The US has added the prominent jewelry brand Miuz and the diamond cutter Kristall to its list of sanctioned companies in Russia.
Kristall, Russia’s largest diamond cutter, is now on the Specially Designated Nationals (SDN) List administered by the US Treasury Department.
Alrosa, its parent company has been on the list since April 2022, shortly after Russia invaded Ukraine. Kristall, based in Smolensk, has been part of the Alrosa group since 2019.
Miuz Diamonds, which has production facilities in Moscow and Perm and a chain of 300 retail outlets, has also been added to the list.
Miuz is part of the Ruiz Group of diamond and jewelry enterprises, linked to Israeli billionaire Lev Leviev.
It is not clear why the companies were not sanctioned sooner.
Kristall and Miuz are among almost 400 individuals and entities in Russia and beyond its borders that were added to the SDN list last Friday (23 August).
“Russia has turned its economy into a tool in service of the Kremlin’s military industrial complex,” said Deputy Secretary of the Treasury Wally Adeyemo, announcing the additions.
“Treasury’s actions today continue to implement the commitments made by President Biden and his G7 counterparts to disrupt Russia’s military-industrial base supply chains and payment channels.”
The Office of Foreign Assets Control (OFAC) has issued new licenses under the Russian Harmful Foreign Activities Sanctions Regulations, allowing for the sale of diamond jewellery and loose gem-quality diamonds imported before recent sanctions were implemented. This significant policy shift permits goods that were previously prohibited to re-enter the market.
Under the new guidelines, diamond jewellery purchased before March 1, 2024, as well as loose diamonds of 1 carat or larger bought before that date, and those of at least 0.50 carats purchased before September 1, 2024, can now be sold. The relaxation for loose diamonds will remain in effect until September 1, 2025.
However, starting September 1, 2024, the next phase of G7 diamond sanctions will impose restrictions on all goods of 0.50 carats or above from Russia, regardless of where they are cut and polished. This phase of sanctions is set to take effect next Sunday, despite substantial opposition from various industry stakeholders.
In response, the Jewelers Vigilance Committee has reported that the United States is considering supporting a delay in the implementation of these sanctions. This potential delay, which aligns with the European Union’s proposed extension to March 1, 2025, aims to provide additional time to resolve the intricacies of the sanctions and their impact on the diamond trade.
Assessing the value of a diamond is a job that’s been done by eye for centuries.
But artificial intelligence (AI) is now so sophisticated that it can do the same task faster, cheaper and more accurately.
There can be a huge difference in value even between two diamonds of the same size. That’s why a whole industry has developed, dedicated to grading them.
But advances in machine learning have now made computers more reliable than humans, according to Sarine, a diamond-tech company based in Israel.
Today the vast majority of diamond manufacturers – the businesses that cut and polish rough gems – send their loose stones to grading labs.
They wait a couple of weeks for the diamonds to be returned with certificates listing their key attributes. And they typically pay at least $100 per diamond for the service (depending on size).
Sarine aims to dramatically cuts cost and delays by locating its automated eGrading technology inside factories in a lease arrangement.
Staff operate the machine, which can grade and certify a diamond in a matter of minutes.
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It’s as convenient as using an ATM, says Roni Ben-Ari, deputy CEO & VP products at Sarine.
He says the machines consistently deliver higher quality results than the best grading labs, without the expense of employing gemologists (gemstone experts) or paying for premises, infrastructure and other overheads.
Can’t cheat the system
You may be thinking the diamond factory gets to “mark its own homework” if the grading machine is inhouse, and that it could cheat the system to get a better grade.
But Ben-Ari is adamant that the system’s security is so tight it’s simply not possible for anyone to interfere.
Every diamond is unique – like a fingerprint, a snowflake or DNA – and every diamond is identified by full 360-degree images.
The raw data that Sarine’s machines gather is securely uploaded to the cloud, and only then converted into a grading report.
Grading diamonds objectively with Sarine’s eGrading system.
It’s worth considering what’s at stake here.
