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16th February 2010
Investors bought more gold than jewellers for first time in 30 years in 2009
Demand for gold as an investment surpassed demand from the jewellery industry last year for the first time since 1980 as prices reached record highs, according to AngloGold Ashanti Ltd., Africa’s largest producer of the metal.
“The U.S. market continued its rally with the case for gold investment gaining traction with both retail investors and institutions,” the firm said in its earnings report. “There is now also talk of significant bar purchases by some of the larger buyers which are opting for bullion rather than paying the storage and management fees charged by” so-called exchange-traded funds (ETF), AngloGold said.
Gold jumped to a record $1,226.56 an ounce in December, rallying for a ninth year, as investors, worried about the possible inflationary impact of massive government financial stimulus packages worldwide, as well as low interest rates, poured huge amounts of cash into gold.
The price of gold was also boosted by central bank buying of gold, particularly in India and China.
Meanwhile, the World Gold Council said global gold demand climbed 2.6 percent in the fourth quarter to 819.7 metric tons. North American and Western European retail investment demand jumped 77 percent.
12th February 2010
Gareth Penny says De Beers may raise output by 20 percent in 2010
De Beers may increase output by more than 20 percent this year due to “strong” growth in demand as the gem industry recovers from global recession, said managing director Gareth Penny.
Production may rise to more than 30 million carats this year and “in the 40 millions of carats” in 2011, Penny told Bloomberg News.
"We’ve seen quite a strong rough diamond market emerging in 2010,” Penny said. "We’re going to be pretty close fairly shortly to the price levels that prevailed at the end of 2008.”
De Beers slashed output by 49 percent last year as demand slumped for luxury goods, the company reported in its annual results for 2009.
Sales at DTC fell 46 percent to $3.23 billion last year, De Beers said.
Rough diamond prices began rising from mid-2009 as De Beers cut output and gem dealers rebuilt stockpiles in the run-up to the Christmas holiday.
Christmas-season sales globally were better than expected, Penny said. In the U.S., the largest retail market for the gems, sales rose 1 or 2 percent from a year ago, he said.
10 February 2010
CIBJO calling for renewed effort over natural and synthetic nomenclature
The Diamond Commission of CIBJO, The World Jewellery Confederation, is calling for a renewed effort to reach industry-wide agreement on nomenclature that accurately distinguishes between natural and synthetic diamonds ahead of the 2010 CIBJO Congress.
The appeal is contained in CIBJOs annual report which it has released in the run-up to the annual congress which takes place in Munich and starts on February 19.
In their report, Udi Sheintal and Jon Phillips, respectively the president and vice president of the Diamond Commission, note that they will be meeting with representatives of the International Diamond Council in London before the start of the CIBJO Congress. The aim of the meeting is to investigate whether progress can be made in creating a joint set of nomenclature for natural and synthetic diamonds.
"Hopefully all participating parties will concur that the lack of an agreed to nomenclature for diamonds - natural and synthetic - ultimately will affect consumer confidence negatively across the globe," they write in the report.
Delegates to the CIBJO 2009 congress in Istanbul decided not to change the nomenclature permitted for gem-quality synthetic diamonds. As a result, the only descriptor permitted by CIBJO is the adjective "synthetic."
The other terms that were proposed were: "man-made," "laboratory-grown," "laboratory created" or "[company name]- created."
In a similar vein, the Diamond Commission report looks at the misrepresentation of diamonds in the mass media, and in particular in-flight magazines and sales catalogues. Without a common, joint directive from the major umbrella organisations, such as the WFDB, IDMA, IDC and CIBJO, offenders "will continue to get away with arguments that the nomenclature is not clear-cut and therefore ineffective," the reports authors write.
The Diamond Commission report also looks at a study conducted by a task force created by the Accredited Gemmologists Association (AGA) into the impact of lighting on colour-grading colourless diamonds. The Task Force was established in response to allegations in recent years from gemmologists and appraisers that colourless diamonds exhibiting blue fluorescence were being over-graded by gem-testing laboratories.
1 September 2009
Diamond-set watch individualised by wearer’s fingerprint
Piaget, the Swiss luxury watchmaker and jeweller, has developed new way to enable its more wealthy clients individualise their purchases. Its Altiplano Fingerprint watch features a diamond-set dial with a design based upon the wearer’s own fingerprint.
Buyers of the Altiplano Fingerprint watch supply Piaget with an impression of their own fingerprint, and then the company uses it to create a one-of-a-kind dial in gold and round brilliant diamonds, in its Geneva workshop. No one watch, like no one fingerprint, is like any other.
And it’s not only about the diamonds. The Piaget Altiplano Fingerprint watch features a hand-wound mechanical movement, contained in one of the slimmest casings in the industry. In look and performance the watch is all high-quality.
Among the individuals whose fingerprints have been recreated in diamonds are reportedly Monaco’s Prince Albert II and the pop-star Ludacris.
Piaget was founded in 1874 by Georges Piaget in the Swiss village of La Côte-aux-Fées. It is today owned by the Richemont group.
1 September 2009
Belgium consumer confidence rises to highest level since September 2008
The National Bank of Belgium has reported that its consumer confidence indicator has risen to its highest level in almost a year. According to the bank, the indicator stood at minus 11 in August, up from minus 17 in July. It was the highest level reported since September 2008.
