Sunday, June 30, 2013

Roland Lorie IGI

International Gemological Institute is the world’s largest independent laboratory for testing and grading diamonds, colored stones and fine jewelry. Established in 1975, IGI has offices in Antwerp, New York City, Hong Kong, Mumbai, Bangkok, Tokyo, Dubai, Tel Aviv, Toronto, Los Angeles, Kolkata, New Delhi, Surat, Chennai, Thrissur, Ahmedabad, Hyderabad, Shanghai, and Cavalese. It also runs Schools of Gemology in several locations around the globe.

Name: Roland Lorie

Company: International Gemological Institute; Co-CEO

1. What differentiates your organization from others?

With my partners and the IGI managers worldwide we like to use the term “glocalisation”; think global, act local. IGI is using the same grading and testing standards worldwide but the working systems can be adapted to local culture. This allows us to combine the best possible product, the IGI certificate, with efficiency by allowing our staffs to work partially based on the local cultures.

2. If you could make any change to the industry, what would it be?
There are many changes I would like to make, but today, immediately, I would tell the leaders of this industry to decide how to handle synthetic diamonds. This is a realistic issue that will most assuredly not disappear. We still see small amounts but it is going to grow for sure. Today decisions can still be made that will have an impact, but 2-3 years from now it could be too late.

3. What advice would you give to someone starting out in the diamond and jewelry sector?

Today it is not a mama and papa business anymore and he/she needs to be very professional in everything he/she does. Not only do you need to have a perfect knowledge of the product you are working with, but you also need to work with bankers, lawyers, accountants, marketing companies, and so on. So don’t hurry, and get the maximum experience outside the industry. I always told my kids “join me the day you will be able to teach me as much as I can teach you”.

4. What prompted you to pursue a career in the diamond and jewelry industry?

I am the fourth generation in this industry and at that time it was the natural choice to follow in the family tradition. At the same time it was, and still is, definitely not the worse trade to be a part of. You work with one of the most beautiful items on this planet: gems.

5. How do you envision your business 10 years from now?
Certificates for diamonds, colored stones and even jewelry have become a trend, a must have. Therefore demand for certification can only grow.

6. Do you have a business philosophy that guides you in your work?
At IGI the philosophy is to serve the industry as best we can, with accuracy, speed and adequate products. Today our customers depend and rely on our expertise and we need to be there for them.

7. What do you consider to be your greatest professional accomplishment?
I would say it would be when my partners and I decided long before the other major labs that we needed to be present in the developing countries. Since 1997 we have opened 18 labs worldwide.

8. What is the toughest professional challenge that you have faced?
When long ago, I had to tell consumers the stones they bought were not diamonds. Luckily today consumers are more informed and it rarely happens.

9. What has been the most notable change in the diamond and jewelry industry over the course of your career?
I cannot talk about just one, there are so many. In the eighties it was probably large chain stores starting to compete with mama & papa retailers. Since the beginning of this century, another notable change has been the rise of the developing countries such as India and China. Internet has changed a lot as well; also by allowing consumers to buy products on the internet, but mainly by providing the consumer with information he had no access to before. It means the consumer is much better informed today and as a result the jeweler has to become more professional. One of the consequences is that there is a much wider use of certification in order to provide the consumer with a maximum of confidence. In the last ten years we have also seen a drastic increase of students in our classes.

10. What role does innovation play in ensuring that your company remains relevant?
With all the challenges such as synthetic diamonds, hpht, imitations and so on, research and development are playing a key role today in order for us to help our customers by providing them with reliable and accurate results.


Thursday, June 27, 2013

Surat Diamond Association asks diamantaires to start dollar dealings

Surat Diamond Association (SDA) on Thursday appealed to small and medium diamantaires to deal in dollar for purchase and sale of rough and polished diamonds after the rupee slid to an all-time low of Rs 60.72 against dollar.

Around 40 per cent of all transactions in the diamond markets, mainly by the small and medium diamantaires, who don't have access to bank credit facilities, are done in rupee value. The small diamantaires import rough diamonds from Antwerp on 90-120 day credit and pay in rupee value.
The imported goods are processed and sold in the market and the payment is received in the rupee value.
If a small diamantaire had bought $1,000 worth of rough diamonds in April on 90-day credit for Rs 54,000 when the rupee was trading at Rs 54 against the dollar, in June would have to pay Rs 61,000. This is because the rupee now was trading at Rs 61 against the dollar.
The SDA office-bearers said all the transactions, be it in polished or rough diamond buying and selling, should be in dollar value. This will hedge the small and medium diamantaires against the devaluating rupee.
Dinesh Navadia, president, SDA, said, "I do not think that the rupee would recover fast against the dollar. In such circumstances, we have appealed the small and medium diamond manufacturers and traders to go for dollar dealings."
Surat: Surat Diamond Association (SDA) on Thursday appealed to small and medium diamantaires to deal in dollar for purchase and sale of rough and polished diamonds after the rupee slid to an all-time low of Rs 60.72 against dollar.
Around 40 per cent of all transactions in the diamond markets, mainly by the small and medium diamantaires, who don't have access to bank credit facilities, are done in rupee value. The small diamantaires import rough diamonds from Antwerp on 90-120 day credit and pay in rupee value.
The imported goods are processed and sold in the market and the payment is received in the rupee value.
If a small diamantaire had bought $1,000 worth of rough diamonds in April on 90-day credit for Rs 54,000 when the rupee was trading at Rs 54 against the dollar, in June would have to pay Rs 61,000. This is because the rupee now was trading at Rs 61 against the dollar.
The SDA office-bearers said all the transactions, be it in polished or rough diamond buying and selling, should be in dollar value. This will hedge the small and medium diamantaires against the devaluating rupee.
Dinesh Navadia, president, SDA, said, "I do not think that the rupee would recover fast against the dollar. In such circumstances, we have appealed the small and medium diamond manufacturers and traders to go for dollar dealings."

