News – Page 89 – The Diamond Certification Laboratory of Australia (DCLA)

Alrosa finds first large coloured diamond at new Yakutia mine

17.44 carat diamond found at the Verkhne-Munskoye deposit

Russia’s Alrosa, the world’s top diamond miner by output, has found a 17.4-carat bright yellow gem-quality precious rock at its new Verkhne-Munskoye deposit in Yakutia, which started operations in 2018.

The diamond, recovered in mid-February from the Zapolyarnaya kimberlite pipe, is the first large coloured stone found at the site, the company said.

Alrosa, which did not disclose the estimated value of the diamond, said it would be assessed and evaluated by its experts in coming days.

Diamond miners and traders have been hit hard in the past year by weak market conditions. These factors have taken a major toll on producers of small stones due to an oversupply in that segment.

De Beers reported Thursday its worst set of earnings since Anglo American (LON:AAL) acquired it in 2012.

The world’s No. 1 diamond miner by market cap said demand for rough diamonds from polishers and cutters was weak last year due to the impact of US-China trade tension and the closure of US retail outlets. Many companies in the so-called midstream are struggling to obtain financing, it said.

Alrosa believes the situation is about to change as it’s already seeing the first signs of stabilization in the sector.

Increasing demand for synthetic diamonds has also weighed on prices. Man-made diamonds require less investment than mining natural stones and can offer more attractive margins.

Industry consultant Bain & Co., however, believes that while glut that’s depressing the diamond market will probably be cleared early this year, it will take at least another 12 months for the market to fully recover.

“The industry’s first and strongest opportunity to rebalance and regain growth will be 2021,” said Bain in a report released in December, adding that supply could fall 8% that year.

Source: mining.com

De Beers Optimistic After 2019 Earnings Slump

Rough and polished diamonds next to each other at De Beers

De Beers gave a positive outlook for 2020 due to an improvement in the industry’s inventory situation, despite growing concerns about Chinese demand.

Early data from the holiday season indicate midstream stock levels are more balanced than they were, the company reported Thursday in parent company Anglo American’s annual financial results.

The miner maintained its production forecast of 32 million to 34 million carats for the year, citing a “currently anticipated improvement in trading conditions compared with 2019.”

Last year was the worst for De Beers in the past decade, as rough demand plummeted amid an oversupply of polished in the manufacturing and trading sector.

The miner reported that underlying earnings slid 87% to $45 million, while revenue fell 24% to $4.61 billion, its lowest level since the financial crisis.

Rough sales declined 26% to $4 billion, with volume down 8% to 30.9 million carats. De Beers’ average selling price slumped 20% to $137 per carat, reflecting a 6% decline in like-for-like rough prices, as well as weak demand for higher-value diamonds.

Sales from other divisions, which include the Element Six industrial-diamond unit and Lightbox, its lab-grown brand, fell 17% to approximately $570 million, according to Rapaport calculations.

Last year started on a weak note, as stock-market volatility and the US-China trade war led to sluggish 2018 holiday sales, leaving the trade with higher stock levels than it had expected, the company explained.

The situation worsened as US retailers took more goods on memo and pruned their physical-store networks, while consumers shifted further to online buying, reducing the need for inventory.

The midstream also suffered from tight bank financing, dampening demand for more rough, De Beers noted.

De Beers observed “stable” consumer demand so far in 2020, especially in the US, but cautioned that several uncertainties — including the coronavirus outbreak — could pose a threat.

An increase in online purchasing has caused retailers to destock, while US-China trade tensions and geopolitical escalations in the Middle East could also affect economic growth and consumer sentiment, the company added.

Source: Diamonds.net

The invisible engraving that could see you save hundreds of dollars on wedding ring insurance

Diamond grader Roy Cohen is urging Australians to get diamond rings engraved
He argued a serial number on diamond girdle could stop illegal pawn shop sale
Insurance premiums can also be reduced for jewellery inscribed with a code

A romantic marriage proposal is a significant milestone in many people’s lives.

Engagement rings can also cost tens of thousands of dollars and are commonly stolen in home invasions.

