Gem Diamonds’ revenue in Q1 2022 (ending March 2022) has gone up 4% quarter-on-quarter and 19% year-on-year to $52.1 million, IDEX Online reports.
The miner, which owns 70% of the Letseng mine in Lesotho, sold 28,461 carats during the quarter – a rise when compared to the 24,790 carats it sold in the previous quarter. However, prices fell from $2,018 to $1,831, according to the report.
Clifford Elphick, Gem Diamonds’ CEO, said: “We remain confident about the outlook for diamond prices, particularly for Letseng’s large high-value diamonds with an average price of $1,831 per carat achieved during the period. Prices achieved on a like-for-like basis continued the largely upward trend from 2021.”
Christie’s will offer a 103.49-carat diamond that could fetch up to $18 million at its upcoming New York sale.
The emerald-cut, D-Flawless, type IIa stone, called the Light of Africa diamond, will headline the auction house’s Magnificent Jewels sale on June 8, it said Monday. It will be among the items featured as part of Christie’s luxury week.
The diamond was cut from a 299.3-carat rough Petra Diamonds recovered from its Cullinan mine in South Africa in January 2021. Petra then sold the diamond to Dubai-based diamond-sourcing and supply company Stargems DMCC in March of that year for $12.18 million. It is the third-largest high-quality white diamond recovered from Cullinan since Petra acquired it in 2008, the miner noted.
Christie’s will preview the diamond in Geneva from May 6 to 11, followed by Hong Kong from May 22 to 24, before showing it in New York between June 3 and 7.
Star Diamond has completed a study into the abundance of Type IIa diamonds in parcels recovered from the Early Joli Fou geological units at the Orion North (K120, K147 and K148) and Taurus kimberlites (K118, K122 and K150).
The pipes are located within the Fort a la Corne diamond district of central Saskatchewan, including the Star–Orion South diamond project, on properties held in a joint venture with Rio Tinto Exploration Canada.
These diamond parcels were recovered by Star Diamond between 2006 and 2008 from 120-cm diameter drilling programs. The latest study confirms that unusually high proportions of Type IIa diamonds are present in both the Orion North and Taurus kimberlites.
Of particular note is the high proportion of Type IIa diamonds in the Orion North 147-148 EJF (52%), of which 66% of the 24 stones, 0.66 carats and above are Type IIa. The largest Type IIa diamond identified was a 6.88-carat stone from Orion North (K147-K148 EJF).
Senior technical advisor George Read said that the Type IIa diamonds at Orion North and Taurus are top white in colour, Type IIa diamonds are rare and account for less than 2% of all natural rough diamonds mined from kimberlites. Many high-value, top colour, large specials (greater than 10.8 carats) are Type IIa diamonds, which include all 10 of the largest known rough diamonds recovered worldwide.
The study also confirms and augments an earlier study of Type IIa diamonds being present in the Fort a la Corne kimberlites with Star (26.5%) and Orion South (12.5%).
A target for further exploration completed by Star Diamond in 2014 estimated that between 881 million and 1.04 billion tonnes of the major EJF units, containing between 46 and 79 million carats, occur within the Orion North and Taurus kimberlite clusters.
Orion North (K147, K148 and K220) alone is estimated to contain between 340 million and 410 million tonnes of EJF kimberlite with an estimated range of grade of 2.75 to 8.37 carats per hundred tonnes.
A record blue diamond co-owned by De Beers far outstripped its presale estimate in a stand-alone sale at Sotheby’s in Hong Kong, garnering HKD 450.9 million ($57.5 million), the auction house said Wednesday.
The 15.10-carat De Beers Cullinan Blue diamond
The step-cut, 15.10-carat, fancy-vivid-blue, internally flawless stone, called the De Beers Cullinan Blue, is the largest of its color to appear at auction. The stone, which sold to an unnamed buyer, had been expected to fetch up to $48 million.