Other indicators were also more upbeat, the central bank reported. Its measure for households saving capacity over the coming 12 months rose to to 5 in August from 2 in July, while the financial situation indicator climbed to 1 from minus 2 in June. The measurement for the economic situation in Belgium during the coming 12 months stood at 7 in August, up from minus 4 in July. The measure for unemployment fell to 57 from 65 in July.
According to the Organisation for Economic Cooperation and Development, GDP in the euro zone dropped by 0.1 percent during the second quarter of 2009, following a decline of 2.5 percent during the first quarter.
1 September 2009
Diamonds are a guy’s best friend
Published: August 28 2009 17:54 | Last updated: August 28 2009 17:54
My better half never used to like jewellery – thank goodness – but, after talking to one of her friends, she’s started leaving leaflets about diamonds lying around the house. Even the children have mentioned it recently – according to my daughter: “Mummy says she’d love a nice diamond”. Well, Daddy would love a nice twin-engine plane, but he’s not getting that either.
This response has so far failed to silence the ‘debate’. Apparently, my wife’s friend has declared that, “diamonds are a much better safe haven than all that brash gold”. She’s obviously been listening to the marketing bods from De Beers who are preparing an advertising campaign based around just such a thought: why bother buying gold as insurance against monetary fiat, when you could have a lovely white diamond?
Adventurous Investor: More columns from David Stevenson - Oct-28..This also seems to have been the thinking of the super-slick diamond thieves who took down a Mayfair jewellers a few weeks ago for £40m plus.
In honesty, I do see their point. Gold is so, well . . . boring and samey. What I mean is that gold never looks unique. In a generic sense, it all looks the same. Diamonds, on the other hand, have always struck me as distinctive and individual – no two high grade diamonds are ever quite the same and I’m guessing that the market for investment grade diamonds is inefficient and riddled with ‘emotion’.
Like all emotional assets – a term I’ve discussed before with reference to collectables – value is set by what a buyer will pay. So, if that buyer is a Russian oligarch or Middle Eastern potentate, then the sky’s the limit. That imperfection in the marketplace is both a risk and a potential source of reward.
The risk is that ‘insiders’ will take you for a ride. It’s a particularly big risk in the diamond sector where many auctions are closed. But the potential rewards are that, with the right ‘alpha’ – or expert investment manager – you can exploit these markets to add some non-correlated returns to your portfolio.
Until recently, there wasn’t a way of testing this theory. Then, last summer, some adventurous types launched a listed diamond fund called Diamond Circle Capital. It buys high-grade polished diamonds, including coloured and large white stones, with an average purchase price of £3m-£5m. The fund is 90 per cent invested and is managed by the commodity specialist Diapason Commodities Management.
With hindsight, the summer of 2008 was not the ideal time to launch a fund that invests in a luxury product influenced by high-spending Americans (50 per cent of the market), Russians and Gulf princes. De Beers, for instance, cut back Q1 2009 output 91 per cent year on year, and profits tumbled. So the fund is down 50 per cent in price terms since launch, with net assets down 28 per cent.
But my contrarian instincts suggest that this woeful situation might be worth a second look based on the following:
● 5ct diamond prices have outperformed gold bullion over the last 25 years – they may even be a better hedge against inflation.
● Global supply of crucial Kimberlite deposits is in decline.
● Chinese demand is ramping up. A recent article on the IDEX news website noted: “Chinese diamond imports were up nearly seven per cent in the first half of 2009 . . . between January and June, China’s foreign diamond trade amounted to $692m, a growth of 6.9 per cent compared with the same period last year. The total included a record $300m in imports, up 12.7 per cent . . . China has become the world’s third largest diamond consumer after the US and Japan.”
● US demand for diamonds might also increase when the US economy picks up.
● Shares in Diamond Circle Capital are trading at a 30 per cent discount to net asset value (NAV) in a sector where pricing is fairly liquid and open.
Take these together, and you can begin to see why diamonds might make a very small ‘alternative assets’ holding.
But, before you get too carried away, consider one piece of recent research. Last year, I wrote about Bernard Duffy and a team of academics who had studied “emotional assets” including diamonds and other collectables. They found that, over the 30 years between 1976 and 2006, diamonds (as measured by the HRD Carat D Flawless Index) had produced a return of 4.4 per cent (above coins, clocks and watches) but with a massive standard deviation of 19.5 per cent. Over the 20 years to 2006, that return had dropped to just over 2.5 per cent but still with a big 10 per cent standard deviation.
They also noted: “Some collectable items show a tendency to move in line with each other, with a high correlation coefficient, such as diamonds and coins, books and atlases, and clocks and watches and stamps.”
However, diamond enthusiasts argue that this recent under-performance has ended and supply/ demand forces will reassert themselves. If they’re right, Diamond Circle Capital could be an interesting, sideways bet on growing affluence in the emerging world
25 August 2009
iaget, the Swiss luxury watchmaker and jeweller, has developed new way to enable its more wealthy clients individualise their purchases. Its Altiplano Fingerprint watch features a diamond-set dial with a design based upon the wearer’s own fingerprint.
