A pair of pear-shaped fancy pink pendant diamond earrings, weighing 11.17 carats and 10.85 carats, are to be sold at Sotheby’s Hong Kong.
The estimate is $5.48m to $7.01m. Both diamonds are GIA-certified as Fancy Pink, Natural Color, VVS1 Clarity.
The pink diamonds are set in platinum and yellow gold suspended from a pear, marquise-shaped and brilliant-cut diamond surmount weighing a total of approximately 6.5-7.5cts, mostly F-H color, average VS-SI clarity.
The lead tomorrow’s Magnificent Jewels I. The sale also includes a Harry Winston diamond fringe necklace with nine pear-shaped diamonds weighing 14.93 to 2.04 carats (estimate $4.46m to $6.37m) and a 5.49-carat fancy intense blue diamond ring (estimate $4.84m to $6.37m).
ussia condemned what it called a push to “politicise” its diamonds over the conflict in Ukraine and said attempts to question its compliance with the international diamond certification scheme were “totally unfounded” and “far-fetched”.
The Kimberley Process, a coalition of governments, the diamond industry and civil society responsible for certifying diamonds as conflict-free, is split over a push by Ukraine and others to expand its definition of conflict diamonds to include those funding aggression by states.
The KP Civil Society Coalition (CSC) and some member states sought to discuss whether Russia’s diamonds were helping to fund the war in Ukraine during a KP meeting in Botswana last week.
“The Russian Federation absolutely condemns the orchestrated attempts of CSC, backed by absolute minority of some Western participants, to politicize the work of the Kimberley Process by deliberately distorting or even openly replacing its basic principles,” Russia’s finance ministry said in an emailed statement. It did not specify which principles it felt were being distorted or replaced.
The CSC did not immediately respond to an emailed request for comment.
The KP defines conflict diamonds as those that fund rebel movements seeking to overthrow legitimate governments, a narrow definition that many have sought to widen since the KP was founded in 2003.
Russia, which was KP chair last year, has “championed” work on revising the definition of conflict diamonds for the past five years, the finance ministry said, and it is committed to continuing talks on the definition.
“We therefore call on our opponents to refrain from further speculative accusations, abstain from political demagoguery and concentrate on the substantive work of the KP,” the finance ministry said.
The KP makes all decisions by consensus and the rift over Russia and Ukraine could jeopardise its effectiveness.
Russia may buy an as yet undetermined amount of rough diamonds from sanctions-hit producer Alrosa through its state precious metals and gems repository Gokhran, the country’s Finance Minister Anton Siluanov said on Wednesday.
The United States imposed sanctions on state-controlled Alrosa in April, complicating the Russian company’s operations in the global diamond market, with the aim of cutting off a source of revenue for Russia.
“We do not rule out the possibility of Gokhran purchasing diamonds produced by Alrosa. The amount will be determined later,” Siluanov told reporters.
Gokhran is generally more focused on purchases of precious metals from Russian domestic producers than diamonds, he added.
Alrosa, the world’s largest producer of rough diamonds, was behind about 30% of global output in 2021 and competes with Anglo American unit De Beers.
Its sales, mainly to Belgium, India and the United Arab Emirates, totalled $4.2 billion in 2021.
Gokhran bought diamonds worth $1 billion from Alrosa during years of weak demand caused by the global financial crisis.
Russian miner Alrosa has suspended its membership in the Responsible Jewellery Council (RJC), both organizations announced last week.
The development came just over a month after Russia’s invasion of Ukraine. The RJC board of directors voted to accept Alrosa’s decision, the standards groups said Friday.
Alrosa exited the RJC board in early March, but remained a member of the organization. RJC received criticism for not removing the company: Last week, luxury group Richemont and jeweler Pandora both stood down from the organization in protest, while RJC executive director Iris Van der Veken resigned over the issue.
The organization defended itself, noting that it was waiting for the outcome of a legal review.
“Beginning on March 3, the [RJC] board immediately began a comprehensive, third-party legal review to ensure it had the appropriate authority, within its constitutional documents, to take action,” the RJC statement continued. “The law firm selected — having concluded its own standard conflict of interest assessment — commenced their review of RJC’s governance, the board’s authorities, training modules and many other documents and processes.”
Sanctions by the US and UK governments during February and March complicated the situation and delayed completion of the review, the RJC explained. The board received the final document in the middle of last week.
“Taking any action prior to the delivery of the legal opinion would have exposed the RJC to significant legal risk,” it argued.