Petra Diamonds discovered the 39.35-carat rough in April 2021 at its Cullinan mine in South Africa. In July, De Beers and Diacore bought the stone for $40.2 million, and Diacore manufactured the piece into the final polished.
39.35 carat rough blue diamond
To date, only five blue diamonds weighing more than 10 carats have come to auction, none of which has exceeded 15 carats, Sotheby’s explained. Similar blue diamonds have also fetched high prices, including the Blue Moon of Josephine, a cushion-shaped, 12.03-carat, fancy-vivid-blue, internally flawless diamond that sold for $48.5 million at Sotheby’s Geneva in 2015. Meanwhile, the Oppenheimer Blue, a step-cut, 14.62-carat, fancy-vivid-blue, VVS1-clarity stone, garnered $57.5 million at a Christie’s Geneva sale in 2016.
De Beers is to start diamond exploration in Angola later this year after signing two mineral investment contracts with the Angolan government but the secretive group is giving little away on the details of the agreements.
De Beers announced today that the two licences covering prospects in the north-east of the country are for the “award and exercise of mineral rights covering all stages of diamond resource development from exploration to mining and span a period of 35 years.”
But the group does not specify its shareholding in the new developments which are joint ventures with Endiama – the Angolan government’s state-owned diamond company.
In a statement De Beers said only that “De Beers Group will hold a substantial majority in the new companies, with Endiama having the ability to incrementally increase its equity share over time in line with certain conditions outlined in the shareholder agreements, albeit with De Beers Group maintaining a substantial majority.”
By contrast, when Rio Tinto announced it was returning to Angola in October last year it specified that it would hold a 75% stake in the first phase of any mine developed with Endiama holding 25% but that the contract left open the possibility of Endiama increasing its holding to 49%.
De Beers’ return to Angola represents a breakthrough for the country following the regulatory and policy changes made by the government of President Joao Lourenco who replaced former president Jose Eduardo dos Santos in 2017.
Angola is arguably the most prospective country in the world in which to look for a major new diamond deposit but De Beers and most other diamond explorers left the country in the early 2000’s.
That was because of the repressive business conditions imposed by Dos Santos. These included a ban on any foreign company owning a majority interest in the diamond projects it was developing.
De Beers CEO Bruce Cleaver commented that, “Angola has worked hard in recent years to create a stable and attractive investment environment and we are pleased to be returning to active exploration in the country.
“Angola remains highly prospective and we look forward to being part of this next stage in the development of Angola’s diamond sector.”
One of the world’s largest yellow diamonds weighing 205.7 ct and known as the Red Cross Diamond is to be auctioned by Christie’s London.
The fancy intense yellow, cushion-shaped stone has a pavilion distinctively faceted in the shape of a Maltese cross.
The original rough gem was recovered by De Beers, in South Africa, in 1901 and was sold in 1918 in aid of the British Red Cross Society and the Order of St John.
It raised $13,000 equivalent to $780,000 in today’s money when it was sold at Christie’s London to the famous London firm S.J. Phillips.
It was sold again in November 1973, achieving CHF 1.8 million at Christie’s Geneva and returned to private ownership.
The diamond will again be offered for sale at Christie’s London on 11 May, with an undisclosed part of the sale revenue to be donated to the International Committee of the Red Cross.
We have asked Christie’s for the estimate, which is available “on request”.
De Beers is bringing its sales activities back to Botswana’s capital Gaborone, it said on Thursday, almost two years after the Covid-19 pandemic forced them to be held in cities including Antwerp and Dubai.
The Anglo American subsidiary had moved its pre-sale viewings – a marketing exercise to showcase its new batch of diamonds – from Botswana in May 2020 when travel restrictions to curb the pandemic prevented its international customers from flying to the Southern African country.
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Customers from across the world fly ten times a year to participate in week-long diamond sales, known as sights, in Botswana, which accounts for 90% of the company’s total annual sales.
“From March, we are bringing back the sights to Gaborone and we look forward to meeting again as an industry after a long time,” De Beers Executive Vice-President Diamond Trading Paul Rowley told a press briefing.
