Gem Diamonds has now recovered twice as many +100 cts diamond this year than during the whole of 2023.
The UK-based company today announced a 129.71 carat Type II white diamond from its Letseng mine, in Lesotho.
It’s the 10th +100 cts diamond of 2024. Historically the mine averages eight per year, but last year it recovered only five.
The spike in high-value recoveries has helped push up revenue at Gem. Earlier this month it reported a 9 per cent increase in its first half earnings to $77.9m.
Letseng 70 per cent owned by Gem and 30 per cent by the Lesotho government is the highest dollar per carat kimberlite diamond mine in the world.
Pic courtesy Gem Diamonds, shows the 129.71 ct stone.
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.
Namibia is one of Africa’s top five diamond exporters, right behind Angola, Botswana, and South Africa. In 2022, the country exported more than $940 million worth of diamonds.
The world’s demand for natural diamonds has bounced back from a slump during the COVID-19 pandemic, with Namibia’s largest marine dining company, Debmarine, reporting a sales increase of 83% in 2022 from the previous year.
Still, Debmarine CEO Willy Mertens is worried about competition from synthetic diamonds, sector of the business that could cost many Namibians their jobs.
Though trained jewelers can tell the difference between lab-grown and natural diamonds, there’s nothing obvious to distinguish lab-grown diamonds from natural ones.
The Modern Mining publication recently said that in 2022, lab-grown diamond jewelry surpassed 10% of the market of global jewelry sales for the first time. The publication said artificial diamond sales are forecast to continue growing at an annual double-digit percentage rate in coming years.
Namibia, where workers extracted 2.1 million carats in diamonds in 2022, is embarking on a campaign to tout natural diamonds as environmentally sound and holding greater value for the money.
“We’ve seen in the past couple of years that lab-grown diamonds, or synthetics as you call them, have sort of infiltrated the natural diamond market,” said Mertens. ” … people were first marketing them as real diamonds and we’ve done a lot of work around trying to differentiate them.”
One of the challenges of marketing Namibian natural diamonds is the environmental impact that diamonds have on the landscape.
Mertens said Debmarine invests a significant amount of its profits into environmental rehabilitation and restoration of landscapes and the seabed damaged by mining.
“The restoration of the seabed actually happens naturally as the waves move,” Mertens said. “So what we are doing is that we are monitoring that, and what we do is we mine out a specific area and we leave an area next to it vacant, and over time we monitor how the area where we have recovered diamonds looks like compared to the one that was not touched and we’ve seen that it takes about three to 10 years maximum for that to completely restore. By completely restoring, mean about 70% of the organisms have returned to that place. On the land, it is sand that we are moving and what we do now is that we are using that same sand to keep the sea walls in tact.”
Mertens recently paid a courtesy call on Namibian President Nangolo Mbumba, to introduce the De Beers global ambassador for natural diamonds, Hollywood actor Lupita Nyong’o, and talk to the president about challenges facing Namibia’s diamond industry.
De Beers Natural Diamonds Global Ambassador Lupita Nyong’o, left, Namibia President Nangolo Mbumba, center, and Debmarine CEO Willy Mertens in Windhoek, Namibia, July 19, 2024. (Vitalio Angula/VOA) De Beers Natural Diamonds Global Ambassador Lupita Nyong’o, left, Namibia President Nangolo Mbumba, center, and Debmarine CEO Willy Mertens in Windhoek, Namibia, July 19, 2024. (Vitalio Angula/VOA) President Mbumba lamented a proposal for the Kimberley process — the process meant to screen out so-called “conflict diamonds” from entering the international market — to begin certifying all diamonds in Antwerp, Belgium.
The Group of Seven largest economies said that is an effort to prevent Russian diamonds from being sold abroad.
Mbumba said the measure would hurt African diamond producers.
“Recently, the decision was made by the G7 countries to route all rough and polished diamonds destined for G7 countries via Belgium,” said Mbumba. “This decision poses a serious risk and threat to our economies, especially the economies of Angola, Botswana and Namibia by increasing the cost as well as curtailing freedom of trade for our countries’ products.”
