The Reserve Bank of Zimbabwe has stockpiled 300,000 carats of diamonds under new regulations which compel miners to pay half of their royalties using commodities, the state-run Sunday Mail reported.
Central bank governor John Mangudya also told the Harare-based newspaper that gold reserves stood at around 350 kilograms, or around $20 million in US dollars. The value of the diamond stockpile is hard to quantify, he added.
Zimbabwe introduced regulations last year that require miners to pay half of their royalties to the government in the commodities themselves and the rest in cash, as the southern African country seeks to build its mineral reserves.
Zimbabwe Consolidated Diamond, and Murowa Diamond, which is owned by Rio Zim, are the only diamond firms operating in the country.
Mining companies that operate in Zimbabwe include units of Impala Platinum, Anglo American Platinum and Sibanye Gold.
Platinum and lithium producers are allowed to pay their royalties in cash.
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.
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).
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.
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.”
A new office building in India’s diamond city Surat in Gujarat, where 90% of the world’s diamonds are manufactured has surpassed the Pentagon as the largest structure of the kind.
Built over 7.1 million square feet of floor space, the Surat Diamond Bourse (SDB) has a big leg up on the 6.5 million square feet headquarters building of the US department of defense in Arlington, Virginia. The Pentagon was the world’s largest building for 80 years before it got dethroned.
The 15-story structure, featuring a succession of nine rectangular structures spilling out from a central “spine,” cost a whopping 32-billion-rupee ($388 million) to develop and build.
Indian architecture firm Morphogenesis stopped and started construction over four years because over pandemic-related delays. The building is finally due to open its doors in November 2023, with prime minister Narendra Modi due to inaugurate it.
Quotable: Narendra Modi lauds Surat Diamond Bourse “Surat Diamond Bourse showcases the dynamism and growth of Surat’s diamond industry. It is also a testament to India’s entrepreneurial spirit. It will serve as a hub for trade, innovation and collaboration, further boosting our economy and creating employment opportunities.” Prime minister Narendra Modi, who was Gujarat’s chief minister from 2001 to 2014, quote-tweeted a video of the Surat premises yesterday.
Working in the Surat Diamond Bourse, by the digits 4,700 office spaces: Office spaces in the Surat Diamond Bourse, which can also double up as small workshops for cutting and polishing diamonds. The offices were all purchased by diamond companies prior to construction, project CEO Mahesh Gadhavi.
65,000: Diamond professionals, including cutters, polishers and traders, that can work on the premises at a given time. Besides offices, the workers also have access to dining, retail, wellness and conference facilities
9: Number of 1.5-acre courtyards with seating and water features that can serve as casual meeting places for traders
131: Number of elevators on the premises
7 minutes: The maximum amount of time it takes to reach any office from any of the building’s entry gates, according to Sonali Rastogi, co-founder of the Indian architecture firm Morphogenesis that designed the behemoth building. In a democratic move, the offices were assigned to business via a lottery system
3 times: How much bigger SDB is compared its counterpart in Mumbai, Bharat Diamond Burse (BDB)
400: The small number of merchants that were willing to move in during the touted November 2022 opening, which led to the opening being postponed. Mumbai’s Palanpuri diamantaires are staying put because they do not want to incur establishment cost, transport cost, and take on overheads of maintenance when the trading business is struggling.
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.
The research documents by MRFR indicate that the “Synthetic Diamonds Market Research Report Information by Application, Product, Region, Type, and Manufacturing Process – Forecast Till 2032”, the Synthetic Diamonds market is predicted to grow substantially over the assessment timeframe from 2022 to 2032 at a healthy CAGR of around 7.80%.
The reports even share predictions regarding the market’s growing revenue share, which will likely reach USD 29.9 Billion by the end of 2032. As per the reports, the market was worth nearly USD 15.2 Billion in 2022.
The primary market factors accelerating market expansion include rising demand from the semiconductor and electronics sectors as well as increased demand for computer chips and other microchips used in many other types of electronics.
The increase in demand for synthetic diamonds from the semiconductor and electronics industries is the primary factor behind the growth of the global market for synthetic diamonds. The increase in disposable money among the general population benefits the market.
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.
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.”
