Sarine recorded a $2.8m loss for 2023 as it battled macro-economic challenges in China and beyond, as well as increasing disruption from lab growns.
The Israel-based diamond tech business made an $8.8m profit the previous year. Revenue for 2023 was down 27 per cent to $42.9m.
Sarine said sales of equipment and the recurring scanning revenues that came from them had been hit by lower consumer demand and manufacturers’ reduced polishing activities.
Sales to India, its biggest single market by far, fell 27 per cent to $22m.
However it did sound a note of optimism after a “challenging year”, suggesting that a sharp fall in lab grown retail prices could lower retailers’ margins and make them less attractive.
“While it may be too early to call this a new trend, the slowdown could indicate that the natural diamond and LGD segments of the diamond jewellery market are reaching a new equilibrium,” the company said.
Sarine said it had launched its Most Valuable Plan (MVP) for the optimal planning of small rough diamonds and had adapted rough planning technologies to lab growns to attract new customers and generate additional recurring revenues.
The US and the UK will require importers of polished diamonds weighing 1 carat and above to apply a “self-certification” declaring the stones are not of Russian origin, while the UK will also expect documentary proof in some cases.
The new US guidelines are a follow-up to last month’s directive by the US Office of Foreign Assets Control (OFAC) implementing tighter restrictions on loose Russian diamonds and those set into jewelry that had been in part or fully manufactured or “substantially transformed” in another country. The rules address a loophole that had been in place since the US first imposed sanctions in March 2022.
The US Customs and Border Protection released an update to the bans beginning March 1, calling for importers to upload a PDF on official company letterhead, it said last week. For nonindustrial diamonds, the self-certification should state: “I certify that the nonindustrial diamonds in this shipment were not mined, extracted, produced, or manufactured wholly or in part in the Russian Federation, notwithstanding whether such diamonds have been substantially transformed into other products outside of the Russian Federation.”
Those bringing in diamond jewelry or unsorted diamonds should submit a document saying: “I certify that the diamond jewelry and unsorted diamonds in this shipment are not of Russian Federation origin or were not exported from the Russian Federation.”
The UK government’s Department for Business and Trade has followed suit, noting that supplier declaration of compliance with the sanctions “may be acceptable,” but that “traders should be prepared to provide documentation to demonstrate evidence of a stone’s supply chain.” That evidence can include the original Kimberley Process (KP) certificate issued when shipped from the diamond’s origin country, an invoice, a certificate of origin issued by a chamber of commerce, or a diamond origin report. The government also distributed rules for diamonds manufactured in another country that were outside of Russia before March 1.
Last week, the London Diamond Bourse (LDB) held an emergency meeting to discuss the ban due to the “absence of clarity and guidance…as to how we might conform with the restrictions…in terms of paperwork and provenance” before the March 1 launch, it said. The exchange noted it was in an “invidious” position and felt its members and the greater trade should avoid importing polished loose diamonds above 1 carat until there is “less ambiguous guidance.” The bourse may put out updated guidance following the release of the new rules.
While neither the US or the UK has given a timeline as to how long these guidelines will be in effect, it’s likely the less restrictive rules will only be valid during the “sunrise period,” which ends August 31 and allows importers time to become accustomed to the new measures. The European Union has stated that it would accept documentation proving non-Russian origin during the initial timeframe but will expect all stones passing through Antwerp to be placed on a traceability system beginning September 1. At that point, restrictions in all Group of Seven (G7) nations — Canada, France, Germany, Italy, Japan, the US and the UK, as well as the EU — will expand to include diamonds weighing more than 0.50 carats.
For its part, Canada also produced a statement noting it would comply with the March 1 curbs against indirect imports of Russian-origin diamonds.
“Canada has been at the forefront of imposing economic barriers on the Putin regime,” said Mélanie Joly, the country’s minister of foreign affairs. “Along with our allies and partners, we have imposed severe sanctions on the Russian regime, and we will continue to do so to hold [Russian President Vladimir] Putin and his enablers to account.”