Wednesday, June 26, 2013

Gem Diamonds Recovers 100-Ct. Diamond at Letšeng

Gem Diamonds recovered a 100 carat white, type IIa diamond from the Letšeng mine in Lesotho.  Clifford Elphick, Gem Diamonds' CEO, reported that the company has recovered three diamonds weighing more than 100 carats at Letšeng in the past two months.

During May, the company recovered a 164-carat, D type IIa diamond that sold for $9 million into a partnership arrangement and a 103-carat yellow diamond that was sold at the company's tender.

Gem Diamonds reported that revenue from Letšeng's June production achieved a total of $22 million, or an average price of $2,087 per carat, compared with an average price of $1,599 per carat achieved at the first three tenders of the year.

The company added that four new secondary and tertiary crushers have been successfully installed at Letšeng on schedule and on budget and are operational. Mining has commenced as planned in the higher value, higher grade satellite pipe, which should result in improved revenue as the build-up of satellite pipe ore contributes to overall production for the remainder of 2013, the company explained.

In Botswana, progress is being made at the company's Ghaghoo mine. The sand portion of the access decline is complete while the recovery plant is 90 percent complete. Tunneling has begun through the more competent basalt rock. Phase 1 will see the first kimberlite ore accessed in mid-2014, allowing the company to achieve its planned production of 230,000 carats per year.


Selling diamonds and buying more gold

“The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost.” — Ben Bernanke 2002
“With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.” — Ben Bernanke 2005
“I’ve never been on Wall Street. And I care about Wall Street for one reason and one reason only because what happens on Wall Street matters to Main Street.” — Ben Bernanke 2008
We know that the banks have rigged/manipulated the markets in:
  • Derivatives
  • AIG
  • TARP
  • Energy
  • Rehypothecation
  • Treasurys
  • Fannie Mae
  • Freddie Mac
  • Dot-com bubble
  • MF Global
  • Mortgage documents
  • HAMP
  • High-Frequency Trading
  • Foreclosure Reviews
Have you ever noticed that despite the banks and their enablers’ best efforts, that these scams and riggings always blow up at some point anyway? Turns out that the market forces and the balances of supply/demand and free choice always work their way back in at some point.
If you’re a giant too-big-too-fail bank and:
  • you’re the custodian of the biggest gold and silver exchange-traded funds
  • you’re also trading derivatives on interest rates, mortgages and gold and silver,
  • you’re holding less real physical bullion than you have in years
  • you’ve been short and have been advising your clients to get short gold and silver
  • you’re in cahoots with the Fed and the government desperately trying to keep the dollar propped up and rates down
  • you can borrow money at 0% interest and never have to worry about paying it back if you blow it up gambling/trading/rigging the markets because you’ll get bailed out
  • you know that you don’t even have to pay back the bailout money
  • you don’t ever have to worry about going to jail for anything you do as an executive or bigwig at any giant bank…
Would you be tempted to corrupt the markets too? My point here is that the silver and gold markets and the moves behind the scenes going on between the paper and the bullion markets and the increasing disparity between the price people have to pay for physical gold and silver versus what these banks and their enablers are saying the paper and spot prices are is indicative of a market about to come back into balance. And our analysis points to that balance being that the relative value in the market of gold and silver right now is much higher versus the dollar than the banks are pretending it is.
Gold and silver markets are much smaller than the total stock market which is much smaller than the total bond market which is much smaller than the total derivatives market. Meaning that gold and silver are probably some of the easiest to try to manipulate right now. I don’t know how long these imbalances between the dollar and precious metals can go on and it can get worse before it gets better — these banks and their regulators and the government are desperate and willing to take us all the way to the ledge. I’m going to double the size of my Market Vectors Gold Miners ETF GDX call position that I started building yesterday. I still have ammo to build it up further if the gold miner stocks decline further in the next day or so.
But as I’ve been saying for the last couple months, I have started rebuilding my own physical gold and silver assets and plan to do so steadily over the next year or so. I am trying to continue to take advantage of the continued declines in gold and silver by buying more gold and silver coins and bullion. But you have to be patient and willing to find the right seller because, as I said above, most people are paying a bigger spread for those coins and bullion over the paper/spot prices than ever before.
Meanwhile, we’re now up nearly 50% on our recent DIA calls purchase. I’m going to sell about fifth of my SPDR Dow Jones Industrial Average ETF DIA (also known as diamonds) calls this morning locking in some of those profits.

Tuesday, June 25, 2013

Is Gold Price Trying to Tell Us Another 2008 Crisis is Lurking in the Shadows?

This monthly gold chart is drawn on the logarithmic scale in order to remove some of the melodrama to the latest correction. Linear charts emphasize nominal price movement while a log chart emphasizes the percentage movement. By reviewing gold’s latest correction on a percentage basis, we can put things into a little bit better perspective. The 2008 correction was 26%; the current correct thus far has been 30%. In short, we’ve been here before though you wouldn’t know it from all the catterwauling at our favorite financial cable network and other media outlets (not to mention Wall Street itself). Granted we might not, as yet, have reached bottom, but then again, we could be close.

