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Zimbabwe to Take Smaller Cut of Diamond Sales

Zimbabwe plans to reduce the percentage of sales diamond miners must pay to the state, aiming to encourage companies to invest in the Marange fields.

The government proposed a new royalty rate of 10% in the annual budget last week. Diamond producers currently pay 15% of gross revenues, but their overall costs have escalated as they shift toward hard-rock — or “conglomerate” — mining, which is lucrative but expensive.

The change could benefit companies such as Russia’s Alrosa, which is exploring for rough in the country, as well as Botswana Diamonds and Vast Resources, which operate a joint venture at the Marange fields.

“The royalty rate of 15% on diamonds was set during the period when mining was predominantly alluvial, and extraction cost was relatively low,” Mthuli Ncube, minister of finance and economic development, explained in his budget statement. “However, diamond miners are [now] exploiting conglomerate deposits, hence the cost of extraction has significantly increased.”

Last year, the state-owned Zimbabwe Consolidated Diamond Company installed a crushing plant at Marange to help it process the harder rock. The nation plans to increase its annual production to 11 million carats by 2023, from 3.2 million carats in 2018, Reuters reported last month.

The state intends to introduce the lower royalty rate on January 1 with the goal of attracting investment in exploration and extraction. The country has also made progress in its plans to repeal an “indigenization” law limiting foreign ownership of diamond and platinum mines, Ncube continued.

Source: Diamonds.net

Lucapa recovers two +100 carat diamonds at Mothae Mine

Lucapa Diamond Company has reported the recovery of two more +100 carat diamonds from the Mothae kimberlite mine in Lesotho.

One of the stones was a 220 carat stone and is the largest of the three +100 carat diamonds recovered to date from Mothae, since commercial production in January 2019.

The other diamond was 127 carat. Both diamonds were recovered from the treatment of recovery tailings. While the two diamonds are not high-quality, they continue to underline the large-stone nature of the Mothae deposit.

Lucapa Diamond Company reports the recovery of two more +100 carat diamonds from the Mothae kimberlite mine in Lesotho.

Ownership of the mine is split as follows: Lucapa 70%; Government of Lesotho 30%.

The 220 carat stone is the largest of the three +100 carat diamonds recovered to date from Mothae since commercial production commenced in January 2019.

The 220 carat and 127 carat diamonds were recovered from the treatment of recovery tailings.

While the two diamonds are not of high-quality, they continue to underline the large-stone nature of the deposit.

The mine continues to perform well in its first year of commercial production, with another monthly production record of 3,096 carats in the month of October.

Petra Sells 20ct. Blue Diamond for $15M

Petra Diamonds sold a 20.08-carat blue diamond from its Cullinan mine in South Africa for just under $15 million, it said Friday.

“We are very pleased with this result, which is in line with our expectations and confirms the resilience in the value of very high-quality blue diamonds,” said Petra CEO Richard Duffy. “We look forward to following this exceptional stone’s journey to its polished form.”

An undisclosed leading diamond company purchased the type IIb, gem-quality stone at tender in Johannesburg, South Africa, for $14.9 million, or $741,000 per carat.

“This is an encouraging result and shows that there is still strong demand for special diamonds,” noted investment bank Berenberg. “This is positive for Petra and puts extra cash on the balance sheet to work down debt…. We believe that today’s announcement is an undoubted positive for the shares.” Petra’s stock price rose 10% Friday.

The miner recovered the stone from the western portion of Cullinan in September. At the time, Berenberg estimated the selling price at $10 million to $15 million, while Shore Capital forecast it would fetch between $13 million and $15 million.

The company also plans to restructure its operation, implementing a flatter management structure, whereby the head of each mine will report directly to Duffy. As a result, the company has eliminated the position of chief operating officer, and Luctor Roode, who held that position, will leave Petra with immediate effect, the miner said.

Source: Diamonds.net

Cartier Bracelet Soars Past Estimate at Sotheby’s

Sothebys Geneva Saphhire and Diamond Bracelet

A sapphire and diamond bracelet fetched more than double its high estimate at Sotheby’s Geneva auction, selling to a female Asian collector after a bidding war.

The piece contains a 47.07-carat, royal-blue Burmese sapphire center stone with high clarity, cut in a cabochon shape and flanked by two pear-shaped white diamonds weighing 9.27 carats and 8.60 carats. Created by Cartier in 1927, the bracelet fetched $6.1 million against a high estimate of $3 million, and earned one of the highest prices at auction for an Art Deco bracelet.

In total, the Magnificent Jewels and Noble Jewels sale on Wednesday brought in $53.9 million, with 80% of lots sold, more than half of which exceeded their estimates.