Jewellery experts are urging engaged couples to get the girdle of the diamond engraved so they can’t as easily be pawned.

This microscopic serial number could be enough to get the ring returned, and save newlyweds potentially hundreds of dollars a year in insurance premiums.

Roy Cohen, a third-generation diamond grader originally from South Africa, said these minute inscriptions increased the chance of a stolen ring being reunited with its rightful owner.

‘It’s invisible to the naked eye, it can only be seen with magnification but it’s basically a serial number,’ he told Daily Mail Australia.

‘Usually what happens is, at any pawn shop, they will take a jeweller’s loupe and they will actually have a look at the item.

‘If there’s a certificate number on the girdle of the diamond and the diamond’s been sold without the certificate, usually that does raise alarm bells.’

Mr Cohen, the director of Diamond Certification Laboratory of Australia, said engraved serial numbers on diamonds could be checked against a database, arguing this was more effective than leaving a diamond un-engraved and relying on police detective work to find a stolen item.

‘If somebody steals a diamond ring from a house in Sydney and then goes to sell it in Melbourne, there’s no way that they’re going to get found out because there’s not a lot of co-operation between states,’ he said.

His DCLA company began inscribing diamond rings in Australia in 2001, following his move from Johannesburg to Sydney.

It has now formed a partnership with underwriter Woodina to form Certified Diamond Insurance, which only insures jewellery with an inscribed serial number.

Mr Cohen, who has three decades of experience as a diamond grader, vowed customers could save up to 50 per cent off their premiums compared to traditional home and content packages.

A diamond ring worth $10,000 can be insured for $306 a year.

Jewellery is the third most stolen item stolen from Australian homes, after cash and laptops, an analysis of official burglary figures by insurer Budget Direct found.

Source: dailymail.co.uk

Retail margins could be boosting man-made diamond sales

Rough lab created diamonds left and natural Rough Diamonds right

Lower prices and marketed ethical and sustainable benefits relative to that of natural diamonds has been the prominent narrative around man-made diamonds, but a seemingly less obvious factor is also likely helping to drive the product: the profit margin they offer retailers.

When analysing the wholesale and retail prices of unbranded man-made and natural diamonds, it appears that the retail gross margin of man-made diamonds in popular carat-sizes is as much as 1.8-times that of natural diamonds.

To further quantify this, for example, in some cases a retailer would theoretically only have to sell US$5,000 worth of man-made diamonds to generate the same gross profit as selling almost $10,000 worth of equivalent natural diamonds. Here, “gross margin” is considered to be a retailer’s top-line profit when selling a diamond, that is the sales price relative to the wholesale cost of the diamond.

This is an important metric for a retailer selling both man-made and natural diamonds because the theoretical high gross profit margin of man-made diamonds serves as an implied incentivise to prioritise selling man-made diamonds over natural, as long as the profit margin differential remains in place.

Further, given that retailers are the direct point of contact between a consumer and a diamond, retailers may be more inclined to promote the beneficial attributes of a man-made stone over a natural, thereby influencing a customer’s longer-term perception of the products.

Despite the significant growth in the availability of man-made diamond jewellery in recent years, it is estimated that still only one in five diamond retailers in the US carry man-made diamonds; and outside of the US the figure is even (much) smaller.

Further, many of the jewellers and other retailers that do carry man-made diamonds only have limited inventory as customer appetite for the product is tested. This has perhaps allowed the few retailers that do carry man-made diamonds, especially those that are more fully stocked, to charge premiums.

Further, given the relatively lower-production costs of man-made diamonds compared to that of natural (especially notable in larger carat-sizes given that man-made diamonds are a manufactured good), it is theoretically more affordable for the supply chain to offer man-made diamonds to retailers on memo (consignments). With goods on consignment, retailers typically have lower, or zero, inventory capital costs and can therefore be more selective in offering discounts to the consumer, perhaps resulting in more resilient profit margins.

However, going forward, as the man-made diamond jewellery complex matures, as new producers and better production technology increases supply and as more retailers compete downstream, especially those selling unbranded goods, the product will likely become more commoditised. Resultantly, retail margins could erode and eventually fall to within that of natural diamonds or even lower.