In preparing this chart, I couldn’t help but look for similarities between 2008 and the present. Although nothing has surfaced that should make us think another Lehman Brothers event might be in progress, it is difficult not to wonder if Marc Faber might be on to something
Why, for instance, has the Fed stepped up its asset purchase program since the beginning of the year while simultaneously talking asset purchases down? We see the numbers but we don’t know exactly what is prompting the strange behavior.
This from Chris Martenson (Peak Prosperity) might end up being viewed months from now as early warning to a pending crisis:
“The early stage of any liquidity crisis is a mad dash for cash, especially by all of the leveraged speculators. Anything that can be sold is sold. As I scan the various markets, all I can find is selling. Stocks, commodities, and equities are all being shed at a rapid pace, and that’s the first clue that we are not experiencing sector rotation or other artful portfolio-dodging designed to move out of one asset class into another (say, from equities into bonds). . .
“[W]e look at the increasing number of flashing indicators warning that a 2008-style - but worse - sell-off is arriving. We say ‘worse’ because this time it looks like it will be accompanied by a vicious cycle of rising interest rates. Plus, governments and central banks have used up all of their major options already. There are no more white knights to hope for.”

Marc Faber: Gold a possible canary in the deflation coal mine

“’Maybe gold is signaling a deflationary collapse of all asset prices. If this were indeed the case I suppose I would rather own gold than government bonds, high yield bonds and equities. If this scenario were to pass it would lead to even more money printing around the world,’ says Faber, who was talking about asset price deflation and gold back in March.”
“Credit Suisse, meanwhile, said gold investors maybe should be ratcheting down their expectations, or at least taking a harder look at them. Gold could get back to levels seen before the crisis, around $1,100 or $1,500 an ounce, Tom Kendall, head of precious markets research told CNBC. That’s because many of the so-called fear factors driving gold higher - such as inflation - have been removed from markets.”
MK note: For a good many years now, I have shied away from getting trapped in the debate about extreme economic outcomes, i.e., hyperinflation and hyperdeflation - though Faber is talking about asset deflation, a far different animal than monetary deflation. The problem with Kendall’s analysis is that it is built on a false premise. Gold was never driven higher by inflationary fears during the course of this bull market. From 2002 on, the real main driver has been the safety of the banks and financial markets along with a possible collapse of the international monetary order. People like Kendall are usually surprised by the huge surges in demand as the gold price falls simply because they fail to understand the real reason for the demand in the first place.
Along these lines, we have experienced another demand surge at our offices since mid-last week. Many clients have cited concerns about the stock and bond markets as the reason for their renewed interest in gold, a crossover sentiment that bolsters Faber’s argument. Press reports out of Asia tell a similar story. Faber is much closer to the truth than Kendall because he understands why people buy gold in the first place. Gold as “the last man standing” remains one of the strongest arguments in its favor - the asset of last resort and for the final reckoning.

Source: marketoracle

De Beers Introduces DB Classic Trio Ring

De Beers Diamond Jewellers introduced the DB Classic Trio ring, adding a new style to its expanding bridal collection. In this design, the three diamonds are central to  the classic ring and reflect life’s perfect equilibrium, according to the company. The DB Classic Trio ring represents perfect balance and harmony of a woman’s life and her natural beauty through three key elements: mind, body and soulde beers.
The DB Classic Trio ring is hand-crafted and set in platinum. Diamonds are available in  a variety of carat weight combinations and cuts.
Each piece of De Beers jewelry is certified with a De Beers passport and each polished diamond above 0.20 carats is microscopically branded with the De Beers Marque, guaranteeing a natural, untreated, conflict-free and responsibly sourced stone.
De Beers Diamond Jewellers was established in 2001 as an independently managed and operated company by LVMH.

Monday, June 24, 2013

Buyers fail to take a shine to Rio Tinto’s diamonds arm

Diamonds are forever for mining giant Rio Tinto, which today scrapped plans to sell or float its  $2 billion (£1.3 billion)  precious stones division.

The world’s third-biggest miner had been looking to offload its diamonds business as part of plans to trim its $19 billion net debts, and boost returns to shareholders. Chief executive Sam Walsh had promised investors “significant cash proceeds” from asset sales, and Rio said in March that it was “reviewing whether we can create more value through a different ownership structure” of its diamonds business.
But today the miner’s diamonds and minerals chief executive Alan Davies admitted no deal had emerged. “After considering a number of alternative strategic ownership options, it is clear the best path to generate maximum value for our shareholders is to retain these businesses,” he said.
“The medium to long-term market fundamentals for diamonds remains robust, fuelled by growing demand for luxury goods in Asia and continuing strong demand in North America.  We have valuable, high-quality diamonds businesses that are well-positioned to capitalise on the positive market outlook.” Rio Tinto produces about 12 per cent of the world’s diamonds, from mines including Argyle in Western Australia,  which is the largest source of rare pink diamonds.
Rivals have also failed to seal deals as commodity prices languish. African Barrick Gold could not complete a stake sale to China National Gold in January, and Brazil’s Vale gave up its attempt to sell Australian mines. But rival BHP Billiton successfully sold its diamonds unit to Harry Winston, now called Dominion Diamond, last November.
While BHP has racked up more than $4.6 billion in asset sales in the past year, Rio has only managed to sell its Eagle nickel mine for $325 million.

