De Beers Loosens Buying Rules as Inventories Accumulate

De Beers will allow sightholders to defer up to half of rough purchases to early next year amid sluggish consumer demand and high midstream stockpiles, market insiders told Rapaport News Wednesday.

The miner wrote to customers on Friday, informing them that they could avoid buying parts of their allocations of 1-carat goods and larger for the rest of 2023, the sources said on condition of anonymity. The allowance is 25% by value for some boxes and 50% for others, and applies to sights 8 to 10 — which will take place in September, October and December.

The rule does not apply to the August sight, which runs this week in Botswana, they added.

De Beers does not usually let sightholders defer more than one box per category of rough diamonds in each half year. In normal circumstances, failure to buy can affect access to goods in future intention-to-offer (ITO) periods — the yearlong session for which allocations are planned.

The new concession is unusual because it allows buyers to push off purchases to a new ITO. De Beers did not specify when the final deadline would be in early 2024, the sources said.

However, it told clients they must buy at least 65% of the non-deferred goods or the deferred stones will count as refusals, the sources explained.

The move comes amid persistent weak retail sales in the US and China. Manufacturers have been carrying large inventories of the less salable polished, especially in the 0.30- to 2.99-carat sizes that originate from rough above 0.75 carats. 

“There is already a buildup of polished, and therefore there is enough…to fulfill the demand for the holiday,” said one of the sources. “[De Beers will] keep [the rough] for you rather than sightholders needing to buy it and store it themselves.”

Rough prices were stable at this week’s sight, while the buyback policy remains unchanged, the market participants noted. This allows clients to sell up to 10% or up to 30% of purchases back to De Beers, depending on the category.

“We continue to provide sightholders with elements of supply flexibility to support their business needs in response to evolving demand plans,” a De Beers spokesperson commented.

Source: Diamonds.net

China’s Gold Economy: Consumer desire for gold increases, desire for diamonds decreases

In the first half of this year, China consumed nearly 555 tons of gold, up more than 16 percent year-on-year. The trend has been described as a domestic gold craze. But diamonds seem to have lost their attraction, as the market size in China declined to 11.4 billion U.S. dollars in 2022, 2.5 billion dollars less than in 2021. Xu Hua has more from the southern Chinese city of Shenzhen, China’s biggest distribution center for wholesale jewelry.

XU HUA Shenzhen Shuibei Jewelry Market “We’re at Shenzhen’s Shuibei Jewelry Market, the biggest wholesale market of its kind in China. The market has been crowded with consumers from all over the country for months, as international gold prices continue to rise. Let’s go and see what the best seller is here.”

The hustle and bustle of the Shuibei Jewelry Market since the beginning of 2023 marked a strong comeback from last year. With attractive designs, diverse styles and low prices, dozens of deals can be reached in seconds.

YU WANLING Shenzhen Resident “Shuibei is well-known for its gold sales. The quality gold is more reassuring than other places.”

ZHENG CE Shenzhen Resident “We are about to get married. We prefer to buy some gold rather than diamonds for inheritance or for wearing.”

China’s domestic consumption of gold jewelry reached 555 tons in the first half of 2023. Among the gold consumption, the purchase of gold bars jumped 30 percent year-on-year to 146 tons, while that of gold jewelry reached 368 tons, up almost 15 percent from the same period last year.

HAO RUNSONG General Manager, Lidu Gold “In 2023, our gold sales increased by 20-30 percent compared with last year.”

By contrast, the doorways of neighboring diamond stores looked relatively lonely, as the precious gems lost some significant value over the last few months.

LIU JINGLI Manager, Yishidai Jewelry “The retail transaction volume of diamond inlays is relatively low, and the wholesale sales of our diamond inlays is also declining.”

ZHAO LI Director, The Gold Plaza Operation Center “The sales of diamond jewelry have declined slightly, partly due to falling prices, fewer marriages, the impact of cultivated diamonds, and changing buyer behaviour.”

For daily social needs, some consumers looked to art jewelry as an alternative to diamond jewelry.

HUANG WEIJUN Brand Director, Shenzhen REIEN Jewelry “Our sales of art jewelry in the first half of this year have increased by about 300 percent over the whole of last year.”

Some economists say the booming gold sales are a direct reflection of a gloomy economic outlook.