An absolute top-quality natural one-carat diamond (a popular size for engagement rings) could set you back $14,000. But you could get a poor-quality diamond of the same size for under $2,000. That’s why grading a diamond is so important.
The 4Cs
Four main criteria determine the value of a diamond. They’re known as the 4Cs – carat (weight), cut (how well the rough stone has been shaped), color (the best diamonds are colorless) and clarity (absence of flaws or blemishes).
Diamonds are valued on the basis of carat, cut, color and clarity.
Color and clarity are the hardest criteria to determine. Labs give diamonds a letter for color (from D to Z) and a label indicating one of 11 levels of clarity (from IF, internally flawless, to I3 for diamonds with the worst flaws or “inclusions”).
Weighing a diamond is straightforward, but the other three Cs can be subjective.
“I can guesstimate that if you sent the same 100 diamonds to the lab over and over again, around 70 percent would get the same grade,” says Ben-Ari.
That leaves 30% where a different lab, or a different day, or a different staff member could give the diamond a different grade – and a different value.
Sarine’s system uses AI to grade clarity.
A lot of biases
“The human eye is a muscle; it gets tired,” says Ben-Ari. “It’s affected by your physical conditions, whether you’re tired or angry, or it’s the beginning of the shift or the second half of the shift.
“There are a lot of biases. It’s very difficult to educate people from different cultures in different locations around the world to grade the same diamond in the same way.
“So the labs invented a very sophisticated process where two people grade the diamond. When they agree, that’s the diamond grade and when they don’t, they bring in a third person.”
But it’s a labor-intensive business. Sarine, already an established world leader in guiding diamond cutters to get the highest value from a rough gem, realized it could develop a better way of doing things.
Sarine’s loupe doesn’t get tired like a human eye would.
AI can grade diamonds
The company, founded in 1988 and based in Hod Hasharon, central Israel, embarked on the mammoth task of teaching AI how to grade diamonds.
That involved showing the AI model more than 30,000 diamonds that had already been graded by GIA (Gemological Institute of America) the world’s biggest lab. The more diamonds they showed it, the better the results.
Sarine introduced eGrading machines, using AI to grade diamonds.
Because Sarine deals in technology and not in physical diamonds, all those diamonds to train the computer model had to be borrowed.
That’s why Sarine’s first eGrading machines, installed in mid-2022, were located in factories in India, where over 90% of all diamonds are cut and polished.
“We started in southern India, where we have a facility with 400 employees to provide customer support,” says Ben-Ari.” The next step will be a rollout to Botswana and Namibia, both counties which mine and manufacture diamonds.”
Lab-grown diamonds
We’ve been talking so far about “natural” diamonds, but what about lab-grown diamonds?
Natural diamonds formed miles below the Earth’s surface under high pressure and high temperature in a process that took over more than a billion years.
Lab-grown diamonds are created within weeks, are optically and physically identical to natural diamonds, and now sell for a fraction of the price.
They have driven the need for cheaper grading because in many cases the cost of an ordinary certificate outweighs the cost of manufacturing the diamond.
There are, however, some complex technical differences between natural and lab-grown diamonds, which means Sarine technology can grade them in the lab but not yet remotely with eGrading at factories. Sarine is working on an AI fix for that.
LUCARA RECOVERS EPIC 2,492 CARAT DIAMOND FROM THE KAROWE MINE
Lucara Diamond Corp. (“Lucara” or the “Company”) is thrilled to announce the recovery of an exceptional 2,492 carat diamond from its Karowe Diamond Mine in Botswana. This remarkable find, one of the largest rough diamonds ever unearthed, was detected and recovered by the Company’s Mega Diamond Recovery (“MDR”) X-ray Transmission (“XRT”) technology, installed in 2017 to identify and preserve large, high-value diamonds. The stone was recovered from the processing of EM/PK(S) kimberlite, the dominant ore type that Lucara will continue to target during the first years of the Company’s underground mining operations.