“With its sensational ‘sugar loaf’ Burmese sapphire and powerful geometric design, the Cartier bracelet that led tonight’s sale was a true masterpiece, among the most important Art Deco pieces we’ve ever handled,” said David Bennett, worldwide chairman of Sotheby’s jewelry division.

The bracelet spearheaded a strong showing for Art Deco pieces, which achieved a combined $9.6 million at the sale, against a high estimate of $6 million, Sotheby’s noted.

A 6.03-carat, fancy-intense-purple-pink diamond pendant estimated at $2.5 million to $3.5 million garnered $3.4 million, while a diamond pendant weighing 78.29 carats went for $2.9 million, beating its $2.8 million high estimate.

A set of diamond jewels by Moussaieff, including a necklace, earrings and a bracelet, brought in $2.7 million. The collection was estimated at $2 million to $4 million.

Other notable items, many of which sold for well above their estimates, included a sapphire and diamond necklace set with a 14.97-carat Kashmir sapphire. The piece, dated 1890, fetched $1.4 million against its upper estimate of $800,000, while an emerald and diamond pendant-brooch combination, created by Cartier in 1927, garnered $1.1 million, smashing its $250,000 high estimate.

Meanwhile, Sotheby’s sold 93% of the jewels on offer from an Asian-American private collection, fetching a total of $12.7 million, against a high estimate of $8.9 million, the auction house said. The sale noted strong activity from Asian collectors, approximately half of whom were female buyers, more than double the number of women purchasers five years ago, Sotheby’s added.

Source: Diamonds.net

Botswana Diamonds digs up first stones at South African mine

Botswana Diamonds said Tuesday that it recovered the first diamonds from plant commissioning activities on its Marsfontein mine in Limpopo, South Africa.

The announcement comes only days after it received a mining permit for diamond-bearing gravels and residual unprocessed stockpiles around the operation.

Chairman John Teeling said the plant was very close to reaching full operations following the installation of an in-field screen, two rotary pans, grease and x-ray recovery system.

“I am delighted with the rapid progress the team has made on-site and it is noteworthy that the first diamonds were recovered within two weeks of the mining permit being granted,” Teeling said.

The Marsfontein mine was operated for two years in the late 1990s, with a payback of its entire development costs in less than four days. The mine’s grade was 172 carats per hundred tonnes, at a bottom cut-off of more than 1.2 mm, containing many fancy coloured diamonds.

The surrounding deposits in question were overlooked when the mine was closed.

Diamond miners are struggling across the board, especially those producing cheaper and smaller stones where there is an over-supply in the market.

Buyers, those that polish and cut diamonds for retailers, have been hit this year by lower prices and tighter credit, prompting them to delay purchases.

De Beers, the world’s top diamond producer by value, has responded by axing production — with a target of 31 million carats this year compared with 35.3 million in 2018.

It has also announced it would spend more on marketing. At the latest sale, the company increased the amount of stones buyers were allowed to reject in each lot purchased from 10% to 20%, according to people familiar with the auction.

Source: mining.com

De Beers boosted by jump in diamond sales

De Beers has surprised analysts by selling more diamonds than expected at its latest sale.

The world’s largest diamond producer, which is owned by Anglo American, sold $390m of rough stone this month, compared with $297m at its previous sale in October and above market expectations of around $300m.

“The company has attributed this rebound in sales to signs of increasing polished price stability leading to improving sentiment from rough diamond buyers,” said analysts at Citi.

However, the latest “sight” marks the first time De Beers has sold less than $400m of diamonds in November since 2016, illustrating the tough conditions in the diamond industry.

Diamond buyers, who polish and cut gems for retailers, have been struggling to make money this year as the price of finished stones has slumped. That has forced De Beers to offer more flexible terms to buyers, something that continued in November.

At the same time, the industry is facing competition from lab-grown diamonds, which are chemically identical to traditional stones.

“Global consumer demand for diamond jewellery at the retail level continues to be broadly stable but with midstream trading conditions still in the process of rebalancing, we offered sightholders further flexibility during the sight to provide support,” said De Beers chief executive Bruce Cleaver in a statement

Citi expects rough diamond sales to fall 23 per cent to $4.3bn this year. De Beers is expected to generate around 10 per cent of Anglo’s earnings in 2019.

Source: FT.com

Russia wants end to embargo on C.Africa diamonds

Russia backs lifting an embargo on diamond exports from the Central African Republic, the deputy finance minister said Tuesday as Moscow was preparing to chair a global scheme regulating the gem trade.

Russia has made moves to strengthen its influence in the poor but strategic CAR in recent months, sending military instructors to the country and receiving mining concessions as part of a plan to boost its presence in Africa.

Next year Moscow will be chair of the Kimberley Process, a global scheme established in 2003 to eliminate the so-called “blood diamonds” produced in rebel-controlled areas.

