Alrosa reports strong diamond sales despite sanctions

Mirny Sakha Russia

Sanctions-hit Alrosa kept diamond sales in the first half of 2023 at the year-ago levels, the Russian company said on Monday as it reported financial results for the first time since Moscow’s 2022 invasion of Ukraine.

Efforts to reduce Russia’s revenue from diamond exports and to build on Washington’s existing sanctions on Alrosa, the world’s largest producer, have been subject to discussions among leaders of the Group of Seven (G7) nations.

Alrosa’s first-half revenue totalled 188.2 billion roubles ($1.9 billion), up 0.2% from January-June 2022, and up 3.5% from the same period of 2021. Net profit fell 35% year-on-year to 55.6 billion roubles.

“As of mid-2023, opportunistic diamond midstream participants have developed trade mechanisms to circumvent the impact of the restrictions, especially as it pertains to the trading of Russian diamonds in US dollars,” diamond analyst Paul Zimnisky said.

In April 2022, the United States cut Alrosa off from its banking system and banned direct sales to the lucrative US market. The European Union bought 1.4 billion euros ($1.5 billion) worth of Russian diamonds in 2022 as it has neither banned Russian diamond imports nor Alrosa.

As of now, once the Russian diamonds are cut and polished outside of Russia, they are considered originating from the nation that “transformed” them, Zimnisky added.

While some G7 countries have called for Russian diamond sanctions, others, including Belgium, have been concerned that they would divert trading to other centres and away from Antwerp, the world’s No. 1 one hub.

The G7 said in May it would continue working to restrict Russian diamonds trade, including through tracing technologies.

Zimnisky expects G7 to prepare a plan which would impact the global flow of Russian diamonds by late 2023 or early 2024.

“The diamond industry has had time to digest all of this, so while I do not expect a pending supply shock, I do see the way that the diamond supply chain works to be fundamentally transformed in the medium term,” he said.

Source: mining.com

US Blocks $26m of India Diamond Payments to Russia

The US has reportedly blocked $26m of payments made by Indian businesses attempting to buy rough diamonds from Russia.

OFAC, the Office of Foreign Assets Control, is said to have instructed banks in recent months to halt the transfer of funds, mostly from UAE subsidiaries of Indian companies.

Neither India nor the UAE has sanctioned rough diamonds from Russia. The US has, although its ban does not apply to diamonds cut and polished outside Russia.

Leaders of the G7 nations concluded their summit in Hiroshima, Japan, in May without the clear mandate to fully sanction Russian diamonds that many had expected.

The US is believed to have halted the bank transfers over suspicions they were being made to sanctioned entities in Russia, but industry representatives in India insist otherwise.

The Gem & Jewellery Export Promotion Council (GJEPC) is lobbying the Indian Ministry of Commerce and the Indian embassy in the UAE to resolve matters.

Vipul Shah, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), told Economic Times: “We are trying to explain to OFAC that the payments were made to non-sanctioned entities and even to some Russian entities well before the sanctions came into place. There is very little direct import of diamonds from Russia.”

The $26m of blocked purchases represent only a small proportion of the average $1.3bn of rough a month that India has been importing from all sources (GJEPC figures for April to June).

Source: IDEX

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

Petra’s Sales Slide Amid Large-Stone Scarcity

Petra Diamonds’ sales dropped 44% for the full fiscal year as the miner recovered a lower proportion of high-value stones and pushed off its final tender due to low demand.

Revenue fell to $328.4 million for the 12 months ending June 30, the company reported Tuesday. Sales volume decreased 34% to 2.3 million carats.

The company, which operates the Cullinan, Finsch and Koffiefontein mines in South Africa, as well as the Williamson mine in Tanzania, attributed the decline to a drop in the number of large and exceptional diamonds it sold during the year. The segment contributed only $12.6 million in revenue for the year, compared to $89.1 million in fiscal 2022.

Petra also postponed its sixth and final tender of the financial year as a result of lower rough prices and deferred the sale of 75,900 carats of predominantly higher-value stones from its fifth tender, it explained. A drop in production also hit sales, as the miner had lower availability of rough to offer.

In the fourth fiscal quarter, from April to June, Petra’s rough prices grew 2% on a like-for-like basis versus the same period a year ago, it said. Meanwhile, the miner’s inventories increased to 715,200 carats at the end of the quarter as a result of the deferrals, up from 381,700 on June 30, 2022.

“Our strong balance sheet and flexible sales process enabled us to postpone the majority of our…rough-diamond sales [for the sixth tender] into fiscal year 2024 on the back of what we believe to be a temporary slowdown in demand for rough diamonds,” said Petra CEO Richard Duffy. “We continue to expect a supportive diamond market in the medium to longer terms as a result of the structural supply deficit, which will benefit our strong growth profile.”

Production fell 20% to 2.7 million carats for the fiscal year due to the recovery of lower-grade ore at Cullinan and Finsch. That total was just under the miner’s previous guidance of between 2.75 million and 2.85 million carats for the year.

Petra now expects output for the new fiscal year ending June 2024 to be between 2.9 million and 3.2 million carats, down from the 3 million to 3.3 million carats it previously forecast. It has also lowered its guidance for fiscal 2025 to the 3.4 million and 3.7 million carat range, rather than the 3.6 million to 3.9 million carats it originally estimated. The decrease is the result of a slower-than-expected ramp-up at both Cullinan and Finsch following a delay in work to extend the mines, Petra added.