This discovery underscores Karowe’s reputation as a world-class asset and reaffirms Lucara’s position as a leading producer of large, exceptional diamonds. This latest recovery joins an impressive roster of other significant finds from the mine, including the 1,758 carat Sewelô and the 1,109 carat Lesedi La Rona.
William Lamb, President and CEO of Lucara, commented on this historic discovery: “We are ecstatic about the recovery of this extraordinary 2,492 carat diamond. This find not only showcases the remarkable potential of our Karowe Mine, but also upholds our strategic investment in cutting-edge XRT technology. The ability to recover such a massive, high-quality stone intact demonstrates the effectiveness of our approach to diamond recovery and our commitment to maximizing value for our shareholders and stakeholders.”
Mr. Lamb added, “This discovery reinforces Karowe’s position as a truly world-class diamond mine and highlights the continued success of our operational and underground development strategy.”
Botswana’s diamond industry delivers wide-ranging socio-economic benefits to the country that extend well beyond the mining sector. Its influence supports national development by funding critical areas such as education and healthcare.
This discovery symbolizes Botswana’s continued ascent as a global leader in diamond production. It represents not only the unparalleled wealth found in Botswana’s soil, but also the remarkable progress the nation has made in developing its diamond industry for the benefit of its citizens.
This news release has been reviewed and approved by Dr. Lauren Freeman, PhD. Pr. Sci. Nat., Vice-President, Mineral Resources of the Company and a “Qualified Person” for the purposes of National Instrument 43-101.
Petra Diamonds has once again postponed the sale of roughs, holding on to the diamonds from its South African operations that would have been offered during the August/September event of the year, amid low demand.
The tender of diamonds from Petra’s Williamson mine in Tanzania will proceed as planned, the company said. It noted that this decision aimed to “support steps taken by major producers to restrict supply during this period of weaker demand.”
Rough diamond parcels from the miner’s South African operations, originally earmarked for sale as part of the first tender of fiscal year 2025, are now planned to be offered in the second tender, expected to close mid-October 2024.
Petra will sell diamonds from its Williamson mine in Tanzania during August/September as planned.
Petra’s South African producing operations include the Cullinan and Finsch mines.
“Our expectation is that supply discipline, together with the expected seasonally stronger demand as we head towards the festive season, will provide some pricing support later in the calendar year,” chief executive Richard Duffy said in the statement.
Petra had differed in June the majority of what would have been its sixth sale for its 2024 fiscal year to the August/September offering, or tender one of fiscal 2025.
The company said recent steps taken to improve its financial position have provided it with the ability to adjust the timing of its tenders based on market conditions.
The Index tracking fancy color diamond prices fell during the last quarter, for the first time in almost four years.
The Fancy Color Diamond Index, which monitors pricing data for of all sizes and intensities of fancy color diamonds, fell by 0.7 per cent during Q2 2024, according to an update published yesterday (30 July) by the Fancy Color Research Foundation (FCRF).
The last recorded fall was back in Q3 2020 – in the depths of the Covid crisis – when the Index also fell by 0.7 per cent. That came after two quarters when sales were too slow for the FCRF to produce figures at all.
The trend over the last year or so has been of slower growth. The Index was up 1.3 per cent in Q1 2023, followed by +0.5 per cent (Q2); +0.4 per cent (Q3); +0.1 per cent (Q4) and +0.1 per cent (Q1 2024).
The New York-based FCRF played down the Q2 dip, describing it as “a minor fluctuation when compared to broader market movements”.
It said in a statement: “This stability is particularly evident relative to the sharper declines in the white diamond market and the Dow Jones index, which fell by 3.6 per cent and 1.7 per cent respectively during the same period.
Yellow diamonds (all sizes, all intensities) suffered the biggest drop, down 1.7 per cent. Pinks and blues were both down 0.3 per cent.
The FCRF said its Index had enjoyed an overall increase of 211 per cent since it began compiling data in 2005. During that time it said the price of yellow diamonds had risen by 56 per cent, pinks by 398 per cent and blues by 248 per cent.