It currently upholds an embargo for rough diamond exports from some regions of the CAR.

But Russian deputy finance minister Alexei Moiseyev said the system was not working and told RIA Novosti news agency that exports from all regions of the CAR “should be made legal”.

“The current bans are unfair to poor people who can only earn money by (diamond mining),” he said, adding that Russia believes diamonds from banned “red zones” still find their way onto the market, undermining the embargo.

The CAR has been wracked by violence between various armed groups and the government for years.

The country was banned from exporting diamonds in 2013 and suspended from the Kimberley Process, but in 2016 government-controlled zones in the west were judged to be compliant and exports were approved.

Russian company Lobaye Invest, which reportedly has ties to an ally of President Vladimir Putin, recently received a licence to mine for diamonds at several sites in the CAR.

Moiseyev said the government and a special working group should work out a mechanism to make exports from all parts of the country legal.

According to Kimberley, CAR produced 13,571 carats in 2018, down from about 365,000 carats before the civil war began in 2012, but Moiseyev said it was likely that diamonds from banned zones still ended up on the market, boosting the number.

“We suspect that the same amount (as before)… is being produced now and practically all ends up on the world market as contraband,” he said. “The money earned is used by criminals.”

Source: RFI

7-Carat Blue Diamond Ring By Moussaieff Could Fetch $14 Million

A 7.03-carat fancy deep blue diamond mounted on a platinum ring by London high jewelry house, Moussaieff, is the top lot at Christie’s Geneva Magnificent Jewels sale. The blue rectangular-cut gem with VVS2 clarity has an estimate of $10 million – $14 million.

It is among a number of colored and colorless diamonds available at the November 12 sale. Other top lots in this category include a 46.93-carat D color, internally flawless diamond with a half-moon modified brilliant-cut (estimate $3.8 million – $4.5 million); and a 5.23-carat fancy intense blue cut-cornered rectangular modified brilliant-cut diamond (estimate: $3.5 million – $4.5 million).

Alrosa Profit Drops in Third Quarter

Weak rough-diamond demand led to a decline in profit at Alrosa in the third quarter, the Russian miner reported.

Profit slid 44% to RUB 13.5 billion ($211.6 million) for the three months ending September 30, as revenue faltered and the company’s margin fell, it said last week.

Sales decreased 37% to $611 million, as proceeds from both rough and polished diamonds declined. Rough sales slipped 37% to $601 million, while the average price for gem-quality diamonds slid 32% to $135 per carat, reflecting sales of a higher proportion of small-sized diamonds. Sales volume dropped 5% to 6.4 million carats.

“The diamond-jewelry demand was affected by increased macroeconomic uncertainty that put a damper on consumer confidence,” the company noted. “Amid the declining demand since the beginning of 2019, diamond-jewelry manufacturers and cutters have been actively reducing their stocks of end products and rough diamonds.”

Rough output grew 14% year on year to 12.1 million carats for the quarter, stemming from the launch of production at the Verkhne-Munskoye deposit, as well as higher production from the Botuobinskaya pipe.

In the first nine months of the year, the miner produced 29.7 million carats, up 12% year on year. Rough sales for the January-to-September period fell 34% to $2.39 billion.

Alrosa’s sales grew 9% year on year to 264.4 million in October, as prices and demand continued to stabilize, the miner noted. Rough-diamond sales increased 9% to $253.9 million for the month, while polished jumped 17% to $10.4 million.

However, despite the growth in October, weakness in the market affected the company’s ten-month total. In the first ten months of the year, sales fell 31% to $2.7 billion. Rough-diamond sales dropped 32% to $2.6 billion, with polished declining 43% to $47.2 million.

Source: Diamonds.net

Lest We Forget

On 11 November 1918, the guns of the Western Front fell silent after four years of continuous warfare.

With their armies retreating and close to collapse, German leaders signed an Armistice, bringing to an end the First World War.

From the summer of 1918, the five divisions of the Australian Corps had been at the forefront of the allied advance to victory.

Beginning with their stunning success at the battle of Hamel in July, they helped to turn the tide of the war at Amiens in August, followed by the capture of Mont St Quentin and Pèronne, and the breaching of German defences at the Hindenburg Line in September.

By early October the exhausted Australians were withdrawn from battle. They had achieved a fighting reputation out of proportion to their numbers, but victory had come at a heavy cost. They suffered almost 48,000 casualties during 1918, including more than 12,000 dead.

In the four years of the war more than 330,000 Australians had served overseas, and more than 60,000 of them had died.

The social effects of these losses cast a long shadow over the postwar decades.

Each year on this day Australians observe one minute’s silence at 11am, in memory of those who died or suffered in all wars and armed conflicts. Lest We Forget