Sunday, June 23, 2013

India's May Polished Exports +43%

India’s polished diamond exports rose 43 percent year on year to $1.78 billion in May ‎‎2013, according to the Gem & Jewellery Export Promotion Council (GJEPC). By ‎volume, exports grew 27 percent to 3.262 million carats. ‎

Polished imports more than tripled to $536.98 million during the month. India’s net ‎polished exports, representing the excess of exports over imports, rose 19 percent to $1.243 ‎billion.‎

India’s rough diamond imports increased 45 percent to $1.640 billion in May, while rough ‎exports grew 15 percent to $134.56 million. Net rough imports, or the excess of ‎imports over exports, rose 48 percent to $1.506 billion.‎

India’s April net diamond account, which is calculated as the total of polished and ‎rough exports less total imports, fell to a deficit of $263.1 million, from a surplus of $29.1 million one year ago.‎

During the first five months of the year, India’s polished exports rose 19 percent to $9.481 billion, while ‎polished imports grew 5 percent to $3.132 billion, according to Rapaport News calculations. Rough imports increased 10 percent to ‎‎$7.282 billion and rough exports rose 27 percent to $920.6 million.‎

India’s net diamond account improved to a deficit of $13.24 million from a ‎deficit of $918 million one year earlier. ‎

Thursday, June 20, 2013

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Amazon diamonds smuggled from Venezuela to Guyana flout Kimberley rules

A small boat travels downriver deep in the Venezuelan Amazon, where the jungle straddles the country’s border with Brazil.
In it are three gold and diamond buyers, armed with weighing scales, magnifying glasses and rucksacks stuffed with cash. They stop off every few minutes at many of the illegal mines that line the river and scar the jungle.
Mining diamonds in Venezuela
20/06/2013 - International report
Mining diamonds in Venezuela
At one mine, half a dozen men squat in waist-high water in a 40m wide pit. They pick through the mud in soaked and dirty rags.
Despite appearances, this is a prosperous business. Standing at the edge of the pit, Jesús López, 45, says that he earns $2,000 in an average week.
"I make this sacrifice for my children,” he says.
In Santa Elena, the nearest town to these mines, one buyer, with a gun in his holster and a desk littered with gems, explains the illegal business.
The diamonds he purchases will probably end up in trading centres such as Tel Aviv, Antwerp, London and New York after being smuggled into neighbouring Guyana for the obtention of falsified papers.
The route flouts the Kimberley Process, an international pact agreed in 2003 to curtail the diamond smuggling that was fuelling civil wars in Africa - the trade in so-called "blood diamonds."

Wednesday, June 19, 2013

Millions of dollars paid by diamond miners in Zimbabwe vanish

Millions of dollars paid by diamond miners in Zimbabwe vanish President Robert Mugabe
Revenues from the high mining taxes Zimbabwe charges to miners —particularly to diamond producers— are nowhere to be found, said Wednesday a cross–party mines and energy portfolio parliamentary committee.
As reported by The Telegraph, the team found "serious discrepancies" between what diamond companies claimed to have paid in local taxes, and what the government said it had received.
When attempting to visit the country’s Marange fields, estimated to hold more than 25% of the world's diamond stocks, committee members said government officials and security agents repeatedly prevented them from accessing the area.
The group report, not the first one to suggest mining taxes in Zimbabwe are going to private pockets, fuels international fears that mining royalties are actively financing Robert Mugabe’s Zanu PF party campaign and intimidation of voters during the forthcoming elections.
“Over the last decade, elections in Zimbabwe have been associated with the brutal intimidation of voters. Orchestrating this kind of violence costs a lot of money. As the country approaches another election there is a very high risk of Zanu PF hardliners employing these tactics once more and using Marange diamonds to foot the bill. The Kimberley Process’s refusal to confront this reality is an outrage,” said in late 2011 Charmian Gooch, a Founding Director of Global Witness, when explaining the reasons he was quitting the Kimberly Process.
“It has become an accomplice to diamond laundering – whereby dirty diamonds are mixed in with clean gems. In a shocking move, the Kimberley Process recently authorised exports from two companies operating in the controversial Marange diamond fields in Zimbabwe. The Zimbabwean army seized control of the area in 2008, killing around 200 miners.
"Mining concessions were then granted in legally questionable circumstances to several companies, some of them associated with senior figures in Robert Mugabe’s Zanu PF party. Newspapers have reported that the Zimbabwean Central Intelligence Organisation, the state security service aligned with Mugabe whose members are accused of committing acts of violence against opposition supporters, directly benefits from off-budget diamond revenues.
“Over the last decade, elections in Zimbabwe have been associated with the brutal intimidation of voters. Orchestrating this kind of violence costs a lot of money. As the country approaches another election there is a very high risk of Zanu PF hardliners employing these tactics once more and using Marange diamonds to foot the bill. The Kimberley Process’s refusal to confront this reality is an outrage,” said Gooch in his official statement.
Last year, Zimbabwe’s Deputy Mines Minister, Gift Chimanikire, confirmed an army-owned company holds a 40% stake on Anjin, one of the most lucrative diamond concessions in the country.
Days later it was reported that a Chinese diamond mogul have ploughed $100 million into the African country’s Central Intelligence Organisation (CIO) to fund covert operations against the opposition.
Zimbabwe's diamond production from Marange increased from 8,7 million carats in 2011 to 12 million carats last year. This year, production is expected to rise further reaching over 17 million carats.