“We will of course maintain some flexibility for some customers who will still not be able to come to Botswana.”
The return is expected to bring in valuable foreign exchange to Botswana, which had lost out additional earnings from travel, hospitality and ancillary services, even though sales income still came to the country.
The majority of diamond mining in the country is done by Debswana, a company jointly held by De Beers and the Botswana government, which sells 75% of the diamonds mined to De Beers. The remaining 25% of the diamonds is sold to state-owned Okavango Diamond Company.
Apart from the large business delegations who visit the country ten times a year, the pre-sale viewings are known to attract more than 100 high net worth diamond magnates who spend heavily in the country.
De Beers’ rough prices spiked in the first half of 2021 as supply shortages coincided with buoyant diamond demand at the trade and retail levels.
The miner’s price index rose 14% during the six months, reflecting “tightness in inventories across the diamond value chain, as well as positive consumer demand for polished diamonds,” parent company Anglo American said Tuesday.
De Beers implemented price increases at its January, February and June sights, with an emphasis on the larger categories of rough. This brought prices back to pre-pandemic levels: The index for the first half was flat versus the same period of 2020, the company reported.
Sales volume at De Beers rose to 7.3 million carats in the second quarter from just 300,000 carats a year earlier during the peak of the coronavirus crisis. The average sales price advanced 13% to $135 per carat as demand shifted to higher-value rough.
“Consumer demand for polished diamonds continued to recover, leading to strong demand for rough diamonds from midstream cutting and polishing centers, despite the impact on capacity from the severe Covid-19 wave in India during April and May,” the miner said.
Meanwhile, production more than doubled to 8.2 million carats for the quarter versus 3.5 million carats last year, reflecting planned increases to meet the stronger rough demand, as well as the sharp impact of lockdowns in southern Africa in 2020.
With half of 2021 now over, De Beers was able to give a more specific production outlook for the full year, predicting output of 32 million to 33 million carats — compared with a previous plan of 32 million to 34 million carats. The company has already reduced its guidance for the year twice because of operational issues at mines.
“Most of the impact on production for the year as a whole is a result of the challenges we experienced earlier in the year, particularly with excessive rainfall in southern Africa, the Covid-19-related shutdown in Canada, and power supply disruptions in Botswana,” a De Beers spokesperson commented. “We still expect production in the second half of the year to be significantly above the 15.4 million carats produced in the first half of the year, however, and this will take us to the narrower guided range.”
In the second quarter, output in Botswana more than tripled to 5.7 million carats from 1.8 million carats a year before. Production in Namibia slipped 6% to 338,000 carats, as one of the company’s mining vessels underwent planned maintenance and another remained demobilized.
Output in South Africa more than doubled to 1.3 million carats from 555,000 because the company processed higher-grade ore at the Venetia mine. Canada’s production climbed 14% to 899,000 carats, mainly reflecting the comparison with last year’s slowdown.
De Beers increased prices of goods above 2 carats at this week’s sight as shortages of rough coincided with strong polished demand.
Prices rose around 5%, and more in some categories, market insiders told Rapaport News on Monday. Near-gem items also saw significant increases, while prices for other stones under 2 carats were either stable or slightly up.
“They seem to have picked areas where they’ve seen room [for price growth], and they’ve just hiked the prices up,” a source in the rough sector said on condition of anonymity. “For the time being, the market is absorbing it.”
Rough trading has been strong in recent weeks because of reduced supply from the large miners and solid polished sales. The RapNet Diamond Index (RAPI™) for 1-carat diamonds has risen 2.5% since May 1.
Rough above 1 carat has been especially sought-after, with premiums on the secondary market rising while manufacturers look to fill inventory gaps. A backlog of grading submissions at the Gemological Institute of America (GIA) has exacerbated the situation.
The June sight value will be similar to last month’s $380 million as customers snap up the limited goods available at the sale, sources said. Proceeds were higher earlier in the year — peaking at $663 million in January — when manufacturers restocked after the holidays and De Beers had larger volumes available to sell.