Lucapa Diamond announced Monday the recovery of the fifth +100 carat diamond found this year, a 176 carat Type IIa gem diamond from the Lulo alluvial mine in Angola.
The 176 carat diamond is the 45th +100 carat stone to be recovered from Lulo and the eighth largest, since alluvial operations began in 2015, the company said.
In 2021, Lucapa announced a 35% increase in the resource carats at Lulo, and the mine’s in-situ resource now sits at 135,900 carats at a modelled average diamond value of $1,440/carat.
176 carat diamond recovered from Lulo mine in July. Image from Lucapa.
The continual recovery of these and other large, high value diamonds has been a major source of revenue for Lulo over the years – in December 2023 Lucapa fetched $17 million for four diamonds recovered from Lulo – as well as being a major informant to the kimberlite exploration program.
Lucapa continues to hunt for the source of these large gems via the kimberlite exploration program which is currently bulk sampling kimberlitesin close proximity to the mining blocks where the 176 carat diamond was recovered.
“The recovery of this 176 carat diamond is yet more confirmation of the massive potential of the kimberlite province where we are focussing our exploration efforts to find the source(s) of these magnificent gems. As can be seen from the image below, the diamond has not travelled far as it still displays sharp, angular edges,” Lucapa CEO Nick Selby said in a news release.
The firm has a 40% stake in Lulo, which hosts the world’s highest dollar-per-carat alluvial diamonds. The rest is held by Angola’s national diamond company (Endiama) and Rosas & Petalas, a private entity.
Lucapa Diamond Company has sold six diamonds recovered from the Lulo mine, in Angola, in a special tender for $12.4-million.
The diamonds totalled 447 ct and consisted of five white Type IIa diamonds, as well as a pink diamond.
The average price per carat was about $27 700.
MD and CEO Nick Selby deems the tender result pleasing. “Our alluvial project, in Angola, continues to deliver fantastic diamonds that are always in demand through all market cycles and achieve very competitive values.”
India’s exports of polished diamonds suffered another hefty drop in June, down 26 per cent year-on-year to $1.02bn.
Foreign sales in May were down by almost 15 per cent to $1.47bn, according to new figures from the GJEPC (Gem and Jewellery Export Promotion Council).
Polished diamond exports have fallen every month this year, down 20 per cent in January, 28 per cent in February, 27 per cent in March and 17 per cent in April.
Gross imports of rough diamonds for April to June dropped by 15 per cent by value to $3.39bn and 6 per cent by volume.
Overall exports of all gems and jewelry declined by 15 per cent in June to $1.9bn.
Nirmala Sitharaman finance minister of india in a press confrence .
India’s diamond industry welcomed a raft of measures announced in today’s budget (23 July) which will encourage direct diamond sales from foreign mining companies and reduce tax on key raw materials.
Finance Minister Nirmala (pictured) said safe harbor rates would be introduced, providing fixed and favorable tax rates for rough purchases in the country’s SNZs (Special Notified Zones).
Safe harbor streamlines the taxation process and eliminates unexpected liabilities for foreign suppliers.
Sitharaman also announced significant tax reductions on gold and silver to 6 per cent (from 15 per cent and 10 per cent) and on platinum to 6.4 per cent (from 12.5 per cent) and the exemption of diamond sales from a 2 per cent equalization levy aimed at promoting sustainability.
“India is a world leader in the diamond cutting and polishing industry, which employs a large number of skilled workers,” Sitharaman said in her Budget speech.
“To further promote the development of this sector, we would provide for safe harbor rates for foreign mining companies selling raw diamonds in the country.”
“I want to applaud and congratulate the Central Government for their three-point game changing decisions for the gems and jewellery industry,” said Vipul Shah, chairman of GJEPC (Gem and Jewellery Export Promotion Council).
“The reduction of customs duty on gold and silver, exclusion of diamond sector from 2 per cent equalisation level and simplifying taxation rules in Special Notified Zones (SNZ) for rough diamonds will provide a leadership position to the Indian gems and jewellery industry.”