WU HAIFENG Executive Director, Shenzhen Institute of Data Economy “When people feel uncertainty about the future, especially on the economy, especially about the income growth, people will think to change their investments platform from a variety of the financial products to hard currencies such as gold, such as real estate.”

However, Wu says that the real estate market hasn’t looked good since the beginning of the last year, so Chinese consumers and investors have been looking at other products. Wu added proper stimulative policies are still needed to ensure a healthy market and economic rebound. Xu Hua, CGTN, Shenzhen, Guangdong Province.

555 carat Diamond Bought with Illicit Funds, SEC Says

Cryptocurrency mogul Richard Heart allegedly used proceeds from the sale of unregistered securities to buy the 555-carat Enigma diamond, according to the US Securities and Exchange Commission (SEC).

The SEC has charged Heart — who was born Richard Schueler and who created the Hex cryptocurrency token — with selling the securities to raise more than $1 billion from investors. It alleges that Heart and his PulseChain company committed fraud by misappropriating at least $12 million of those funds to purchase luxury items, including sports cars, watches and the diamond.

“Heart called on investors to buy crypto asset securities in offerings that he failed to register,” Eric Werner, director of the SEC’s Fort Worth regional office, said in a statement Monday. “He then defrauded those investors by spending some of their crypto assets on exorbitant luxury goods.”

The Enigma, which is believed to have come from outer space, is the largest faceted diamond of any kind to appear at auction. Heart purchased it from Sotheby’s at a one-off sale in February 2022 for GBP 3.2 million ($4.3 million). At the time, Heart tweeted that he had bought the stone and would rename it the Hex.com diamond as a nod to his cryptocurrency platform, calling it a “match made in heaven.” Hex has a “5555 day club” comprising people who hold 5,555-day Hex stakes — the longest possible stake in the electronic token.

Sotheby’s, which accepted payment for the Enigma, was not mentioned as a defendant in the SEC’s lawsuit.

“Sotheby’s does not comment on individual transactions, but we can confirm we have established due diligence procedures, tailored and updated to take account of our requirements to conduct business in compliance with applicable laws and regulations,” the auction house stated.

Source: Diamonds.net

Anglo announces latest De Beers’ rough diamond sales value

Anglo American plc announces the value of rough diamond sales (Global Sightholder Sales and Auctions) for De Beers’ sixth sales cycle of 2023, amounting to US$410 million.

The provisional rough diamond sales figure quoted for Cycle 6 represents the expected sales value for the period 10 and 25 July and remains subject to adjustment based on final completed sales.

Al Cook, CEO of De Beers, said: “In line with seasonal trends, rough diamond sales continued at a lower level during the sixth sales cycle of the year. Participants in the diamond industry’s midstream sector continue to take a cautious approach to purchases in light of ongoing macroeconomic challenges.”

Source: globalminingreview

De Beers Reduces Prices at Second Consecutive Sight

De Beers has sharply decreased its prices for select larger rough diamonds at this week’s sight, as the weak market has shown few signs of recovering.

The price cuts range from 5% to 15% in several categories for stones 0.75 carats and up, with an emphasis on 2-carat diamonds and larger, industry insiders told Rapaport News on Monday. Some of these goods already saw price reductions last month, they noted, while the 15% cuts are in a handful of sluggish categories that the miner left untouched in June.

De Beers has focused its adjustments on the lower-quality items for which demand has been especially slow, the sources said on condition of anonymity. Polished sales in SI to I2 clarities have slumped this year due to the overall weakness of US retail — the main market for this range — as well as competition from lab-grown diamonds.

The company also maintained its policy of allowing 30% buybacks for certain low-performing items, the industry sources said. Buybacks let sightholders sell a proportion of the rough they’ve purchased back to De Beers, allowing them to offload the stones that will generate the least profit. The limit is usually 10%.

De Beers declined to comment on the price changes.

The July sight — the sixth of the year — began Monday and runs through Friday in Gaborone, Botswana. It is the first sight since De Beers and the Botswana government announced a new 25-year mining license and a 10-year sales agreement that will see state-owned Okavango Diamond Company (ODC) gain access to 50% of the country’s rough over the course of 10 years.

The June session saw sales fall 32% year on year to $450 million after De Beers slashed prices of many categories above 1 carat. The negative trends that were present then have continued into July, with the seasonal US summer slowdown compounding the situation. Many manufacturers in India have lowered their polished production to around 50% capacity in response to low sales and tight margins. They have shifted to smaller, lower-value rough to keep factories running.