The Hope Diamond will get a new setting with your help and a vote as the Smithsonian Channel wants you to have a say in where a beautiful and exquisite 45-carat diamond sits. Gene Byrd takes a look at the way to move the big massive rock from its traditional setting to a new one.
Some think its foolish to ever move it with one adding, These people are idiots to even think about resetting the Hope Diamond... it is beautiful just the way it is, surrounded by diamonds... the three choices offered by Harry Winston are completely underwhelming, and look nothing short of cheap... why is it everyone thinks everything needs to be changed or improved at some point, even when it doesn\t need such? I call that pretty damned arrogant. " Have your vote and see the designs at Smithsonian Channel.
12 August 2009
Christies predicts top price for five-carat pink gem
12 August 2009
Platinum and diamonds make cellphone one of worlds most expensive
British craftsmen have turned a Nokia mobile phone one of the world’s most expensive such devices by using platinum and diamonds.
The Nokia Royal Plus costs £30,000 ($50,000) and was created by Goldstriker International founder Stuart Hughes and three craftsmen who took several months to transform the handset.
The company removed the carbon fibre from the phone and replaced it with 65 grams of platinum. By way of comparison, the average platinum wedding ring weighs just four grams.
The platinum was then set with 1,160 diamonds totaling 8.2 carats of VVS F coloured stones.
The finishing touch is a granite case and the mobile can only be bought at high-end London store Harrods.
Hughes specializes in using gold, platinum and diamonds on mobile phones, iPods, pens and lighters.
It has also created an 18 K rose gold iPhone set with 53 pink diamonds with a price of £21,995 ($33,000).
12 August 2009
London police say $65 million of jewellery stolen in Graff Diamonds raid
A retail value of £40 million ($65 million) has been given by London police for the jewellery stolen from Graff Diamonds luxury jewellery store in Londons up-scale Mayfair area last Thursday.
The raid makes it by far the largest of its kind in Britain, eclipsing the almost $40 million of jewellery stolen from the same store in May 2003.
The police said that two men dressed in suits, under which they had handguns, placed 43 jewellery items in a bag and got away as they threatened workers with warning shots.
The stolen items were set with 1,437 individual diamond stones.
Police said the stolen jewellery includes a pair of white gold earrings set with 216 white diamonds; a platinum and yellow gold ring set with 179 yellow and white diamonds; a set of white gold earrings set with 84 diamonds; a large platinum and gold necklace containing 272 pink and yellow diamonds; and a necklace set with 78 diamonds.
Police have released a closed circuit film from the store showing the men – one white and one black – being let in through the security doors. After gaining entry, they took out their handguns and threatened staff.
They then placed the jewellery items in a bag before briefly taking a female employee hostage. She was released as the men made their getaway in a blue BMW.
They were nearly caught when the car crashed into a taxi and members of the public pursued them. However, the men fired warning shots in the air and escaped in a silver-colour Mercedes, before later swapping that for a black vehicle.
Police suspect that the bag of jewellery was handed over to man on a motorbike who was able to escape quickly through the busy streets of Londons West End.
London Metropolitan police detectives suspect the robbers knew exactly which items to steal, and may already have a market for the jewellery.
Although the suspects details were sent to all of Britains ports and airports, the police believe they likely had a well-organised escape route and the jewellery may already have found its way abroad.
12 August 2009
Belgium extradites man to France in connection with Paris Chopard robbery
The Belgian authorities said that last month they extradited a man to France in connection with the theft of several million euros of goods from a luxury Paris jewellery house.
They said the suspect, aged 52, was detained in the Belgian port city of Antwerp, the hub of the countrys diamond industry, in mid-July following a request from French justice authorities.
He was extradited to France several weeks later where he is in custody, according to the Associated Press report.
Investigators say the man, wearing a suit and a hat, entered the Chopard jewellery boutique on the chic Place Vendome on May 30. He calmly left the store some minutes later having stolen up to 6.5 million euros of jewellery after threatening staff with a gun.
Neither the Belgian nor French authorities have released any other details about the suspect. And police are not willing to comment on whether the jewellery was recovered.
2 August 2009
Diamond makeup gives Madonna extra sparkle
As if pop star Madonna does not make a stunning enough impact in her live shows, the pop icons makeup artist has found a new way of making her sparkle with crushed diamonds.
For her Sticky & Sweet 2009 tour, Madonna has extra glitter by having her eyelids dusted with a mixture of white shadow and flawless, crushed rose-cut diamonds.
And to add to that, another two carats of small diamond pieces are being affixed to her brow bones in a move inspired by her hit “Ray of Light.”
Madonnas Artistic Director Gina Brooke said of the impact of the diamond makeup: “The resulting brightness and glow from Madonna’s eyes captivate the audience and reinforces the fact that there are always new possibilities with makeup — and no rules," according to People magazine.
12 August 2009
Tiffany & Co. to open fifth store in Australia as economy picks up
U.S. jewelry retailer Tiffany & Co. plans to open a fifth store in Australia in November.
The jeweler already runs stores in Melbourne, Sydney, Brisbane and Perth. The latest addition will be its first shop in the country to be in a suburban setting in Melbourne.
The Tiffany & Co announcement comes as Australia provides increasing proof that it will be the first Western country to emerge from the global recession.