The current self-certification rules are likely to provide a temporary solution to concerns industry groups voiced over a proposal that all diamonds would be funneled through Antwerp for screening and certification prior to arriving at their destination countries, a move the organizations feared would harm the rest of the industry.
On Saturday, India’s Gem and Jewellery Export Promotion Council (GJEPC) sent a message to members urging them to “review guidelines meticulously,” and “exercise utmost caution when dispatching shipments to G7 countries.” The council also advised exporters to “maintain meticulous records of all documents of import and purchase.” A large portion of the world’s rough is manufactured in the country before making its way to consumer nations.
“It is crucial to emphasize that while some of the G7 countries/EU have already issued guidelines to their importers, a few are still in the process of finalizing theirs,” the GJEPC said. “We believe even the issued ones are initial guidelines and are subject to changes [and] updates during the course of time.”
Alrosa’s revenue rose in 2023 as the Russian diamond miner continued to sell despite sanctions.
Sales increased 9% to RUB 322.57 billion ($3.55 billion) for the year, the company reported Wednesday. However, net profit fell 15% to RUB 85.18 billion ($939.3 million).
Alrosa and its diamonds have been the subject of sanctions by the US and other Western countries since Russia’s war in Ukraine began in February 2022. Major markets including India and China still permit imports of Russian diamonds. On March 1, the US will introduce stricter measures banning the import of 1-carat and larger stones of Russian origin, even if they went through manufacturing in a third country.
The miner’s announcement was its second full results statement since March 2022. On both occasions, it withheld information on the destination of its sales, which usually shows Belgium, the United Arab Emirates (UAE) and India to be the largest buyers.
Last week, De Beers reported a 36% drop in 2023 revenue for a total of $4.27 billion, with the diamond unit recording a net impairment of $1.56 billion, reflecting a weaker demand outlook.
Russia’s sanctions-hit diamond producer Alrosa, opens new tab on Wednesday reported 2023 net profit of $925 million, down 15.2% from the previous year, Turnover was up 9.2% at 322.6 billion roubles.
Group of Seven leaders agreed in December to ban non-industrial diamonds from Russia by January, and Russian diamonds sold by third countries from March.
The European Union added Alrosa, Russia’s biggest diamond producer, to its sanctions list in January as part of punitive measures it has imposed on Moscow over the war in Ukraine.
GIA says it has expanded its new verification service – aimed at combating “cloned diamond” fraud – to all its labs.
The Report Confirmation Service was launched last month in New York to identify lab growns being submitted for regrading as natural diamonds.
GIA says the service is now available at all locations. It will accept walk-in and courier submissions, will turn around loose diamonds in as little as 15 minutes, and will, initially, make no charge.
The service is available for GIA-graded diamonds with and without inscriptions. An original GIA cert is helpful but not essential.
An increasing number of lab growns are being fraudulently submitted for re-grading. They are cut to match the specifications of natural diamonds that have already been graded and inscribed with either with a GIA number (genuine or fake).
“Combatting this fraud is vital to protecting the public and ensuring their confidence in gems and jewelry – this is GIA’s mission,” said GIA president and CEO Susan Jacques.
The US Treasury has imposed sanctions against nearly 300 Russian entities in its latest round, including a company specializing in the export of rough and polished diamonds.
The new series of restrictions the Office of Foreign Assets Control (OFAC) has applied marks the two-year anniversary of Russia’s invasion of Ukraine, and is also in response to the death of opposition politician and anti-corruption activist Aleksei Navalny, the Treasury said last week.
OFAC has targeted Almazyuvelirexport, Russia’s state-owned exporter of rough and polished diamonds and precious metals. The company was designated for “operating, or having operated, in the metals and mining sector of the Russian Federation economy,” it added.