However, even a 15% price drop for rough is not enough to solve the problem, one executive at a sightholder company said Monday. “[Polished] prices have fallen more than that over the last couple of months. More importantly, there’s still no [foreseeable prospect] of sales. We are all still waiting for the US to wake up.”

Source: rapaport

Diamonds are for now: Botswana reach new deal with De Beers

Botswana has reached an eleventh-hour deal with diamond giant De Beers after months of tense negotiations that saw the continent’s top producer threatening to cut ties with the storied company.

The Botswana government and Anglo-American, the majority owner of De Beers, have reached an “agreement in principle”, the two sides said in a statement issued late Friday.

The agreement provides for a new 10-year agreement to sell the rough diamonds produced by Debswana — a joint venture equally owned by the government and De Beers — and a 25-year extension of its mining licenses.

The agreement also gives Botswana an increased 30 percent of diamond production for sale via the state-owned Okavango Diamond Company, progressively increasing to 50 percent in the final year of the contract, De Beers said in a separate statement on Saturday.

No value was given for the agreement.

The previous 2011 sale agreement between the southern African country, one of the continent’s richest, and the world’s largest diamond company by value, was extended exceptionally until June 30, 2023, due to the coronavirus pandemic.

Under terms negotiated by the two sides in 2011, De Beers received 90 percent of the rough diamonds mined, while Botswana had 10 percent to sell itself.

In 2020, Botswana’s share was hiked to 25 percent.

President Mokgweetsi Masisi had threatened to cut ties with the company if the latest talks proved unfavourable for his country.

“If we don’t achieve a win-win situation each party will have to pack its bags and go,” he said in February.

The country turned up the heat the following month by announcing it would soon conclude an agreement to take a 24 percent stake in the Belgian diamond manufacturer HB Antwerp.

Last year, De Beers obtained about 70 percent of its rough diamonds from Botswana.

Diamond mining accounts for a third of the landlocked country’s GDP.

Source: arynews

Junior miner recovers spectacular pink diamond from banks of Middle Orange River

JOHANNESBURG- A junior diamond mining company has recovered a spectacular pink diamond from the banks of the Middle Orange River.

The diamond, named Protea Pink, is a fancy pink, 29.52 ct type II diamond, with unusual depth of colour and exceptional clarity. Its colour is reminiscent of the pink hues found in South Africa’s national flower, the protea.

This diamond was most likely derived from the 90-million-year-old Lesotho kimberlites and made a remarkable journey down the Orange river to be trapped in an ancient river terrace, approximately 500 km from its source, South African Diamond Producers Organisation (Sadpo) vice-chairperson and geologist Lyndon de Meillon stated in a release to Mining Weekly.

Sadpo, an organisation that aims to streamline the diamond diggers industry, is headed by CEO Yamkela Makupula, who is a director of Pioneer Tender House, where Protea Pink will be sold on tender in South Africa during the week of 26/30 June. The sale will end on Friday 30 June.

The Middle Orange River, which is known as the area with the highest average value per carat in the world, also has the lowest grade in carat per hundred tonnes of any area actively mined, De Meillon explained.

The modern-day alluvial diamond miner utilises no chemicals in the recovery process and rehabilitation of the mining areas has been proven to improve the carrying capacity of the land, De Meillon added.

Unemployment rates in the area are alarmingly high, exceeding 70%, with mining operations, such as this one by a junior miner, playing a crucial role in supporting the local economy by providing job opportunities and stimulating economic growth.

The revenue generated from diamond mining can contribute to infrastructure development, education, healthcare, and other essential services in the community.

Source: miningweekly

De Beers Sales Slide as Slow Trading Continues

De Beers’ sales value fell this month as global rough demand weakened and the miner reduced prices of its larger stones.

Proceeds dropped 32% year on year to $450 million at 2023’s fifth sales cycle from $657 million in the equivalent period a year earlier, De Beers reported Wednesday. Sales declined 6% compared with the $479 million that the fourth cycle brought in. The total included the June sight as well as auction sales.

“Following the JCK [Las Vegas] show, and with ongoing global macroeconomic challenges continuing to impact end-client sentiment, the diamond industry remains cautious heading into summer,” said De Beers CEO Al Cook. “Reflecting this, we saw demand for De Beers rough diamonds during the fifth sales cycle of the year slightly softer than in the fourth cycle.”