While the United States, Europe and Japan are all forecast to post falls in gross domestic product this year, Australia is projected to post growth, albeit at a low level of around 0.3 percent, with stronger expansion of around 1.5 percent in 2010.
The Australian economy has been aided by strong sales of commodities such as iron ore to China, and because its relatively healthy financial system managed to largely avoid the bad-loan problems that battered banks in the United States and Europe.
20 July 2009
Despite cutbacks, De Beers expects to be profitable in 2009
In spite of a near freeze of diamond production during the first part of 2009, De Beers expects to end 2009 in the black.
Speaking to Reuters, David Prager, De Beers director of communications, said that the company will achieve both postive interim and full-year results, even output was cut by 90 percent in the first quarter. “It wont be negative... clearly therell be a drop, but I dont think it will be dramatic... maybe some people will even be surprised because its better than they thought,” Prager said.
“The company will be profitable this year and obviously thats critically important,” he added.
Prager said that De Beers is pushing forward with its plan reduce operating and capital costs by $1.5 billion in 2009. This, he said, will leave it in a strong position for the future as recovery takes hold. Full He predicted that full year output would fall by 50 percent.
Prager reiterated comments made in Antwerp earlier by De Beers Managing Director Gareth Penny that there are signs of a market rebound. “Weve definitely seen signs of recovery in the market,” he told Reuters, “but were talking about first half numbers and its certainly no surprise that at least the first quarter of the first half was historically difficult.
“Obviously things arent back to normal and people are still cautious, but were certainly not in the place we were even in March,” “Prager said.
“We expect to see in the second half a further return in demand, and then moving into 2010, more of a return to normal trading conditions. All the signs point to a progressive recovery,” Prager stated.
20 July 2009
Domestic considerations behind Russia’s stockpiling of rough diamonds
Political considerations rather than pure economics are a major factor behind Alrosa’s decision to maintain rough production levels, at a time when other producers were cutting back sharply, according to a report by Oxford Analytica.
In May, stated Oxford Analytica, it was estimated that the world wholesale market for polished diamonds would fall from $21.5 billion in 2008 to around $12 billion in 2009. Despite this, Alrosa continued producing at 2008 levels, with production down by a minimal 1.9 percent from January through May, compared to the same period in 2008. In contrast, De Beers cut its output by 91 percent.
A consideration of paramount importance, stated the Oxford Analytica report, is Moscow’s relationship with Yakutia, the site of most of Russia’s producing diamond mines. Alrosa’s largest shareholder is Russia’s federal government, and the chairman of its supervisory board is Finance Minister Aleksei Kudrin. Prime Minister Vladimir Putin has centralised control over many of the country’s natural assets, but is keen to maintain a working relationship with the Yakutian government. As a major employer in Yakutia, any dramatic cut in production by Alrosa would have brought about a sharp rise in unemployment and tension between Moscow and the Shtirov adminsitration.
Alrosa has managed to maintain production levels by selling increasing amounts of its output to Gokhran, the state repository of precious metals and precious stones. Sales to the world market have fallen considerably. In effect, wrote Oxford Analytica, production by Alrosa, a Ministry of Finance-supervised business, is now being sustained by selling output to an entity that is also controlled by Ministry of Finance, Gokhran.
When market conditions improve, Russia will be holding on to large amounts of rough diamonds, and that could have positive economic consequences. But, surmises the Oxford Analytica report, the long-term effect on the international diamond market is not likely to be substantial.
Oxford Analytica is an independent strategic-consulting firm drawing on a network of more than 1,000 scholar experts at Oxford and other leading universities and research institutions around the world.
20 July 2009
Survey provides hopeful news regarding U.S. bridal market
Encouraging news regarding the U.S. jewellery market has emerged from a survey carried out by The Knot Inc., the owners of The Knot Wedding Network, which includes the Internets most-trafficked wedding websites and communities, TheKnot.com and WeddingChannel.com.
The recently held survey of more than 9,000 recently married couples captured detailed feedback on everything from the proposal itself to the engagement ring, wedding bands, and wedding day jewellery.
Among the highlights of the survey are that 67 percent of brides are involved in the selection and/or purchase of the engagement ring, a slight increase of 5 percent over the past few years. A third of brides are even visiting ring retailers without their fiances.
Among brides significantly involved in the engagement ring purchase, the couple spends three months looking at approximately 28 rings at more than four different retailers, on average, before choosing the one.
The average amount spent on an engagement ring is $5,800, with more than 20 percent of couples spending more than they had originally planned. Most couples, 80 percent, claimed that they were not downsizing their ring as a result of the current economic slowdown, and although 16 percent of couples determined the engagement ring budget together, it was the groom who ultimately made the decision (82 percent).
Most brides received their first choice of stone shape and cut (67 percent) and metal (78 percent). When it came to choosing a ring, stone cut and shape, and style and setting were the most important attributes, with 53 percent and 52 percent, respectively, ranking it as number one or number two. Price and value and stone size tied as the fourth attribute under consideration.
Couples are spending more than $2,000 for both of their bands, with almost twice as much spent on the brides ring.