Source: mining-journal

De Beers Adds Grading Specs for Lightbox

Lightbox has added grading information for its synthetic white diamonds in an effort by the De Beers brand to bring further transparency to the lab-grown sector.

The company will provide technical specifications showing the minimum quality of its stones across cut, color, clarity and carat weight, Lightbox said Monday. It will include these descriptions with each white lab-grown diamond it sells, but will not grade each stone individually. The specifications are based on internationally recognized grading standards, the De Beers-owned company noted.

“This new feature is just one more way Lightbox can instill consumer confidence,” the company added.

An infographic with the information is also available on Lightbox’s website. Those specifications list its synthetic white diamonds to be “near colorless” or better, which the company defines as between G to J, meaning only a trained gemologist can detect a trace of color. The stones all have a minimum clarity of VS, and a cut of “very good.” The stones are still priced at $800 per carat.

Lightbox, which De Beers launched in 2018, does not currently intend to offer grading information for its blue or pink lab-grown diamonds.

Source: Diamonds.net

ALROSA sells 6 carat pink diamond

ALROSA has sold its 6.21-carat cushion cut fancy intense pink purple diamond to Larry West, a New York-based collector of exclusive pink diamonds.

The stone originates from Yakutia, where it was discovered and polished by ALROSA.

For over 40 years, Larry J. West, the owner of New York’s L.J. West Diamonds, has been searching for an extraordinary natural color diamonds. His collection has been featured in Natural History Museum of Los Angeles County and at auctions worldwide.

“As global production declines, pink diamonds will become rarer and thus more valuable,” West said in a statement.

To establish provenance, the collector received an electronic passport from ALROSA that includes a detailed visual history of the diamond’s extraction and production, as well as information about the craftsman’s background.

As part of the company’s traceability initiative, a short film is automatically generated on ALROSA’s digital platform based on information about each diamond available for purchase.

In September, ALROSA hosted its annual auction of colored stones in Hong Kong and sold over 200 diamonds. All stones sold at the auction were accompanied by a digital passport that contained information about the diamond’s origin.

Source: mining.com

Gold Demand Lifts Mood at India Jewelry Show

Exhibitors at IIJS Signature in Mumbai expressed confidence India’s wedding tradition and enduring love of gold would help the nation’s jewelry industry overcome its current difficulties.

Economic uncertainty, high gold prices, tight regulation and the outbreak of the coronavirus in China have created challenges for the Indian jewelry sector, traders told Rapaport News during the fair, which ended Sunday at the Bombay Exhibition Centre. But fundamental features of the country’s consumer market should help limit the impact, dealers said.

“Gold prices have always gone up,” said Mitesh Gajera, a director at Laxmi Dia Jewel, a Mumbai-based manufacturer, retailer and wholesaler of jewelry. “Gold is a form of investment for Indian people. People trust in gold prices.”

The yellow metal has gained around 20% in value over the past year as investors view the commodity as a safe haven during global economic uncertainty. While that has dampened Indians’ ability to buy, many consumers still see it as a strong investment and even as a currency, with the price growth sometimes boosting their willingness to splurge before the rate increases further.

“In the middle of the night, if you want money, you can immediately get cash [in exchange for gold],” explained Anand Shah, a jewelry designer and owner of Anand Shah Jewels.

Lower price points

However, a shift by consumers toward pieces with less gold content and thinner profit margins for jewelers have offset the rise in gold demand over the past year, exhibitors said. India’s 12.5% import duty on the precious material has intensified the problem, Shah added. The government’s decision to maintain that rate — as well as a 7.5% levy on polished diamonds — in its annual budget earlier this month disappointed the trade, which had been campaigning for a reduction.

The state of the important bridal market also presents a complex mix of positive and negative trends. Suppliers at IIJS Signature reported a strong wedding period so far, with the season running from November until May, providing selling opportunities at the show.