De Beers lowered prices at the sight by 5% to 10% mainly in 2-carat categories and larger, as well as for some 1- to 1.5-carat items, market insiders said. It also extended its buyback program, which allows sightholders to sell goods back to the miner following the purchase.

This reflected weakness in the rough that produces polished above 0.30 carats, and especially the stones that yield 1-carat finished diamonds. These sizes are especially weak in the US market amid economic uncertainty and a lull in engagements, dealers explained. Rough under 0.75 carats has seen a mild recovery as Indian manufacturers look to fill their factories with low-cost material.

Source: rapaport.com

The Industry’s Diamond-Origin Conundrum

The Group of Seven (G7) meeting that took place in Japan in mid-May proved to be an anticlimax for the diamond trade.

The industry had expected a major announcement to come from the meeting relating to required declarations on the origin of diamonds imported to those countries — an additional measure that would help prevent polished diamonds sourced from Russian-origin rough entering their markets.

While a clear guideline did not emerge, the member nations — Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — pledged to work toward such measures.

“In order to reduce the revenues that Russia extracts from the export of diamonds, we will continue to restrict the trade in and use of diamonds mined, processed or produced in Russia,” the group said after the meeting.

As it stands, the US and the UK have implemented bans on diamonds sourced directly from Russia. However, the sanctions don’t account for “substantial transformation,” and consequently the manufacturing center is regarded as the source. For example, diamonds polished in Belgium, India, Israel or the United Arab Emirates (UAE) from Russian rough can technically be imported to the US.

Implementing such detailed declarations is proving more complicated than originally thought. Creating such mechanisms will take time, as Feriel Zerouki, the De Beers executive who heads the World Diamond Council (WDC), said in a recent panel discussion at the JCK Las Vegas show in early June. These measures would apply to the entire industry, seemingly requiring a disclosure of origin for all diamonds at customs.

“How do we support the [sanctions] without paralyzing the industry and making it very cumbersome for natural diamonds to enter the G7 countries,” Zerouki challenged the Las Vegas audience.

Setting standards
It’s a sensitive point for an already heavily audited industry, and for companies in each segment of the supply chain that would bear the added expense of verifying such information.

It’s also worth noting that the G7 cannot enact such requirements as a bloc. It will be left to each country to implement its own import rules. That said, there does at least seem to be an effort among those countries to apply some consistency in their systems. It was an open secret that members of various governments and industry bodies met in Las Vegas during the show to advance these discussions, which presumably covered a wide spectrum of industry-related issues.

Central to the talks must surely be the practicality of such declarations. What mechanisms are available to the industry that would facilitate traceability? And who verifies that these initiatives meet the required standards? And on what are those standards based?

The trade has at its disposal industry structures as well as company programs that tackle the challenge of traceability and source verification — although arguably nothing is foolproof.

See full article here

Lightbox Starts Selling Engagement Rings with Lab-Grown Diamonds

De Beers’ Lightbox lab-grown diamond brand is trialing sales of engagement rings, marking a major shift for the company, which previously insisted synthetic stones were not a product for important milestones.

The retailer is publicizing lab-grown diamond engagement rings on its home page, promising a “stress-free and risk-free” shopping experience. “Our cutting-edge technology ensures each of our lab-grown diamonds are quality guaranteed,” the site reads, with the marketing line: “Because great chemistry deserves great chemistry.”

A link takes viewers to a page listing 16 items featuring regular Lightbox lab-grown diamonds, or stones from the brand’s Finest line, which have higher color and clarity. The standard collection usually sells for $800 per carat plus the cost of the setting, while Finest retails at $1,500 per carat. The selection includes white, pink and blue stones, with prices ranging from $500 for a three-stone ring to $5,000 for 2 carats.

Lightbox was unavailable for comment on Sunday, but told Women’s Wear Daily (WWD) and JCK it was running “a small in-market test of consumer preferences in the lab-grown diamond engagement ring segment.”

When De Beers launched Lightbox in 2018, Bruce Cleaver, the miner’s CEO at the time, presented lab-grown as a product that “may not be forever, but is perfect for right now,” claimed there was “no real emotional value in lab-grown diamonds, because they’re not unique,” and said the stones did not warrant grading. It later debuted the Finest line, introduced stones larger than 1 carat, and started declaring the cut quality, color and clarity of its stones.

Source: Diamonds.net