More than 9,000 qualified couples of mixed ethnicities, education, and income levels were polled across 50 states. Wedding dates of those polled fell between August 2008 and September 2009
20 July 2009
Rose gold and pink diamond iPhone revealed
Yet another uber-luxurious phone is on offer with the news that four craftsmen have created a the worlds first 18ct solid rose gold iPhone 3GS complete with copious amounts of diamonds.
The luxury offering contains approximately 150 grams of 18ct rose gold, finished off with no less than 53 pink diamonds housed in the 18ct rose gold Apple logo.
The iPhone will go on sale at www.stuarthughes.com later this week priced at a mere £21,995
14 July 2009
GIA Adds Fluorescence Info to Diamond Reports
Effective immediately, the Gemological Institute of America (GIA) will include a description of a diamond’s ultraviolet fluorescence in its GIA Diamond Grading Reports and Diamond Dossiers. The Institute will use in their newly revised diamond grading reports to help better educate the public on this “common, but little understood phenomenon in diamonds,” the Institute said in a recent press release.
A separate, four-color insert chart will explain the properties of a diamond’s fluorescence in consumer-friendly terms and includes comparison images of diamonds in both natural and UV light to illustrate varying intensities of fluorescence. The five terms GIA uses to classify the intensity of the fluorescence are: None, Faint, Medium, Strong, and Very Strong.
“Some diamonds show fluorescence and some don’t,” said Thomas Moses, GIA’s senior vice president of Laboratory and Research. “Fluorescence is the emission of visible light by a diamond when it is stimulated by invisible ultraviolet (UV) rays. It is a common characteristic of diamonds. The diamond simply glows under the UV lights, usually a blue color, which most often stops when the energy source causing it is removed.”
For more than 50 years, GIA has indicated the presence of diamond fluorescence on its diamond grading reports, but described it on the report as an “identification characteristic only – not a grade,” Moses said.
“This insert will help the public better understand diamonds in general, which gives them more confidence and knowledge when making a decision about a diamond,” Moses added.
GIA has additional information on fluorescence on its website, including a scientific article, “A Contribution to Understanding Blue Fluorescence on the Appearance of Diamonds,” by Thomas M. Moses, Ilene M. Reinitz, Mary L. Johnson, John M. King and James E. Shigley, which appeared in the Winter 1997 issue of GIA’s Gems & Gemology.
11 July 2009
Antwerp hopes to keep its sparkle
Antwerp is the capital of the global diamond trade.
Its gripped gently between tweezers and is worth millions in almost any currency youd care to choose.
The stone Im looking at is about the size of a walnut, and its being assessed at a laboratory in Antwerp, Belgium, so it can be given the equivalent of a diamond identity card.
A certificate will be issued confirming authenticity, and recording its essential characteristics, or the 4 Cs: carat, colour, clarity and cut.
I find it difficult to take my eyes off the 30 carat monster, but for the people grading the diamonds its another day at the office, and music from a radio drones on in the background.
Were told later by a diamond dealer that the stone should fetch up to $5m (£3m), and thats wholesale.
Antwerp has certainly secured its place as capital of the diamond trade - 80% of the worlds rough diamonds and 50% of all polished stones pass through the city. But these are hard times for diamonds.
Philip Claes says the industry is optimistic.
"Diamonds are a luxury product, one of the first things that consumers drop from their list," says Philip Claes of the Antwerp World Diamond Centre (AWDC), which represents the industry.
"We have been hit quite hard by the economic and financial crisis."
In the first four months of this year, imports of uncut diamonds to Antwerp fell by 45% compared to 2008, and exports dropped by 30%. For polished diamonds, import and export volumes were down by 32% and 28%, respectively.
The coming months are very important for Antwerp, as jewellers prepare to buy for the Christmas shopping period.
"50% of all polished diamonds are sold in the US, most of them during that period," Mr Claes tells me.
"The predictions are that it will be better than last year, people are optimistic, but a full recovery wont be before the end of 2010."
We talk as he shows me around the Beurs voor Diamanthandel, one of Antwerps diamond exchanges.
Its huge windows are to catch the clear northern light so traders can assess the diamonds on offer.
Theyve been doing deals at this exchange since 1904, but with some traders now preferring to do business away in company offices its also something of a social club.
The Beurs voor Diamanthandel is an institution based on security and trust.
Looking at the lost property board I see several notices saying "found, one stone". Its apparently all too easy for the occasional diamond to drop from a table unnoticed.
Antwerp has had to adapt over the years as globalisation has shaped the industry. In the 1960s the Antwerp area was home to about 30,000 diamond polishers; today there are only 1,000 left.
Traders also use the diamond exchanges as social clubs
Most polishing is now done in other parts of the world where labour is cheaper.
Im taken to the seventh floor of an anonymous looking building in Antwerps diamond district to see how rough diamonds acquire perfect brilliance.
At Meylemans & Somers Diamondcutters it looks and sounds like an industrial process, with half a dozen men bent over noisy polishing equipment.
It takes the polishers, each with at least 10 years experience, about four weeks to make a diamond truly sparkle.
At Meylemans & Somers theyve managed to resist competition from elsewhere in the world because they specialise in polishing large stones.
"Were talking about huge values, so the cost of manufacture is not that important," says Dany Meylemans.
"Of course theres the low cost of India and China, but were sitting in the heart of Antwerp.