Namibia’s president said he and his counterparts from Angola and Botswana have written a letter to the G7 to ask them to halt their plans.
Botswana intends to renegotiate its proposed purchase of a stake in Belgian gem dealer HB Antwerp to double the size of its shareholding at no extra cost following the downturn in the diamond market, the country’s mines minister said on Tuesday.
Botswana is the world’s biggest diamond producer by value, meaning its economy has been disproportionately hit by a drop in demand for diamonds caused by a global economic slowdown.
Lefoko Moagi told Parliament the weaker diamond market had also affected the company’s valuation, giving the country room to renegotiate.
“We will not be injecting more capital, but we will get more shares for the same amount proposed in 2023,” Moagi said. “Instead of the 24%, we will negotiate to get 49.9% for the same amount initially proposed.”
Finance ministry budget documents showed in February that the country had set aside 890 million pula ($65.95 million) for the 24% stake, valuing the Belgian company at about $275-million.
The HB Antwerp deal was announced during Botswana’s negotiations for a new sales contract with Anglo American’s diamond unit De Beers in March 2023.
As Botswana sought to increase its power to market its stones outside a decades-old agreement with De Beers, it said the HB Antwerp deal would strengthen its presence in the downstream diamond industry.
It includes supplying the trader with rough diamonds for five years through the state-owned Okavango Diamond Company (ODC).
Diamond producer Lucara Diamond Corp sold 76 387 ct of diamonds, generating $41.3-million in revenue, during the second quarter ended June 30.
The company recovered 92 419 ct of diamonds at a grade of 12.9 ct for every 100 t of direct milled ore.
Additionally, 8 349 ct were recovered from processing historic recovery tailings. The company recovered 206 special diamonds, defined as rough diamonds weighing more than 10.8 ct, representing 6.9% by weight of the total recovered carats from the second quarter’s processed ore. This aligns with the company’s expectations, Lucara said.
Noteworthy recoveries during the period included a 491 ct Type IIa diamond, a 225.6 ct Type IIa diamond and a 109 ct Type IIa diamond.
Significant progress was made in shaft sinking for the ventilation and production shafts during the second quarter, with the critical path ventilation shaft ahead of the July 2023 rebase schedule. By the end of the quarter, the production and ventilation shafts had reached depths of 557 m below collar and 550 m below collar, respectively.
Operational highlights from the Karowe mine for the quarter included ore and waste mined of 700 000 t, with ore processed totalling 700 000 t.
Financial highlights for the second quarter revealed operating margins of 67%, compared with 59% in the second quarter of 2023. This strong operating margin is attributed to robust pricing for the company’s larger stones and cost reduction initiatives, supported by a strong dollar.
The operating cost was $26.32/t processed, a 6% decrease from $27.97/t in the second quarter of 2023 and consistent with the $26/t in the first quarter of this year.
Lucara believes the impact of inflationary pressures, particularly in labour, was well-managed by the operation, with a strong dollar offsetting a slight increase in costs compared with the previous period.
Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) were $18.8-million, up from $16.5-million in the second quarter of 2023, driven by increased revenue and lower operating expenses.
During the second quarter, the company invested $11.2-million into the Karowe Underground Project (KUP), excluding capitalised cash borrowing costs. The ventilation shaft sank 128 m, and development of the 470-level station, located at about 550 m below collar, began.
Production shaft activities included the sinking of 104 m and the completion of three probe hole covers, with no water being intersected. A total of 26 m of lateral development on the 470-level, along with the 470-level station development, was completed.
As of June 30, Lucara reported cash and cash equivalents of $21.9-million and working capital of $21.7-million. The company had drawn $165-million on the $190-million project facility for the KUP, with an additional $25-million drawn on the $30-million working capital facility and a cost overrun reserve account balance of $37.5-million.
The Karowe mine registered no lost-time injuries during the second quarter, taking the mine to more than three years without a lost-time injury.