Tuesday, June 18, 2013

Donna Baker Resigns From GIA

The industry expressed shock and puzzlement after the Gemological Institute of America announced that Donna M. Baker, its longtime president and CEO, had abruptly resigned “due to differing views on the direction of GIA.”
GIA spokesman Stephen Morisseau declined to comment on how the board of governors’ vision differed from Baker’s.
Even people inside GIA, where Baker has been generally seen as a popular and successful chief executive, told JCK the announcement was unexpected and mystifying.
GIA board members privately praised Baker’s performance and business acumen, but declined to provide more details.
The departure of Baker, who headed the institute for seven years and appeared at last week’s JCK Las Vegas show, was so sudden that she didn’t even say goodbye to the staff. Her resignation was instead announced by current board of governors chair Susan M. Jacques, president and CEO of Borsheims, who has stepped in immediately as GIA’s interim president and CEO.
Jacques, currently based in Omaha, Neb., will be “spending a significant amount of time” in Carlsbad, Calif., during her interim stint, Morisseau says.
The organization is now conducting a search for a permanent replacement, but gave no timetable for when it will be completed.
“I am sure many of you will have concerns or questions,” Jacques’ email to GIA staff stated. “Please discuss them with your manager, bearing in mind that they may have the same concerns and questions.”
“Any change in senior management is difficult,” it continued. “I ask that everyone focus on their responsibilities and on providing the best service we can to our laboratory clients, students, stakeholders and the public. “
Baker, a lawyer and former nun with a master's degree in business, joined GIA in 2001 as vice president and general counsel. She was appointed president in 2006 after the resignation of longtime head William E. Boyajian. She was the first woman to head the organization. In 2008, she was also named CEO.
Among Baker’s achievements has been spearheading the GIA lab’s international expansion.
Tom Moses, senior vice president of laboratory and research, will still oversee GIA’s lab operations. Bev Hori, vice president of education and chief learning officer, will lead GIA’s gemological and industry education efforts.
The statement said that “no other management changes are planned.”

Angola: Endiama Celebrates 100 Years Since First Diamonds Discovery

The state-owned National Diamonds Company (ENDIAMA) will organise on 20-21 June, in Luanda, an international conference to mark 100 years since the discovery of the first diamonds in Angola.
The event has the objective to present to participants the national diamonds potentials, attract investments, reflect on the past and present, as well as put the coming future into perspective.
For two days, the event will discuss issues related to the diamonds industry and jewellery, prospecting, research, production, trade, polishing and the international market prices of diamonds.
Divided in three sessions, the conference will have as main speakers the South African minister of Mineral Resources, Susan Shabangu, the Mining ministers of Zimbabwe and D.R Congo, respectively Obert Moses M'pofu and Martin Kabwelulu Labilo, and the chairman of the Kimberley process, Welile Nhlapo.

ANGOP has learnt that there will be also interventions from the chairpersons of the World Diamonds Council, Industrial Association of Diamonds, Shanghai Stock Exchange, Dubai Stock Exchange, and Diamonds Bank of Antwerp, respectively Eli Izhakoff, Maxim Shkadov , Qiang Lin, Peter Meeus e Pierre De Bosscher.
During the meeting, the Angolan ministers of Economy and Geology and Mining, Abrahão Gourgel and Francisco Queiróz respectively, as well as the governors of the north-eastern Lunda Norte Province, Ernesto Muangala, and the eastern Lunda Sul Province, Cândida Narciso, who are to present their communications on the minerals potential of their respective regions.
The event is to be attended by 700 national participants linked to various sub-sectors of the diamonds area and other minerals, as well as 100 international personalities.
Meanwhile, on June 20 there will be the signing of an agreement between Endiama and the Russian Alrosa company. The agreement will enable the implementation of a research work that will help to find out with accuracy which kimberlites gave origin to the Angolan diamonds.
In Angola, the diamonds production in 2012 reached eight million carats which enabled to yield a revenue of about 10 billion Kwanzas. Last year, the country was also the world's fourth greatest producer of diamonds and second in Africa, after Botswana.

Monday, June 17, 2013

DCLA IDC Proportion grading system.

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De Beers June Sight Estimate at $540M

The De Beers June sight had an estimated value of $540 million and signaled cautious cutting center sentiment as the recent rupee depreciation has weighed on the Indian market and overall liquidity.

“We felt that sentiment had improved going into the sight following the JCK Las Vegas show,” said Nigel Simson, head of beneficiation at De Beers. “But then the rupee dropped at the start of the sight, which presented further liquidity challenges to sightholders.”

The rupee hit a record low of INR 58.98 against the dollar on Tuesday of sight week (June 11) before recovering slightly to trade at INR 57.9 this week, representing a decline of 6 percent from the beginning of the year. Investors continue to worry about the country’s widening current account deficit and the Reserve Bank of India today warned of an upward risk of inflation due to the depreciated currency.

While a weaker rupee is favorable for exporters, one India-based sightholder noted that the weak currency mainly affects diamond manufacturers of small goods as India remains the largest market for these diamonds. He added that jewelers are currently hedged against the weak rupee as they are sitting with existing inventory and can try to sell at a higher price whereas diamond manufacturers still have to buy their rough supply at the higher new rate. “When you buy the goods in dollars, it has become a lot more in rupee terms,” he added.

Feedback from the sight indicated that De Beers maintained stable prices on average in June with minor adjustments both up and down on certain goods.  Assortments were adjusted from the May sight, which included a larger proportion of higher quality Canadian goods, to a more regular mix of goods in June.

One sightholder said that in order to ease sightholder profitability concerns, he would like to see consistent prices and assortments from the mining company.

Most sight participants who spoke with Rapaport News suggested that there was a cautious mood at the sight as sightholders continue to struggle with profitability from their rough supply. On average, rough from primary sources continues to trade on the secondary market at around cost. Similarly, profit margins from manufacturing remain slim.

“No one is increasing manufacturing at the moment, and in fact, most manufacturers are looking to trade more polished because there are no margins in manufacturing,” one sightholder said. “There’s less rough availability and it’s become so expensive that people are downsizing. It’s frustrating and people are not interested anymore.”