"Were very close to the owners, and they see the manufacture and their stones every day, we discuss the process and they can change the plan. When youre in India or China its much more difficult to do this."
To deal in diamonds you obviously need access to a lot of cash, and with the recession biting the industry has had to develop a new way to secure credit.
Raj Mehta says the industry expects the Flemish government to help.
The banks have now agreed to accept diamonds as collateral so that Antwerps diamond trade can access new credit of up to 1bn euros ($1.4bn; £856m) for two years.
The AWDC has also asked the regional Flemish government to support the trade in the form of a temporary additional guarantee of 200m euros.
"Like in every other industry, governments have come into the picture and have helped industries," says Raj Mehta, senior vice president of the diamond group Rosy Blue.
"Antwerp does deserve help and the industry expects it will come."
Before the crisis, about 8,000 people were employed in Antwerps diamond sector, and indirectly a further 26,000 jobs relied on the trade. Its estimated that about 1,000 jobs have been lost because of the downturn in diamonds.
Mr Mehta stresses that diamonds are an important part of the social and economic fabric of the city. Antwerp has been a trading centre for diamonds for more than 500 years.
"History is very important, the prestige, and theres a lot of employment here," he says.
"To keep a good part of the economy of Antwerp, this [help for the industry] will be an important thing for the government to do."
De Beers first used the advertising slogan "A diamond is forever" more than 50 years ago. "Fewer, better things" is now its message for these straitened times.
11 July 2009
The Diamond Trade Week in Review 07/10/2009
RAPAPORT... Global Markets
The market in the U.S. has slowed with the advent of summer vacations. Summer wedding season was driving demand at retail, with wedding bands being the top seller. On the whole, though, retailers are seeing slower traffic. Rounds and cushions in 1.25-2.00 ct., color and near-color, SI-I1, are selling well. Retail demand for princess-cut stones is outlasting current supply as prices have increased for those goods that are left in the market.
In Belgium, the market has picked up slightly but remains relatively slow. Small goods are selling well and there is high demand for rounds of 0.30-0.90 ct., D-H, VVS-VS1, and for 1.00 ct. collection goods. BHP Billiton and Diamdel hosted tenders in the past few weeks whose results indicated continued price increases, although there was some resistance at certain levels, signaling that the rise in prices for rough has started to slow.
The market in Israel is stable but has showed signs of weakening in the past week. Manufacturers are frustrated that polished prices have held steady while those for rough have increased in the past month, cutting into their profits. The items which are selling best are diamonds of 0.50-0.89 ct., H-J, VS2-SI2, while stones larger than 1.50 ct. are moving much less.
The polished market in India has slowed in the past week as buyers are resisting higher asking prices and expecting some price reductions. Large gaps have developed between buyers’ asking prices and sellers’ offering prices. Activity in the local rough market is also slow, although Indian dealers continue to seek out rough. Low liquidity, currency fluctuations and high prices, however, continue to impact transactions in the rough market.
Demand remains strong in China for 0.30-1.10 ct., D-H, VS triple-EX and double-EX goods, with round uncertified stones below 0.20 ct., H-I, SI, also selling well. The market is slow but stable, with little changes from week to week through the summer months. There remain some expectations for price increases in the market following the uptrend seen in the past month.
Shortages continue to plague the market in Hong Kong, and dealers with the right inventory are able to sell their stock easily. Popular items remain 0.50-2.00 ct., G-I, VVS and 0.50-2.00 ct., D-F, SI goods. Trade is generally quiet through the summer months, and little is expected to change until before the September show.
Between the Lines
Petra Diamonds reported that rough prices have increased 25 percent since the beginning of the year, after falling some 65 percent in the fourth quarter and the early part of 2009. The company, which surpassed its production target of 1 million carats in fiscal 2008-09, noted that since April, a degree of liquidity has returned to the market, the mood has improved and “inter-dealer trading, that had become almost nonexistent, has started to pick up.” Petra, a major stake in which is owned by Saudi investment firm Saad, has kept production at near-full capacity and has sold all of its production throughout the crisis.
Junior diamond mining companies have, on the whole, kept their operations closed since the downturn, and it seems that the longer they do so the more attractive their projects become as acquisition targets. Such was the case this week, when BRC DiamondCore sold its South Africa assets to KIG Mining for $11 million. Tenders from the company’s Silverstreams alluvial mine generated approximately $6.5 million in 2008 before operations were suspended in December. The value of diamond-project acquisitions in 2008 fell 73 percent to $210.5 million, offset primarily by Harry Winston’s sale of 9 percent of the Diavik mine. While it remains to be seen whether any of the large operations change hands this year, the trend of attractive smaller development and exploration projects being purchased is expected to continue.
Birks & Mayors followed other major jewelry retailers in posting a 23 percent decline in sales during the quarter that ended March 31, further displaying the poor performance of the jewelry sector during the period. The company said it had lower traffic and price points during the period, which affected the sales total. On an encouraging note, B&M noted, as other retailers did, that the rate of decline has progressively improved in the second quarter and continued to do so in July. The question remains to what extent it has done so.