“There’s a shortfall in goods,” an executive at an Indian sightholder said Monday. “They’re not able to serve everyone what they’re entitled to.”
Rough demand slumped during the 2020 coronavirus crisis as the global supply chain froze. De Beers chose to maintain prices until August, when it offered deep discounts to encourage sightholders to resume buying. It has since reversed those cuts, gradually bringing prices to above pre-pandemic levels in many categories.
The sight began on Monday and runs until Friday. De Beers was not available for comment at press time.
Rough-diamond demand was robust at this week’s De Beers sight despite the ongoing Covid-19 crisis in India, customers reported.
Manufacturers snapped up the limited supply in anticipation of rough shortages, sources told Rapaport News. Sales will still be 10% to 25% lower than the previous cycle in March because of reduced availability, they estimated. That translates to a sight value of $330 million to $400 million.
“People are buying from the miners and the big sources, thinking that there will probably be tenders that will be canceled,” a sightholder said. “There is the perceived idea that there’s going to be a shortage in certain goods. People are as eager to buy rough as they were four weeks ago.”
De Beers is not offering any ex-plan goods — those over and above customers’ prearranged allocations — the sources added. The miner has fewer diamonds available for clients after reducing its inventories during a strong first quarter for the rough trade, when it sold 13.5 million carats against production of 7.2 million carats. It has suffered operational difficulties at some of its Botswana deposits, exacerbated by a temporary shutdown at its Gahcho Kué mine in Canada.
“If De Beers offered 20% more [goods at the sight], I think the market would eat it up,” a rough-sector insider commented.
Less manufacturing
While India’s diamond and jewelry sector has received permission to operate during the country’s several coronavirus wave, manufacturing levels have slumped by between 10% and 50% in the past month. This has resulted from capacity restrictions and absenteeism, with smaller sizes seeing a sharper downturn.
Companies that manufacture larger goods operate in factories with more space for social distancing and are able to retain workers by offering higher pay, a sightholder explained. Many employees who produce smaller stones have left Surat and returned to their hometowns for health reasons.
“My production is down by a little less than 10%, but for people who are in smalls, their production has been severely hit, and is probably down by more than 30%,” said an executive at a large-stone manufacturer.
In line with this, the market for large rough has survived better than the small-stone segment, sources explained.
“Anything in [0.75 carats] or up, it’s in big demand,” a customer noted. “You can sell whatever you want.”
Meanwhile, polished demand has strengthened as companies anticipate lower availability alongside steady retail sales. A backlog at the Gemological Institute of America (GIA) has also affected the supply situation, with the turnaround time standing at around a month for the Mumbai laboratory and a little more in Surat.
“Due to the supply scarcity, people are stocking [up on] some of the goods, so demand is high, and will remain strong for a month or so,” another manufacturer said.
India’s virus outbreak has seen activity shift to other global centers. Many large manufacturers relocated their buying teams to Dubai before travel restrictions went into effect, enabling them to continue obtaining rough for their factories, reported Trans Atlantic Gem Sales (TAGS), a tender house located in the emirate.
New contract
De Beers’ weeklong May sight, its fourth of the year, began on Monday, featuring viewings in Dubai, Antwerp and Tel Aviv. The session is also the first under a new supply contract that came into effect on April 1.
The agreement sees the miner offer proportionately more goods to manufacturers rather than dealers in an effort to limit the reselling of boxes. Sightholders expected sluggish rough trading on the secondary market this month as a result.
Certain assortments have also changed, with 8-grainer (2-carat) rough now forming part of a category of larger stones ranging from 2 carats upward, sightholders noted. The size was previously in a 4- to 8-grainer (1- to 2-carat) box, which will now become 4- to 6-grainers (1 to 1.50 carats).
“This was focused both on responding to sightholders’ commercial needs and ensuring we have the most coherent offering for beneficiation customers,” a De Beers spokesperson said.
Customers forecast stable pricing at the sight following successive increases from December to February.