Other companies that were banned included financial institutions, the defense industry, companies “providing backdoor support for Russia’s war machine,” and those connected to Navalny’s imprisonment.
Lucara Diamond Corp. has announced the recovery of a 320-carat, 111-carat, and two +50-carat stones from its 100% owned Karowe Diamond Mine located in Botswana.
These diamonds were recovered from the direct milling of EM/PK(S) kimberlite ore from the South Lobe during a recent production run that saw additional recoveries of numerous, smaller +10.8 carat diamonds of high value.
The 320-carat is a gem-quality, top light brown diamond, while the 111-carat diamond is described as a Type IIa white stone of high quality. The two +50-carat stones add to these recent recoveries and are also Type IIa white diamonds. These recoveries add to the collection of significant diamonds recovered at Karowe and further solidifies Lucara’s reputation as a leader in the recovery of large, high-quality diamonds.
The recoveries from the EM/PK(S) unit highlight the continued success of Lucara’s mining operations at the Karowe Diamond Mine and reinforce the development of the underground mine which will target >95% EM/PK(S) ore during the first three years of underground production. The company’s adoption of advanced diamond recovery technology has enabled the continued identification and retrieval of these extraordinary diamonds and strong resource performance.
William Lamb, President and CEO of Lucara Diamond Corp., commented on the recent discoveries, stating:
“These diamond recoveries from the EM/PK(S) domain of the South Lobe further validate the quality and potential of the Karowe Diamond Mine. We are thrilled with the consistent success we continue to achieve in uncovering large, high-value diamonds, reaffirming Lucara’s position as a leading producer of large high-quality gem diamonds. Our team’s dedication to innovation and operational excellence continues to drive our success, and we look forward to delivering further value to our stakeholders through these extraordinary discoveries.”
The Gemological Institute of America (GIA) has launched a new laboratory in the Dubai Multi Commodities Centre (DMCC).
The location opened on February 19, the GIA said Tuesday. The lab will provide services only for clients operating in Dubai’s free trade zones and will be unable to accept submissions from other areas in the emirate, the GIA explained. However, in the near future the location will be able to accept intake from additional countries.
“The establishment of the GIA DMCC laboratory…adds significant value not only for our free-zone members but also for the wider industry, particularly when it comes to speeding up cycle times,” said Ahmed bin Sulayem, executive chairman and CEO of the DMCC.
The new Dubai lab will grade diamonds ranging in color from D to Z and weighing up to 3.99 carats, the GIA added.
Lucara Diamond has revived a gem sales agreement with polishing and trading company HB Antwerp, it said on Monday, five months after severing ties with the Belgian business.
Canadian miner Lucara said it will supply HB Antwerp with rough diamonds of 10.8 carats and above for 10 years from last December.
Lucara had terminated its relationship with HB Antwerp last September because of what it said was “a material breach of financial commitments”.
HB Antwerp declined to comment on the matter at the time and did not respond immediately to a request for comment on Monday.
Botswana, where Lucara mines diamonds at its Karowe project, has been reassessing plans to acquire 24% of HB Antwerp.
The two companies’ first diamond sales agreement was struck in 2020 and extended for 10 years in 2022.
Lucara said the purchase price for rough stones in its revised deal would be based on mutual agreement of the estimated value of polished diamonds, with a further payment based on actual achieved polished sales.
The pricing mechanism is expected to deliver regular cash flow, Lucara said.
“This partnership reflects our commitment to ensuring stability and sustainability in our operations,” said Lucara chief executive William Lamb.
Gem Diamonds Limited (LSE: GEMD) is pleased to announce the recovery of a high quality 113 carat white Type II diamond, recovered at the Letšeng mine in Lesotho on 17 February 2024.
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Together with the 295 carat high quality Type II white diamond recovered on 8 January 2024 and a 139 carat low quality Boart diamond recovered on 17 January 2024, the 113 carat is the third greater than 100 carat diamond recovered to date this year.