Members of the Kimberley Process review team to Zimbabwe reportedly accused the country’s state-controlled military and police of being major contributors to the illegal activities, human rights abuses and murders that took place at the Marange diamond fields in 2008. While government officials denied any wrongdoing, Zimbabwe has reportedly committed to withdrawing its troops from the fields. Securities forces opened automatic fire on illegal diggers at the alluvial mine in November 2008, killing 12. Subsequently, guards at the mine were found to be digging illegally. Of concern, however, has been the late reaction of the Kimberley Process (KP) to the events at the mine. While the KP declined to give official comment, the review visit and the Marange discussion should have taken place much sooner than eight months after the incidents. Still, Zimbabwe remains a key test for the Kimberley Process, which increasingly appears to be at a crossroads.
Quote of the Week
As patience is needed during these challenging times, one might remember the advice of self-help author Robert Collier, who said, “Success is the sum of small efforts, repeated day in and day out.”
11 July 2009
De Beers Botswana Unit May Restart Orapa 2 Earlier Than Planned
July 10 (Bloomberg) -- Debswana, the joint venture between De Beers and Botswana, said it may reopen its Orapa No. 2 mine earlier than planned to meet growing demand for the gems.
“As demand for rough diamonds from clients has picked up, we are looking at ways to meet that demand,” said De Beers spokeswoman Lynette Gould. One of the options to meet this demand may be to restart operations at Orapa No. 2 “soon,” she said in an e-mailed response to questions today.
“We’ll be able to comment in more detail once these plans are solidified,” Gould said. Debswana said in February it would keep Orapa No. 2 and Damtshaa shut for the rest of the year because of a slump in diamond sales.
The venture restarted the Jwaneng, Orapa No. 1 and Letlhakane mines on April 15 after an extended shutdown from December. Debswana said on June 12 there has been a “slight” improvement in sales of rough diamonds.
Labor unions in Botswana have been told “the chances are high” that Orapa No. 2 may start producing again soon, said Sebataladi Ramoitoi, deputy general secretary of the Botswana Mineworkers Union, in an interview in Jwaneng, Botswana, yesterday. “That is a positive indication.”
Debswana told the labor union that preparations to restart the mine will begin this month, Regent Reid, chairman of the union’s Jwaneng branch, said in an interview.
6 July 2009
Russia Stockpiles Diamonds
In response to falling global demand, Russia continues production and sells output to the state.
Russias response to the fall in global diamond prices has been to continue production--but to stockpile, rather than sell. This behavior has prompted speculation that the authorities are planning to manipulate international market prices.
In May, it was estimated that the world wholesale market for polished diamonds would fall from $21.5 billion in 2008 to around $12 billion this year.
Most diamond-mining companies responded to the weakness in the market by halting production, in most cases for several months. De Beers, which in recent years has supplied around 40% of the world market, cut its output earlier this year by 91%. The Argyle mine in western Australia, the countrys largest, stopped production, resuming only very recently. Botswanas major mines were closed for three months, putting 4,500 people out of work.
Russian response. The Russian response has been different. From January-May, diamond production was officially reported to have been down only 1.9% compared with the year-earlier period. The new Russian arrangement has been that the dominant producer, Alrosa (which accounts for 97% of Russian output), has been selling a large part of its output to the State Repository of Precious Metals and Precious Stones (Gokhran)--and selling very little onto the world market.
Role of Alrosa. Before other producers closed their mines, Alrosa accounted for about 25% of world output, against De Beers 40%. In recent months, it has become by default the worlds largest producer. Alrosa controls some production in Angola and western Russia, but the bulk of its output comes from the Republic of Sakha (Yakutia) in eastern Siberia. The regional government of Yakutia used to have a great deal of control over the industry, but under Prime Minister Vladimir Putin, the center has--in this as in other affairs--asserted itself. This is reflected in the present ownership structure of Alrosa:
--The company is state-owned and is therefore subject to direct state supervision. The main direct link is with the Ministry of Finance (MinFin): Finance Minister Aleksei Kudrin chairs Alrosas supervisory board.
6 July 2009
The Diamond Trade Week in Review 07/03/09
RAPAPORT... Global Markets
The U.S. market slowed again this week due to the July 4th long weekend and jewelers starting their summer vacations. The market is still being driven by bridal goods, and the bread-and-butter engagement stones are selling best. There is short supply of princess cuts over 1.00 carat, but there are reports that cutters are now beginning work on these goods. Melée dealers, particularly Indian buyers, seem anxious for goods.
The market in Belgium has slowed in the past week, softening the mood slightly after a positive Hong Kong show. While activity is low, rounds of 2.00 ct., G, VVS remain the hot item, with 0.50-2.00 ct., D-H, VS goods also selling well. There is also good demand for collection fancy goods above SI clarities. Princess-cut, 1.00 ct., D-F, VS stones are also in demand. Dealers are expecting further increases in rough prices with the start of the BHP Billiton tender in Antwerp this week.
The market in Israel has been slow but stable since the Hong Kong show. Buyers have become fussier about the goods they are seeking, indicating some oversupply in the market. Buyers are asking for triple-EX goods with no fluorescence, and stones that are not perfect are becoming very difficult to sell. Manufacturers are expanding the range of their portfolios, moving to new commercial sizes where the demand lies. They are also exploring new jewelry and retail avenues to help boost revenues. Demand remains relatively good for 0.50-1.50 ct. H-I, SI+ stones.
