Julian Ogilvie Thompson, former chairman and CEO of De Beers as well as of its parent company, Anglo American, died on August 11 aged 89.
Ogilvie Thompson, a South African native, first joined Anglo American in 1956. He was promoted to personal assistant to then chairman Harry Oppenheimer a year later, De Beers told Rapaport News. In 1966, he joined the board of De Beers, and he became deputy chairman in 1982. Three years later, Ogilvie Thompson took over as executive chairman of De Beers, while Oppenheimer’s son, Nicky, filled his previous role.
In 1997, Ogilvie Thompson retired as chairman but remained deputy chairman until stepping down from the company in 2002. He was committed to supporting the development of young leaders from across Africa, forming an 18-year affiliation with the Mandela Rhodes Foundation, which offers scholarship and leadership programs to youth throughout the continent.
“Julian Ogilvie Thompson — often known in the business simply as JOT — was a hugely influential figure in the history not only of De Beers and Anglo American, but also in the broader South African landscape,” a De Beers spokesperson said. “As the former chairman and chief executive of both Anglo American and De Beers, and as a proud South African, he played a key role in shaping both companies and the nation.”
Alrosa’s diamond sales have been unaffected by sanctions, according to the company’s first published set of financial results since Russia invaded Ukraine in February 2022.
First-half sales for 2023 were RUB 188.2 billion ($1.9 bn), up 0.2% from RUB 187.8bn ($1.9 bn), for H1 of 2022, and up 3.5 per cent on H1 of 2021. Net profit for H1 2023 was down 35 per cent year-on-year to RUB 55.57bn ($562.5m).
More detailed breakdowns of diamond sales are marked as being restricted by decree of the Government of the Russian Federation.
The US has imposed banking restrictions and sanctioned direct imports of Russian diamonds. But Russian stones polished elsewhere are not sanctioned.
The G7 countries were expected to impose restrictions when they met in May, but instead announced plans to consider a traceability solution.
India and Dubai have not imposed restrictions on Russian diamonds.
In its interim financial statement, Alrosa, the state-controlled diamond miner, says: “Ongoing geopolitical tensions in the region have escalated significantly as the situation regarding Ukraine continues to evolve, which remains highly volatile.
“The sanctions against Russia, in turn, have caused economically unjustified costs in a number of foreign economies, disrupted the efficiency of supply chains and trade flows.”
De Beers will allow sightholders to defer up to half of rough purchases to early next year amid sluggish consumer demand and high midstream stockpiles, market insiders told Rapaport News Wednesday.
The miner wrote to customers on Friday, informing them that they could avoid buying parts of their allocations of 1-carat goods and larger for the rest of 2023, the sources said on condition of anonymity. The allowance is 25% by value for some boxes and 50% for others, and applies to sights 8 to 10 — which will take place in September, October and December.
The rule does not apply to the August sight, which runs this week in Botswana, they added.
De Beers does not usually let sightholders defer more than one box per category of rough diamonds in each half year. In normal circumstances, failure to buy can affect access to goods in future intention-to-offer (ITO) periods — the yearlong session for which allocations are planned.
The new concession is unusual because it allows buyers to push off purchases to a new ITO. De Beers did not specify when the final deadline would be in early 2024, the sources said.
However, it told clients they must buy at least 65% of the non-deferred goods or the deferred stones will count as refusals, the sources explained.
The move comes amid persistent weak retail sales in the US and China. Manufacturers have been carrying large inventories of the less salable polished, especially in the 0.30- to 2.99-carat sizes that originate from rough above 0.75 carats.
“There is already a buildup of polished, and therefore there is enough…to fulfill the demand for the holiday,” said one of the sources. “[De Beers will] keep [the rough] for you rather than sightholders needing to buy it and store it themselves.”
Rough prices were stable at this week’s sight, while the buyback policy remains unchanged, the market participants noted. This allows clients to sell up to 10% or up to 30% of purchases back to De Beers, depending on the category.
“We continue to provide sightholders with elements of supply flexibility to support their business needs in response to evolving demand plans,” a De Beers spokesperson commented.