Alrosa — in which the Russian government owns a 33% stake — confirmed its suspension, saying it cared for the industry “as much as it cares for its mining communities.”
The company “believes in the diamond industry and the people who work to make it great all over the globe,” the statement continued. “We are one of the major contributors to the sustainable development of this industry. We will continue to uphold our highest standards of responsible business conduct and business ethics that are an integral part of our culture and principles.”
Alrosa has highlighted concerns about the impact of the US’s punitive measures after reporting its strongest annual earnings in five years.
Revenue jumped 51% to RUB 326.97 billion ($2.99 billion) in 2021 as the diamond market recovered from the previous year’s downturn, the Russian miner reported Wednesday. This drove net profit to RUB 91.32 billion ($834 million), almost triple 2020’s figure of RUB 32.25 billion ($297.3 million).
However, the fallout from Russia’s invasion of Ukraine has become the most pressing issue for the company, with the US imposing sanctions on Alrosa and its CEO, Sergey Ivanov. This blocks American firms from extending credit to the miner. An alliance of Western governments has also excluded several Russian banks from the Swift international payment system.
“These sanctions are preventing the group from obtaining financing from persons and entities connected to US and from effecting payments through sanctioned banks,” Alrosa said in its results statement.
Management said it was continuing to run the business as usual and “service its obligations,” but noted that the impact of the actions was unpredictable.
In the fourth quarter of last year, revenue fell 28% year on year to RUB 70.73 billion ($642.7 million), reflecting an unfavorable comparison with the sharp market rebound a year earlier as well as scarcities of goods for the company to sell. Profit slid 43% to RUB 12.14 billion ($111.1 million).
With rough in short supply globally, Alrosa made a slight increase to its 2022 production plan, forecasting output of 34.3 million carats, compared with earlier guidance of 33 million to 34 million carats.
The US has imposed sanctions on Alrosa and its CEO, Sergey S. Ivanov, in response to Russia’s invasion of Ukraine.
The diamond miner is one of 11 entities the Department of the Treasury has identified as being owned by or connected to the Russian government, according to a Thursday statement. The measures restrict American companies’ ability to engage in debt and equity transactions with Alrosa after Russia launched military action in Ukraine last week.
“Effectively, this action bans US businesses and persons from entering into debt transactions longer than 14 days with Alrosa but does not impose the harsher sanctions of an asset freeze and outright prohibition of all business,” the Jewelers Vigilance Committee (JVC), a source of legal guidance for the industry, said in an alert to members. “For the jewelry industry, any open memo agreements previously entered into with terms longer than 14 days should immediately be amended to shorten the terms, and/or closed.”
US companies should also evaluate any current transactions with Alrosa or its stateside affiliate, Alrosa USA, to ensure they do not violate the sanctions, the JVC added. The executive order does not apply to goods acquired from Alrosa or Alrosa USA before February 24, the organization pointed out.
Alrosa, a third of which is owned by the Russian state, is responsible for 90% of Russia’s diamond-mining capacity, the Treasury noted. The sanctions include Ivanov because the US counts him among the “leaders, officials, senior executive officers, or members of the board of directors” of the Russian government, and because he is the son of sanctioned official Sergei B. Ivanov, a close ally of Russian President Vladimir Putin, the statement continued.
“Treasury is taking serious and unprecedented action to deliver swift and severe consequences to the Kremlin and significantly impair their ability to use the Russian economy and financial system to further their malign activity,” said US Treasury Secretary Janet Yellen. “Our actions, taken in coordination with partners and allies, will degrade Russia’s ability to project power and threaten the peace and stability of Europe.”
Alrosa said its interactions with international partners would continue and that it was working to avoid any impact.
“Alrosa is carefully studying new working conditions in connection with the imposed sanctions,” a spokesperson for the miner told Rapaport News Sunday. “We intend to offer all our stakeholders the best possible service. We do our best to fulfil our obligations so that their businesses would continue to operate as usual.”
Alrosa’s Spirit of the Rose has achieved the highest price for any purple-pink diamond, selling to an anonymous bidder for nearly $27 million at Sotheby’s Geneva.
The oval modified brilliant-cut, 14.83-carat, fancy-vivid-purple-pink, internally flawless, type II stone, named for the famous Russian ballet, sold for $26.6 million, beating its low estimate of $23 million. The diamond, which fetched $1.8 million per carat, led the Magnificent Jewels and Noble Jewels live auction Wednesday, which garnered $52.2 million in total, Sotheby’s said.