Varda Shine, De Beers executive president of global sightholder sales, told Rapaport News recently that De Beers rough prices have increased by mid- to high-single digit percentages since the beginning of 2013. She added that certain categories of rough have seen double digit percentage growth so far this year.

According to Rapaport estimates, De Beers rough sales at its sights fell 6 percent year on year to $2.89 billion during the first half of 2013, consisting of the first five sights of the year.  Anglo American is scheduled to release its financial statements for the period on July 26.

Sunday, June 16, 2013

Indians Buying Marange Goods Due to High Rough, Low Rupee

Owners of some small and medium-size diamond factories in Surat in India are eyeing diamonds from the controversial Marange diamond deposits in Zimbabwe due to the reduced prices of the goods.
The diamonds are even more attractive to them due to the weakness of the rupee against the dollar which has raised prices of rough and reduced retail demand in India, according to a report in The Times of India.

Diamond mining companies in Marange have been selling their rough diamonds at a 25 percent discount due to difficulties associated with marketing them due to US sanctions imposed by the US for alleged human rights abuses, the report said.

Zimbabwe's Parliamentary Portfolio Committee (PPC) on Mines and Energy has submitted a report stating that the diamond mining companies operating in Marange are selling their rough diamonds at 25 percent less than world market prices, the paper cited industry sources as saying.

The parliamentary report said the rough diamonds are being sold through "unconventional means" because major international banks, insurance companies and couriers do not want to be associated with Marange diamonds as a result of the US sanctions.

"Zimbabwe's cheap diamonds are attracting Indian diamantaires, especially small and medium buyers," said a Gems and Jewellery Export Promotion Council (GJEPC) official. "They bring the diamonds to India paying cash in order to keep their factories running."

Meanwhile, Rakesh Patel, a diamond dealer in Mahidharpura diamond market, said, "The industry is not in a position to buy rough diamonds sold by mining companies like DTC and Alrosa as the value of rupee has depreciated against the dollar. Zimbabwe diamonds have become the cheapest option now."

GJEPC leaders said companies operating in Marange in Zimbabwe are KP-compliant and thus the diamantaires face no technical difficulties in bringing the diamonds to India.

"Diamantaires will go wherever they get cheap diamonds. If Zimbabwe is offering diamonds cheaper by 25 percent, we do not have anything to lose," Surat Diamond Association President Dinesh Navadia 


Thursday, June 13, 2013

Labs Grade Diamonds, But Who Grades the Labs?

JCK sent a single diamond to a quartet of industry labs to gauge their consistency (or lack thereof). The results were surprising—provoking a look into how the trade views the inherently subjective process of certification.

Labs Grade Diamonds, But Who Grades the Labs?
Bloomberg/Getty Images
In 1955, the Gemological Institute of America’s lab issued the first diamond grading report, meant to serve as a third-party verifier that would increase public confidence in the diamond industry. Yet in the years since, not everyone has maintained confidence in the system of grading labs and reports.
While there are still many respected diamond-grading labs, others have earned reputations for being overly generous in their evaluations. (And even within that subgroup, there are those with ­reputations for being somewhat generous, and others—one overseas lab, in particular—with a ­reputation for being really generous.) Within the gem trade, talk abounds of varying lab standards; ­sometimes a branch of one lab will be considered looser than another branch.
“The problem is as bad as I’ve ever seen it, and it’s not getting better,” complains Donald A. Palmieri, president of the Gem Certification and Assurance Laboratory (GCAL), a New York City–based lab.
Courtesy of GIA
A GIA diamond grader at work
Palmieri, a frequent critic of his competitors, says he’s regularly asked by dealers to evaluate diamonds a ­certain way to win their patronage. He doesn’t take them up on it, but he believes that other labs do. “There are a lot of labs out there that do what they have to do to get business,” he says.
Mark Moeller, president of R.F. Moeller jeweler, a three-store chain based in Minneapolis, says, “Diamond grading is all over the map these days and it’s across-the-board.
Courtesy of GIA
A closeup of a 1.09 ct. round brilliant-cut diamond
“Everyone is fighting over what the standard is,” he says. “How can you be consistent with so many labs? The labs are just reacting to their customers by being more lenient. It’s become a standing joke in the industry: If you don’t like the grade, shave a point off and resubmit it.”
The issue is so top of mind for members of the diamond trade that Rapaport Corp. chairman Martin Rapaport has held three annual forums on diamond certification at the JCK Las Vegas show; a fourth is scheduled to take place at this year’s fair, on Sunday, June 2. At the first forum, a ­jeweler asked attendees what she should do when a customer comes in with a report from a lab she considers overly lenient in its grading. She explained her conundrum by saying that she hates to bash the competition, but also feels the person isn’t getting exactly what they expect. No one knew how to answer her.
Moeller says he grappled with this problem for some time. Eventually, he figured, “If you can’t beat ’em, join ’em.” Tired of seeing his competitor win customers with reports from a lab that he feels “grades to a more lenient standard,” he started carrying reports from that lab as well.
“We were losing a lot of sales,” he says. “And we only do it if everything has truly failed and the customer is really just a price-shopper. So we are honest: We explain to the customer that this grading is more lenient. And usually they don’t care. If they want a 2 carat with an $18,000 budget, am I supposed to send them walking?”
As an example, Moeller sent JCK two reports for the same 2 ct. stone: The report from AGS calls the diamond a K VS1—about $11,200 on Rapaport. The other report, from the “lenient lab,” calls it a J VVS2—about $14,000 on Rap. Stones with reports from the lenient lab, however, carry as much as a 30 percent discount compared with stones with reports from more respected labs, leading consumers to feel they are getting a J VVS2 for a K VS1 price.
Part of the problem is that diamond grading, by its nature, is subjective. Sometimes even graders within the same lab will disagree about a call. And with more stones getting reports, and labs getting larger and opening more international branches, it can be hard to maintain standards worldwide. (And some worry that inconsistent standards could spread to the other important task labs perform: screening treatments and synthetics.)
To determine just how much consistency there is among the industry’s varying reports, JCK had a New York City dealer send the same diamond to a number of leading labs. (See chart.) Unlike a similar experiment JCK conducted in the mid-1990s—when a diamond received three different grades from three different labs—the stone received virtually the same grade from all four labs. Only one lab graded the color higher, but that variation was within the generally accepted one-grade tolerance. (And the dealer, naturally, said he agreed with the higher grade.)
JCK sent a round brilliant diamond in the 0.6 ct.–0.7 ct. range to four leading labs. Here are their grades:
International Gemological InstituteFVS2Excellent, excellent
AGS LaboratoriesFVS20 cut grade
Gemological Institute of AmericaFVS2Excellent cut grade
While this is mostly an intratrade concern, it also has attracted intermittent attention from the consumer media. A 2005 episode of Dateline NBC had a reporter buy from a leading retailer a diamond that was described as flawless. When it was graded, it was found to be of a much lower clarity. The report also found wider disparities in lab grading than JCK did—with one diamond receiving multiple grades from the same organization.
Given the importance of labs to the industry, how can the industry ensure that the evaluators be more consistent—and accurate? There are several schools of thoughts on this:

Grade the diamonds by machine.

Courtesy of IGI
Step up to the mic! An instructor guides IGI School of Gemology students through the grading process.
Machines that automatically grade color—and to a lesser extent clarity—do exist, and many labs use them. International Gemological Institute president and CEO Jerry ­Ehrenwald predicted at the 2011 Rapaport forum in Las Vegas that “within the next decade, we will have machines that can grade color and clarity. And, eventually, that will wipe out all the labs.” (Ehrenwald and others, however, note that grading labs will still be needed to detect treated stones and synthetics.)
The Forevermark is going this route. Stephen Lussier, CEO of the De Beers brand, which is bucking convention by grading its own diamonds, says that it regularly uses machines in its color evaluations.
“The machine is currently our most reliable color grader,” he says. “One of the things we have learned is that even the best human will only be right eight out of 10 times when color grading. The eyes can’t see things the whole day; that is why you need multiple opinions.”
He says the company also is working on a device that will grade clarity. “Consistency is most important for us,” he adds. “Grading is part science, part art. You will never completely eliminate humans. But we are focused on technology because humans are not infallible.”
GIA also uses a proprietary device “to some extent” in its color grading, says spokesman Stephen Morriseau.
American Gem Society lab executive director Peter Yantzer says his lab used a color-grading device for a while, but found it became less consistent with use. But he thinks another possible answer is for all graded diamonds to be ­photographed, along with a master set of color grades. A computer or similar program then could match the diamond pictures to the master set.

Enlist an independent organization to evaluate and certify the labs.

Associations that evaluate and certify labs do exist and regularly evaluate labs that look at things like food preparation and crime scenes. They are, in a sense, third-party verifiers for the third-party verifiers. But few in our industry take advantage of them. (One exception is GCAL, which is certified by an organization called the Laboratory Accreditation Bureau.)
There is also the International Standards ­Organization, which has evaluated a number of industry labs, including IGI, HRD Antwerp, and GCAL. The Tiffany Gemological Laboratory, which the retailer uses to grade its own gems, also conforms to ISO standards.

Let the public know how the market views different reports.

In many ways, the diamond market already has developed a market-based solution: within the industry, certain “certs” are worth less than others. For instance, the RapNet listing service found that certain reports carried as much as a 30 percent price differential. publishes a similar evaluation on its site.
Yantzer has called for these indexes to be made public to consumers; that is how it’s done in coin grading, he explains: “All you have to do is go to the online indexes and look at their prices. The ­industry adjusts those prices based on the ­consistency and quality of the grading of the lab. That is how the industry ­handles inaccurate ­grading. But ­consumers don’t know this. And retailers tell them all labs are created equal.
“This information needs to be published where consumers can get access to it,” Yantzer  says. “Sure, many consumers wouldn’t care. But some of them would.”

Ensure that the labs offer guarantees.

Palmieri believes that one solution is for labs to guarantee their grades, as his does, with a “zero tolerance” guarantee. When GCAL was owned by ­publicly listed Collector’s Universe, it guaranteed its findings within the standard one-grade tolerance. Now the lab is no longer associated with that company and it doesn’t even allow itself the one-grade tolerance. “Why shouldn’t a lab have to stand behind its grades?” Palmieri asks. “That’s what a retailer has to do.” (He admits that while there are some stones that can be called “borderline,” that doesn’t happen often and they can be marked as such.)
Yantzer says his lab is considering a similar guarantee. “I think it’s possible to create a true certificate,” he says, though his idea includes a one-grade tolerance. The question for him would be who would determine the ultimate accuracy of the grade. “You would have to have some group of ­long-term graders,” he says.

Get industry associations to crack down.

At his forum, Rapaport urged the industry to police labs that are regularly more than one grade off. “We need to say, if you are two colors off, that is not acceptable,” he says. And he speaks for many in the industry when he says that the industry needs to seriously look at what is being produced by its labs. “Right now,” he says, “there is no red line.”

The Diamond Lab System Is Broken. How Do We Fix It?