But while Indian nuptials continue to feature bold displays of expensive jewelry, making it a constant source of demand, wedding budgets have decreased due to the sluggish economy. Diamond consumption has suffered as Indians opt for smaller jewelry, with the average Indian bride now wearing around 15 carats in total weight on her big day, compared with 30 carats two years ago, estimated Hardik Shah, the executive director of BR Designs, a Surat-based jewelry manufacturer and retailer.

Less diamond content

“People who would have bought a 10-carat [total weight] necklace [seven or eight months ago] will now buy 5 carats,” added Rhishabh Solanki, a director at jewelry manufacturer Shashat Impex.

Indians’ sacrifice of diamond quantity has been especially evident in the important southern Indian market — cities such as Chennai, Bangalore and Hyderabad — where the relatively educated population is known for being quality-conscious.

Consumers there are shifting to lower gold weights and fewer diamonds in their wedding jewelry, but aren’t compromising on color and clarity, according to Nilesh Soni, head of marketing for the southern region at Mumbai-based jewelry manufacturer Neo Diamonds. They’re still insisting on D-to-F, VVS diamonds, he observed, noting that his company’s sales at the show were mainly of mid-range wedding necklaces with those specifications, Soni reported.

“[Retailers] wouldn’t buy a very high-range [item] because it may sell or may not,” he explained. “The mid-range is a safe investment.”

Jewelry beats diamonds

Finished-jewelry suppliers accounted for the vast majority of exhibitors at IIJS Signature, and came away happier than the loose-diamond suppliers, of which there were only a handful. Some well-known diamond companies were present but displayed their jewelry instead of loose stones.

“For jewelry, the fair has been fantastic,” noted Hitesh Choksi, a sales executive at Hari Krishna Exports, which used the event to display both its diamonds and its finished jewelry. The company benefited from buyers carrying out their initial inquiries and purchases ahead of the festive season, which begins in August.

Sales of loose stones were more muted, as the Indian diamond market is less focused on domestic shows, Hitesh Choski explained. The goods that did sell were mainly in the 1- to 1.50-carat, I-to-K, VS-to-SI categories, as many buyers were from northern India, where consumers tend to choose larger but lower-quality diamonds, he noted. Another loose-diamond exhibitor reported making no sales across the entire event.

Regulatory creep

Aside from the relatively steep import duties, India’s jewelry industry is struggling with regulations designed to clean up the trade, such as a requirement from January 2021 for all gold to carry a hallmark. This type of restriction favors larger companies, according to Milan Choksi, a partner at Tanvirkumar & Company.

“Organized players get the opportunity to take business from those that cannot [handle] the regulations that you need to comply with,” Milan Choksi said. “There are too many things for a smaller business [to cope with], so they’ve had to drop parts of their business. These areas are available for us to capture.”

China impact

Compounding the difficulties is a volatile global situation, with the US-China trade war, protests in Hong Kong and now the coronavirus denting Indian exports. Last week, India’s Gem & Jewellery Export Promotion Council (GJEPC) warned that the near shutdown of business in greater China had threatened to delay payments to suppliers. The situation had a negative effect on morale at IIJS Signature, as some 35% to 40% of India’s gem and jewelry export business is with Hong Kong and mainland China, according to figures from the GJEPC.

While it’s too early to assess the full impact, “let’s assume it’s really bad and the next six months will be challenging for the Far East,” Milan Choksi warned.

However, India remains in a strong position on the global stage amid the turbulence, noted Abhishek Sand, a partner at Jaipur-based jewelry manufacturer Savio Jewellery. It enjoys a good relationship with the US and is likely to increase its trade with America, Sand explained. Meanwhile, some Chinese jewelry manufacturers are moving operations to India because of lower US tariffs and the coronavirus, he reported.

“There’s a liking of the American government toward India,” Sand noted. Trump doesn’t have a trade war with India, he stressed.

Source: Diamonds.net

Fancy Pink Diamonds Have Soared 116% in Value over the Past 10 Years

FANCY PINK DIAMONDS soared 116% in value over the past decade, outpacing blues (81%) and yellows (21%), according to a report by the Fancy Color Research Foundation (FCRF), an Israel-based group that tracks diamond pricing data in the global trading centers of Hong Kong, New York and Tel Aviv.