Source: Diamonds.net

30ct. Pink Diamond Garners Record Sum for Tender House

A 29.52-carat pink diamond went for more than $8 million at South Africa-based Pioneer Diamond Tender House, the highest price for any stone the company has sold.

The fancy-vivid-pink, type II rough — named the Protea Pink after South Africa’s national flower of the same color — raked in $271,307 per carat, Pioneer said Wednesday.

A junior mining company recovered the diamond from a deposit on the banks of the middle Orange River, according to Lyndon de Meillon, a shareholder in Pioneer. The stone is believed to come from a 90 million-year-old Lesotho kimberlite that broke off and made its way down the river, where it got trapped in a terrace approximately 500 kilometers from its original location, he explained.

“This unique diamond…once again showcased why the alluvial diamond deposits of South Africa represent the highest and most consistent value-per-carat diamond supply in the world,” de Meillon added.

Source: rapaport

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

Lucapa Chief to Exit After Nearly a Decade

Nick Selby will take on the role of interim CEO at Lucapa Diamond Company when Stephen Wetherall steps down as managing director at the end of the month.

Selby, who has been with the miner since 2017, is currently executive director of operations. He will lead the company while it searches for a replacement, Lucapa said Monday.

Wetherall will continue to work with Lucapa as an independent consultant following his exit, helping to further the miner’s diamond marketing and downstream initiatives. He joined the company — which operates the Lulo mine in Angola and the Mothae deposit in Lesotho — in 2016. Wetherall was instrumental in creating a manufacturing deal with Graff unit Safdico, and in Lucapa’s acquisition of the Merlin diamond project in Australia.

“I have thrived on the challenges put to me by the board and shareholders,” said Wetherall in the Monday statement. “We have together navigated the company successfully through a difficult pandemic, repaid all the project interest-bearing debt, successfully delivered and expanded two mining operations now generating solid margins, positioned the company for growth with future production from Merlin, and our kimberlite exploration program at Lulo is at an advanced and exciting phase. This is an appropriate time for me to take on other challenges.”

Source: rapaport

Lucapa Recovers Another +100-ct Diamond at Lulo

Lucapa has recovered a 180.87-carat Type IIa white diamond at its Lulo alluvial mine, in Angola.

It’s the second +100 carat diamond of the year so far. In February it found a 150-carat Type IIa D-color white diamond.

And it’s the 37th +100 carat since since the Australian miner began commercial production at Lulo in 2015.

Last November the 170.2-carat Lulo Rose, believed to be the largest pink diamond found in the last 300 years, was sold at tender for an undisclosed sum.

Lucapa, which also operates the Mothae mine, in Lesotho, has reported encouraging exploration results from its ongoing exploration program to discover the primary kimberlite source at Lulo.

Pic of the 180.87-carat Type IIa white diamond, courtesy Lucapa

Souce: IDEX

Graff celebrates yellow diamonds

In celebration of Haute Couture Week, Graff is exhibiting a collection of yellow diamonds at its flagship Paris boutique to complement the unveiling of its new high jewellery necklace

Launched yesterday (4 July 2023), visitors to Sunrise: A Celebration of Graff Yellow Diamonds will discover a world of rarity and lustre through a stunning showcase of high jewellery pieces featuring rare yellow diamonds, accompanied by displays detailing Graff’s storied history with these incomparable stones.

The House’s latest high jewellery creation features an extremely rare 30ct fancy intense yellow pear shape diamond, accompanied by a further 138ct of yellow and white diamonds.

Every element of the piece has been created using the stone-led design techniques for which the Graff atelier is renowned and has been crafted to emphasise the elegant silhouette of the centre stone.

Graff design director, Anne-Eva Geffroy explained: “Before we design, we study each diamond carefully to uncover the secrets that lie within its depths.

“Only then do we design, and when we do, we work to accentuate the natural beauty of each stone.

“The fancy intense yellow diamond set into this piece gives a golden sunshine glow.

“Yellow diamonds bring so much joy.

“It is an honour to be inspired by stones that radiate such beauty.

“The yellow diamonds we work with are exceptional in quality, cut, and quantity.

“Very few jewellers have the luxury of such a wide range of colour.”

In vibrant halos of yellow and white diamonds, stones radiate outwards from the central fancy intense yellow diamond to replicate the rays of the sun.

A perfect synthesis of diamond design and hand-craftsmanship, each bespoke setting has been meticulously assembled by master artisans within the House’s London workshop.

CEO of Graff, Francois Graff added: “Celebrating Graff’s legacy of innovation and leadership in presenting the highest quality rare diamonds, this will be the most significant collection of yellow diamonds that have ever been brought together in one place, including a fancy intense yellow stone of incomparable beauty.

“These are truly jewels that represent the very best of Graff.”

Further pieces on display in the showcase at the flagship Paris boutique include unique high jewellery necklaces, Tribal-inspired jewels, earrings, and single-stone rings that unmistakably express Graff’s design DNA through the combination of superb stones with bold designs and unparalleled craftsmanship.

An impressive roster of important and famous yellow diamonds have passed through the House over the course of its history, beginning with the Star of Bombay in 1974.

The Star of Bombay is an historical yellow stone that was re-cut and polished by Graff using revolutionary expertise and new techniques.

Since then, Graff has introduced many famous and historical yellow diamonds over the years, including the 118.08ct Delaire Sunrise and the 132.55ct honey-hued Golden Empress.

Sunrise: A Celebration of Graff Yellow Diamonds is currently exhibiting at Graff Rue Saint-Honoré throughout Haute Couture Week in Paris.

Source: professionaljeweller