The issue of variable lab diamond grading standards has been around for a while, but it seems to be dominating trade chatter in a way that it hasn’t before. Undoubtedly, there are some good labs out there. But the problem is most consumers don’t know the good graders from the lenient ones. And the whole system of labs, meant to raise standards in the trade, now seems to be aiding and abetting misrepresentation as much as preventing it.
 rbates's picture
So the question is: What should we do about it? We covered some possible solutions in our June story. The recent Rapaport conference offered a few more, which I would like to review. 
Martin Rapaport—who, we should note, is looking into launching his own lab—believes this is an opportunity for jewelers to use their expertise to differentiate themselves and win customers. And so we see retailers like Dan Gordon using blogs to explain their opinions on different labs.
There is merit to this. But lately we have seen a lot of well-respected jewelers—people who have the reps and expertise—selling diamonds with reports from "lenient" labs, simply because their competitors carry them, and they feel they have no choice. So at this point, the situation may be a little too far gone for even the best retailers.
The other oft-mentioned solution by Rapaport is a class action lawsuit. Simply sue the worst offenders out of business, and the rest of the trade will pay attention. Yet it’s possible that some of the targeted entities may be overseas—and of course, the consumer confidence aspects of that would be disastrous.
Other solutions include having an outside group judge industry graders—and there are organizations dedicated to doing just that, such as the International Standards Organization and the Laboratory Accreditation Bureau, which looks at food and crime labs. This makes sense; the whole point of having labs is that jewelers and dealers can’t be trusted to grade their own diamonds. So why should an organization, or business owner, be allowed to grade their own lab? In the past, certain groups have said they don’t need to be judged by outsiders, as we have the reputation and stature. That doesn't cut it anymore. Every lab in our business should be subject to independent review.
My feeling has always been that, down the road, grading needs to be mechanized—meaning the grading needs to be done mostly by machines, with some quality control by humans. After all, you can’t bribe a device. They don’t—or shouldn’t—get tired after grading too many stones. And if they are programmed properly, they will give you consistent results, and really that’s what grading needs most: consistency. 
Right now, we have things we call “certificates.” But we all know they don’t really certify anything. That’s because diamond grades are subjective. We need a way to make grading more objective—and consistent. At the Rapaport seminar, moderator Saville Stern noted that two of the test stones had been graded previously by GIA. When re-submitted, they received different grades—showing that even a lab which operates with the best of intentions doesn’t always generate repeatable results.
Both De Beers and to some extent GIA use proprietary devices in their color grading; given that consumer confidence is important to both organizations, perhaps it’s time to make those machines available to the industry at large. The idea that someone’s opinion—or even the best of three opinions—can mean a thousand- or even-million dollar difference in the value of a stone seems pretty outdated in this day and age. (This, of course, may cost people jobs. But good gemologists will always be needed for quality control and to spot things like treatments and synthetics.)
Granted, a reliable, widely-embraced clarity-grading machine will prove a little tougher to develop than a color-grading one. But I don’t think it’s impossible (De Beers has one in development). And even if only color grading gets mechanized, that will be a huge improvement, as color seems to bring the most grading variations, and lenient labs will only have clarity to “play” with.
With the exception of cut, the current system for grading and evaluating diamonds was developed in the early 1950s. Perhaps, 60 years later, it’s time to modernize it, and figure out a system that truly serves the consumer and honest people in the industry. The current situation of “good” and “bad” labs is embarrassing and will ultimately damage our business. If we’re lucky, however, it will lead to a period of innovation and fresh thinking in the grading sector.

Source: jckonline

Diamond industry hits a rough patch

Dimanataires in world's biggest diamond cutting and polishing centre in Surat, especially the small and medium unit owners, have stopped the import of rough diamonds rupee plunging to a record low against the US dollar.

Merchants in Surat and Mumbai are not willing to take the delivery of the rough diamond consignments bound to India from Antwerp, Dubai and other African countries.

Sources said the industry is already facing severe liquidity crisis and cash flows are further impacted significantly as the diamond companies, especially the small and mid-sized companies have to pay at the current rupee depreciated rate of Rs 59

For example, a diamond merchant who had booked the rough diamond consignment worth $1 million last month when the exchange rate of rupee was at Rs 55 per US dollar will have to pay Rs 59 per US dollar at present. However, the diamantaire will have to pay Rs 4 extra on the import of the rough diamond consignment.

Market sources said the rough diamond parcels are parked in Antwerp, Dubai and other African countries and Indian diamantaires are paying the depreciation charges to the exporters, believing the currency may recover soon. There are murmurs in the market that the rupee is likely to depreciate further.

"Nobody wants to take any risks. Though the prices of rough diamonds have increased by 15-17 per cent the last five months, the diamantaires are faced with a new set of worry about the weakening Indian rupee. Most of the diamond merchants have parked their diamond parcels overseas fearing the dollar may appreciate further in the coming days," president of Surat Diamond Association (SDA) Dinesh Navadia said.

As per the official statistics of the Gems and Jewellery Export Promotion Council (GJEPC), India imported rough diamonds worth $5.5 billion in five months from January-2013 to April-2013 against the $5 billion worth of import during the same period last year.

India's annual rough diamond import is pegged at $15 billion and that around 90 per cent is bound to Surat for cutting and polishing. The import of rough diamonds in the month of April was worth $2 billion registering an increase of 26 per cent compared to $1.5 billion in the same month in previous year.

Asked about the impact on the industry, Navadia said "The industry may experience the rough diamond shortage. This will further result in the diamond workers getting less work."

A diamond merchant Rakesh Patel said, "The industry is following the wait and watch strategy as far as the import of rough diamonds is concerned. Nobody in the industry want to cough up extra bucks at the time when the merchants are facing liquidity crisis."