The purchase comes on the heels of the recent closure of Rio Tinto’s Argyle mine in Australia, which produced more than 90% of the world’s pink diamonds. Prices for stones of that color are likely to soar in the coming years, experts have noted.
“The Spirit of the Rose caught the imagination of everyone who had the chance to see it,” said Benoit Repellin, head of the Sotheby’s Geneva Magnificent Jewels auction. “With its size, beautiful color, perfect cut and oval shape, it is a wonder of nature, steeped in Russia’s century-long diamond tradition and cultural heritage. It fully deserves the price achieved tonight, which is also testament to the growing appreciation and awareness of the great scarcity of pink diamonds around the world.”
Sotheby’s also saw strong prices for white diamonds at the auction, with 10 out of 11 stones on offer selling above their estimates. A cushion-shaped, 18.03-carat, D-color, flawless, type IIa diamond fetched $1.9 million against a high estimate of $1.1 million, while a pear-shaped, 102.41-carat, light-brown diamond of VVS2 clarity brought in $1.3 million, exceeding its high valuation.
Noble jewels were in demand as well, Sotheby’s said, led by a Colombian emerald and diamond parure from the collection of the first Marquis de Guirior, viceroy of New Granada and viceroy of Peru. That piece also surpassed its high estimate, fetching $1.1 million.
Russian diamond producer Alrosa said on Monday that its rough and polished diamond sales totalled $35.8 million in July, down 79% from a year earlier after the coronavirus pandemic hit demand and the supply chain.
It marked a fourth consecutive month of weak sales as falling demand and supply chain disruptions since March have prompted Alrosa and other producers to reduce output and relax payment terms for clients.
Alrosa’s sales rose from $31.3 million in June but still were only a fraction of the usual sales of the world’s largest producer of rough diamonds. Its sales in July 2019 totalled $170.5 million.
The state-controlled firm has previously said that it was prepared for months of weak sales and that in coming months it will discuss with Russia’s finance ministry whether state precious metals and gems repository Gokhran could buy $0.5 billion-$1 billion of the firm’s rough diamonds.
The finance ministry is yet to take the final decision but is positive about the possibility of such a deal, the Kommersant newspaper reported on Monday, citing an unnamed source at the ministry.
Such a deal would help to improve the situation in the market, as it did in 2008-2009 when Gokhran bought diamonds worth $1 billion from Alrosa during the global financial crisis, the source told Kommersant.
Russia’s Alrosa, the world’s top diamond producer by output, is temporarily suspending production at two assets as demand and sales for diamonds continues to drop.
Major consumers, including China and the United States, are struggling with economic headwinds caused by the global covid-19 pandemic. Extended lockdowns affecting key players in the supply chain, including polishers and top retailers, has only made things worse.
The Russian state-controlled miner said the dire state of the market would force it to halt its Aikhal underground mine and Zarya open pit from May 15 to September 30 and to December 30, respectively.
The two assets account for roughly 7% of the company’s diamond output in carat terms. They produced 2.6 million carats of rough diamonds last year.
Personnel of suspended operations and auxiliary services will be partially laid-off, Alrosa said. The remaining employees will be transferred to other assets or stay to keep up maintenance work at the idled operations.
The diamond giant said in March it may revise down its output guidance for 2020, which currently sits at 34.2 million carats. In 2019, it produced 38.5 million carats.
Russia-based diamond miner Alrosa produced eight-million carats of diamonds and sold 9.4-million carats in the first quarter of the year.
The company generated sales revenues of $904-million from rough and polished diamonds.
This was despite diamond production seasonally declining by 9% quarter-on-quarter, although year-on-year diamond production growth was 2%. The year-on-year growth was supported by increased production at the company’s Jubilee pipe, as well as at the Aikhal and international underground mines.
Alrosa says the average realised prices for gem-quality diamonds in the first quarter was $123/ct, which was down 17% quarter-on-quarter and flat year-on-year.
The company maintains its full-year production guidance of 34.2-million carats, but says sales volumes will depend on the Covid-19 epidemiological situation and respective measures taken globally.
Alrosa says the diamond industry started the year off in good shape as consumer sentiment had improved across key markets for diamond jewellery, while inventories at the midstream had normalised and polished diamond prices began to recover.
However, following closures of markets in China and Hong Kong in February, and then later in Europe and the US, demand started to weaken.
Alrosa says it might need to update its production and prices data during the year, depending on what happens in the market.