“Lucara’s performance this quarter reaffirms our position as a leader in the diamond industry. Our . . . safety and operational excellence [record] continues to drive our success, with both our openpit operations and underground construction progressing admirably. The Underground Expansion Project, in particular, is advancing well, with shaft sinking progress surpassing our expectations,” Lucara president and CEO William Lamb said on August 12.
Lucara noted that, in the diamond market, the long-term outlook for natural diamond prices remains positive owing to improving supply and demand dynamics, largely driven by long-term reductions from major producing mines.
However, the market for smaller-sized diamonds remains soft, impacted by a weak Asian market and the rise of laboratory-grown diamonds.
Lucara said demand for larger diamonds over 10.8 ct remained robust, as reflected in the company’s sales.
However, the G7 sanctions on Russian diamonds over 1 ct, effective March this year, have caused some trade delays owing to new regulations requiring these diamonds to be processed through the Antwerp World Diamond Centre for origin verification.
Lucara, with its established operations producing Botswana diamonds, stands to benefit from this heightened focus on origin verification.
Sales of laboratory-grown diamonds increased steadily through 2023 and into this year, with many smaller retail outlets increasingly adopting these diamonds as a product.
In the second quarter, diamond producer De Beers announced that it would cease creating synthetic diamonds and focus on selling natural diamonds. This decision aligns with several major brands confirming they would not market laboratory-grown diamonds.
Lucara said the long-term impact was expected to support the natural diamond market, with a bifurcation between the natural and laboratory-grown diamond markets expected in the medium term.
The company believes that the longer-term market fundamentals for natural diamonds remain positive, as demand is expected to outstrip future supply, which has been declining globally over the past few years.
A loose 0.94 carat Argyle Pink – one of the last recovered from the iconic mine in Western Australia – is being sold at auction.
It is the highlight of a 416-lot online event (ending 11 August), featuring many items that belonged to Graham Jackson, former owner of Loloma Jewellers, located in Townsville, Australia, who died aged 92 in May.
The cushion cut fancy intense VS1 gem is designated as 6P – 6/10 for intensity of hue and P for pink as the dominant hue.
It was sold at the 2021 Argyle Pink Tender-Rio Tinto’s Final Collection, the last tender from the mine, which closed in November 2020 after 37 years, during which it produced 90 per cent of the world’s pink diamonds.
The stone is being sold by Sydney-based First State Auctions, with an estimate of AUD$700,000 to AUD$800,000 (US$455,000 to U$520,000).
Last January Tiffany & Co. has bought a parcel of 35 Argyle pinks – from 0.35 carats to 1.52 carats – for “select clients”.
Africa-focused miner Gem Diamonds has unearthed a 145.55 carat, Type II white diamond at its prolific Letsěng mine in Lesotho.
The diamond, recovered on August 3rd, is the ninth greater than 100-carat precious stone recovered this year at the operation, the company said.
Type IIa diamonds are the most valued and collectable precious gemstones, as they contain either very little or no nitrogen atoms in their crystal structure. Boart diamonds are stones of low quality that are used in powder form as an abrasive.
The Type II, white diamond is the ninth greater than 100-carat precious stone recovered this year at the Letsěng mine.
The Letšeng mine is one of the world’s ten largest diamond operations by revenue. At 3,100 metres (10,000 feet) above sea level, it is also one of the world’s most elevated diamond mines.
Diamond miners are going through a rough patch as US and Chinese demand for diamond jewellery continues to be weak and the popularity of cheaper laboratory grown diamonds continues to rise.
In 2015, man-made diamonds had barely made an appearance as a competitor to natural diamonds. By last year, these stones accounted for more than 10% of the global diamond jewelry market, according to industry specialist Paul Zimnisky.
The market values of small to medium diamond mining companies, including Canada’s Lucara, South Africa’s Petra, and Gem Diamonds itself, are around $100 million or less. This is only about a third or a fourth of the price the large stones they aim to find may be worth.
The news comes as competitor Petra Diamonds postponed the sale of rough stones mined at its South African operations that would have been offered during the August/September event of the year, amid low demand.