Shortages continue to plague the market in India even though local demand for polished goods remains soft. Activity has been slowed by higher asking prices for polished stones, and the volatile rupee-dollar exchange rate is affecting activity in larger-size items. The local rough market remains slow, due to continued liquidity issues and manufacturing units operating well below full capacity.
In China, the wholesale market is slow but steady, with no major holidays coming up in July to boost sales. Demand and prices for 0.30-1.10 ct. D-H, VS, triple-EX and double-EX goods remain relatively strong, while sales of triple-VG goods are stable. Round, uncertified stones below 0.20 ct., H-I, SI are also selling well. Suppliers are expecting prices to rise after seeing an upward trend in the market over the past month.
The Hong Kong market has slowed after the hype of the June show that ended last week, and as things taper off in the summer months. Traditional Hong Kong goods of 0.50-2.00 ct., G-I, VVS and 0.50-2.00 ct., D-F, SI remain in demand. The market is expected to remain quieter until the end of August when activity usually increases in anticipation of the September show.
Between the Lines
There has been some talk in the past few months of ALROSA replacing De Beers as the number one diamond producer. The claim is based on first-quarter production figures, in which De Beers saw a 91 percent drop in output as the two companies adopted different responses to the economic crisis. While De Beers cut production to level with lower demand, ALROSA kept production at near-normal levels and kept sales up by selling to government agencies rather than solely to the market. In such an environment, one needs to take a long-term approach and look at reserves rather than actual production to determine which company is the biggest, if such a determination is really at all important. By this measure, De Beers continues its reign as the largest.
Nevertheless, De Beers production outlook continues to be weak as Namdeb, its joint venture with the Namibian government, forecast that production will drop 63 percent to 800,000 carats. The company lowered its estimate from the declines of 48 percent and 60 percent it predicted in February and April, respectively. The main cause of the decline has been the three-month production break that was implemented, which comes to an end this week. A company spokesperson was quoted by AllAfrica as saying that, “while the return to production is a positive sign for future growth, a return to pre-crisis levels is still a long way off.” Of primary concern is the fate of the 11 manufacturing companies that were set up to ensure the effective beneficiation of the country’s diamonds.
India’s diamond manufacturing companies have had a tough time in the past nine months as they cope with the effects of the recession. However, a closer look at the 10 companies listed on the Bombay Stock Exchange (BSE) that are covered by Rapaport News indicates some solid sales growth overall during the year that ended March 31, 2009. With the exception of three companies, all of them posted sales increases, and only Suashish Diamonds experienced significant double-digit declines. Most of these companies have diversified into jewelry manufacturing and retail, a move which appears to have paid off. Sales were boosted across the board by the companies’ respective jewelry divisions, while their diamond units’ sales were relatively slack. Despite the positive sales trends, profits remained in a downtrend, as expenses generally increased in line with sales.
U.S. June unemployment figures released this week gave a clear indication that the recession is far from over. The data showed that 14.7 million people in the U.S. are currently unemployed and that the unemployment rate has reached 9.5 percent, its highest level in 26 years. The economy lost 467,000 jobs during the month. Concurrently, consumer confidence weakened in June according to a poll by the Conference Board. The Board’s director summed it up best, saying, “The decline….caused by a less-favorable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak.”
Quote of the Week
“Not only our future economic soundness but the very soundness of our democratic institutions depends on the determination of our government to give employment to idle men.”
Franklin D. Roosevelt (1882-1945) 32nd President of the U.S.
6 July 2009
Kevin Jonas Proposed With 3 Carat Diamond Ring
Kevin Jonas got engaged to girlfriend Danielle Deleasa last Wednesday and now a picture of the ring has been released.
The Jonas Brothers singer designed the platinum, 3 carat, cushion cut diamond ring with Jacob and Co. The band of the ring is covered in two rows of round pave diamonds. See a picture of the ring in the photo gallery below.
Jonas proposed on the doorstep of Deleasa’s New Jersey home Wednesday morning. Deleasa, 22, tells People magazine about the moment she realized what Jonas, 21, was doing. “I didn’t see the ring for a while because I couldn’t believe what he just asked me. I was looking at him, like, ‘Are you serious?’ When he pulled out that ring, I was like ‘Oh gosh.’ I said something like ‘Oh my God,’ and then I started crying,” she says.
No wedding date has been set yet.
29 June 2009
Argyle diamond mine back in production
After three months of not processing a single diamond, Australias largest diamond mine, is now back in production.
The Argyle mine in Western Australias far north stopped producing to avoid low diamond prices, but was able to keep the majority of employees working, spending $9 million on upgrading its processing plant.
General manager of production, Maryanne Kelly, says Argyle is in a better position to take advantage of higher prices, which she says are just around the corner.
"Were starting back up because we want to put diamonds back into the marketplace in a more controlled manner, so were actually feeding some of our lower grade material to use it up during tough times," she says.
"It (the lower grade material) has to go through the processing plant at some stage.
"Well feed it through sooner rather then later to enable our plant to run at full production, so that when the price returns mid to late next year, well be able to feed higher grade material and get a better price for our diamonds."
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