They want everyone to know that they are watching and when they find infringers they will act swiftly. Thus, Tiffany has asked for an apology and they want the world to know that they never have and never will sell their rings to discounters or wholesalers. For more information see Tiffany Sues Costco Over Counterfeit Diamond Rings.

This should have been an open and shut case. But then Costco decided to aggressively defend what seems indefensible.
Costco is basing its defense on the belief that the “[t]he word Tiffany is a generic term for ring settings comprising multiple slender prongs extending upward from a base to hold a single gemstone.” See opening paragraph of the Costco Answer and Counterclaim. In support of this position Costco submitted dictionary definitions, pages from Wedding Planning for Dummies discussing rings, online articles (such as from About.com), online sales pages (such as from Amazon.com) and other materials.
To the uninitiated this line of defense may seem peculiar at first, and then upon learning a bit about the law behind the defense it might seem as if Costco has the upper hand. Let’s dig a little deeper here to see what is going on and then I’ll offer my assessment of what is likely to happen.
First, let’s begin with what we learned from Tiffany & Co. when we contacted them for further comment after Costco filed its Answer. Linda Buckley, who is Vice President of Worldwide Public Relations at Tiffany & Co., told us that their trademark has been registered for over 175 years and they look forward to proving Costco’s infringement in court. She explained:

Costco’s answer seeks to muddy the waters, but one thing remains clear. The TIFFANY mark is a federally registered incontestable trademark, has been continuously used for over 175 years and enjoys worldwide fame and recognition as designating superior goods from Tiffany & Co, and particularly Tiffany & Co. diamond engagement jewelry.  When Costco used that trademark to refer to goods that had nothing whatsoever to do with Tiffany & Co., they infringed Tiffany’s trademark, while damaging both their own customers and the Tiffany brand. Costco’s counter-claim is an unfounded and weak attempt to defend its willful and infringing use of the TIFFANY trademark. We look forward to proving this in the upcoming court case.

Obviously, Tiffany is going to fight. They have to fight hard. Their entire business is build upon luxury quality and it would be devastating if anyone could claim they are selling TIFFANY diamond rings. Tiffany will not roll over, and they will fight as hard as they have to in order to win. Eventually, I think they will indeed win.
Second, what is this business about the TIFFANY mark being incontestable? How can an incontestable trademark be challenged? Incontestable legally does not mean what the word suggests.
An “incontestable” trademark registration is conclusive evidence of the validity of the registered mark, of the registration of the mark, of the owner’s ownership of the mark and of the owner’s exclusive right to use the mark with the associated goods or services. In order for a trademark to achieve incontestable status a filing must be made between the 5th and 6th year after the trademark has been registered.
Achieving incontestable status does not mean that the trademark cannot be challenged. It means that the grounds for challenging a trademark are significantly reduced. A registered trademark can still be challenged even if it is incontestable if the trademark has become a generic name for the goods or services, the trademark is functional, the trademark has been abandoned, or the registration of the trademark was obtained fraudulently. See 15 U.S.C. 1064. There seems to be absolutely no legitimate way to say that the trademark has become functional, it clearly has not been abandoned, and it would be virtually impossible to even begin to demonstrate that it was obtained fraudulently. Thus, in order to defend this counterfeiting case the only option Costco has is to allege that the TIFFANY trademark is generic. It is akin to a “Hail Mary pass” with no time remaining on the clock.
But is the TIFFANY trademark generic? A casual review of the Costco filing could make you think that the TIFFANY trademark has become synonymous with a certain type of diamond ring, which would mean that it has lost its ability to operate as a source identifier. But a closer look at the allegations, at least in my opinion, shows that Costco is attempting to conflate the issue.
The complaint explains in summary fashion the investigation that ensued after Tiffany learned of what Costco was doing. The complaint reads in relevant part:

Subsequent investigation showed that in the jewelry display case at the Huntington Beach Costco location was an engagement ring alongside a point of sale (“POS”) sign marked “639911 – PLATINUM TIFFANY .70 VS2, 1 ROUND DIAMOND RING – 3199.99,” and another ring alongside a different POS sign marked “605880 – PLATINUM TIFFANY VS2.1 1.00 CT ROUND BRILLIANT SOLITAIRE RING – 6399.99.” (emphasis added)  The Costco salesperson also referred to each of the rings as a “Tiffany ring,” and said the store generally carries one of each item.

Thus, Costco was selling TIFFANY diamond rings when they were not from Tiffany & Co.
In the Costco Answer and Counterclaim, Costco defends and comes out swinging saying:

Costco not only denies having infringed or invaded any legal rights of these Plaintiffs, but Costco asks the Court to order that the Plaintiffs be prohibited and enjoined from ever again asserting false claims of the right to exclude use of Tiffany as a generic term for a style or type of ring setting. By its counterclaim herein, Costco seeks a judgment declaring invalid, and ordering modified or partially canceled, federal trademark registrations which the Plaintiffs have put forward as purportedly evidencing or supporting false claims of right to prevent Costco and other retailers from suing the word Tiffany to indicate that a ring has a Tiffany setting, i.e., a setting comprising multiple slender prongs extending upward from a base to hold a single gemstone…

Thus, Costco says they believe they have a right to sell rings that present in a Tiffany setting.
Clearly, at least in my opinion, Costco is overstating their case and affirmatively twisting and misrepresenting what Tiffany has charged them with. This type litigation strategy is unfortunately commonplace. Twist and obfuscate the facts in order to confuse.
Tiffany is not complaining about Costco selling rings in a Tiffany setting, they are complaining about Costco selling TIFFANY diamond rings when in fact they are not TIFFANY diamond rings. So don’t be confused by the artful dodge of Costco. The Costco Answer does nothing to substantively address the charges brought by Tiffany & Co. Even if the district court believes everything asserted in the Costco Answer and Counterclaim they are still liable for trademark infringement because they sold counterfeit TIFFANY diamond rings.
If you doubt the analysis ask yourself this: If Costco believes they did nothing wrong then why were they only selling these diamond rings as “TIFFANY diamond rings” in real world, brick and mortar stores? It is curious that they were not selling these rings they claim to have every right to sell on their online store. That will be quite hard to explain, and if I were the Judge I would need an extremely convincing answer to that question otherwise I would almost certainly view that as conscious knowledge by someone that they knew what they were doing was wrong. Perhaps it can be explained, but I am hard pressed to think of any rationale explanation that would seem convincing.
Finally, from a strategic standpoint I think what Costco is doing here is a mistake. Any reasonably objective observer has to know that Tiffany can’t afford to lose this case and will put whatever they must behind winning. Rather than apologize, explain it was an unfortunate rouge act that can happen in any company as large as Costco, they are doubling down. This doesn’t strike me as thoughtful risk management strategy. Perhaps they are just trying to raise the stakes for a better settlement or to save face, but coming out swinging like this will likely only force Tiffany to take a harder line and make an even bigger example out of Costco.