While the overall index for fancy-color diamonds — across all their brilliant hues — increased by 77% from 2009 to 2019, it was the pink diamond category that stood out in the report.

Market watchers believe that the strength of the pink-diamond segment is attributed to the expected closure this year of the Argyle Diamond Mine, which has been operating in Western Australia for the past 37 years.

“Rio Tinto’s Argyle mine is the first and only ongoing source of rare pink diamonds in history,” said Rio Tinto Copper & Diamonds chief executive Arnaud Soirat in 2019. “With the lifecycle of this extraordinary mine approaching its end, we have seen, and continue to see, unstoppable demand for these truly limited-edition diamonds and strong value appreciation.”

Back in April of 2017, The Pink Star, a 59.6-carat, flawless, fancy vivid pink diamond, shattered the world record for the highest price ever paid for any gem at auction. The hammer price of $71.2 million at Sotheby’s Magnificent Jewels and Jadeite sale in Hong Kong easily surpassed the $57.5 million achieved in May of 2016 by the previous record-holder, the 14.62-carat Oppenheimer Blue diamond.

In November of 2018, the 18.96-carat Pink Legacy was purchased for $50.3 million at Christie’s Geneva, establishing a record per-carat price of $2.7 million for a fancy vivid pink diamond. The previous record holder was the 14.93-carat Pink Promise, which sold at auction for $2.2 million per carat in 2017.

FCRF advisory board member Jim Pounds explained why prices for fancy-color diamonds should remain strong: “From the mining perspective, we are currently experiencing a shortage in high-quality fancy-color rough and we therefore feel quite optimistic about the future.”

Source: instoremag

Angola’s Rough-Diamond Revenue Rises in 2019

Revenue from Angola’s national diamond-trading company, Sodiam, rose 6% in 2019 as the company sold a higher volume of rough goods.

Proceeds for the year came to $1.3 billion from the sale of 9 million carats of rough diamonds, compared with 8.4 million carats in 2018, the government said in a Facebook post last week. That offset a 10% drop in the average price to $137 per carat for the year.

The increase came despite weakness in the rough-diamond market in 2019, with many miners, including De Beers and Alrosa, reporting a decrease in sales.

Angola implemented a new, more competitive diamond-trading policy that allows miners to offer 60% of their production to clients of their choice rather than selling through the state trading company.

In the fourth quarter, Sodiam sold 3 million carats of rough for $409 million, at an average price of $136 per carat.

Source: Diamonds.net

India’s rough diamond imports fall sharply

Import of rough diamonds fell 15.54% in the first 10 months of this financial year, according to the Gem & Jewellery Export Promotion Council (GJEPC).

Industry executives anticipate a further fall of 10-15% in February and March, as manufacturers are not keen to build up inventory in the wake of coronavirus outbreak which has affected demand in the major markets of Hong Kong, mainland China and the Far East.

Meanwhile, Russia’s diamond miner Alrosa has granted flexibility

to India’s authorised bulk purchasers of rough diamonds to buy 55% of the contracted volume so that their inventory does not pile up. “The US-China trade war has impacted exports, which in turn has brought down imports of rough diamonds.

Slow demand in the world market has resulted in piling up inventories in FY20,” Colin Shah, vice-chairman, GJEPC, told ET. “Manufacturers wanted to clear their inventories first, before fres ..

fresh stocking. During the Christmas and New Year, there was good demand from the US and Europe and we were able to offload quite a substantial portion of our inventories.”

International agency Rapaport said in its recent report that the recent influx of rough diamonds in the market, coupled with the weakened outlook for China, had raised concerns that the trade would return to an oversupply of rough diamonds.

De Beers reported a 9% year-on-year increase in sales to $545

million in January, owing to firmer prices on select boxes of commercial-quality diamonds.

It said that mining companies were holding large quantities of rough diamonds which they could not sell in 2019. Production of rough diamonds is projected to decrease about 6% this year, although mining companies have enough inventory to offset the decline.