In the first half of this year, China consumed nearly 555 tons of gold, up more than 16 percent year-on-year. The trend has been described as a domestic gold craze. But diamonds seem to have lost their attraction, as the market size in China declined to 11.4 billion U.S. dollars in 2022, 2.5 billion dollars less than in 2021. Xu Hua has more from the southern Chinese city of Shenzhen, China’s biggest distribution center for wholesale jewelry.
XU HUA Shenzhen Shuibei Jewelry Market “We’re at Shenzhen’s Shuibei Jewelry Market, the biggest wholesale market of its kind in China. The market has been crowded with consumers from all over the country for months, as international gold prices continue to rise. Let’s go and see what the best seller is here.”
The hustle and bustle of the Shuibei Jewelry Market since the beginning of 2023 marked a strong comeback from last year. With attractive designs, diverse styles and low prices, dozens of deals can be reached in seconds.
YU WANLING Shenzhen Resident “Shuibei is well-known for its gold sales. The quality gold is more reassuring than other places.”
ZHENG CE Shenzhen Resident “We are about to get married. We prefer to buy some gold rather than diamonds for inheritance or for wearing.”
China’s domestic consumption of gold jewelry reached 555 tons in the first half of 2023. Among the gold consumption, the purchase of gold bars jumped 30 percent year-on-year to 146 tons, while that of gold jewelry reached 368 tons, up almost 15 percent from the same period last year.
HAO RUNSONG General Manager, Lidu Gold “In 2023, our gold sales increased by 20-30 percent compared with last year.”
By contrast, the doorways of neighboring diamond stores looked relatively lonely, as the precious gems lost some significant value over the last few months.
LIU JINGLI Manager, Yishidai Jewelry “The retail transaction volume of diamond inlays is relatively low, and the wholesale sales of our diamond inlays is also declining.”
ZHAO LI Director, The Gold Plaza Operation Center “The sales of diamond jewelry have declined slightly, partly due to falling prices, fewer marriages, the impact of cultivated diamonds, and changing buyer behaviour.”
For daily social needs, some consumers looked to art jewelry as an alternative to diamond jewelry.
HUANG WEIJUN Brand Director, Shenzhen REIEN Jewelry “Our sales of art jewelry in the first half of this year have increased by about 300 percent over the whole of last year.”
Some economists say the booming gold sales are a direct reflection of a gloomy economic outlook.
WU HAIFENG Executive Director, Shenzhen Institute of Data Economy “When people feel uncertainty about the future, especially on the economy, especially about the income growth, people will think to change their investments platform from a variety of the financial products to hard currencies such as gold, such as real estate.”
However, Wu says that the real estate market hasn’t looked good since the beginning of the last year, so Chinese consumers and investors have been looking at other products. Wu added proper stimulative policies are still needed to ensure a healthy market and economic rebound. Xu Hua, CGTN, Shenzhen, Guangdong Province.
Lucara Diamond Corp. has recovered a 1,080.1-carat rough diamond from its Karowe mine in Botswana, its fourth topping the 1,000-carat mark in eight years.
The white, type-IIA stone came from the site’s south lobe, known for its large, high-quality rough, Lucara said Wednesday.
The diamond showed up in the miner’s Coarse XRT unit, a recovery circuit that uses X-ray technology to identify huge stones in large pieces of ore before they’re broken up.
Since 2015, the south lobe of Karowe’s AK6 kimberlite has yielded three other diamonds in this size class: the 1,109-carat Lesedi La Rona that year, the 1,758-carat Sewelô in 2019, and a 1,174.76-carat clivage diamond in 2021.
“Lucara is extremely pleased to be reporting the recovery of another large, high-quality gem diamond in excess of 1,000 carats,” said Lucara CEO Eira Thomas on Wednesday. “As we progress mining deeper in the open pit and transition to underground mining exclusively in the south lobe, the preponderance of large, high-value stones is increasing.”
The miner is investing $683 million in Karowe’s underground expansion — a move it says will extend the mine’s life until at least 2040, 15 years beyond the original 2025 closure date.
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.”
