Diamond prices continue to fall, as market activity declines. Partly the decline is due to the annual period of summer holidays, and in part the price adjustment in the weakened market continues.
But is this just a price adjustment, or is this a larger change - market adjustment? The majority in the market agree that too many companies compete for a very small "piece of pie". The current crisis is so severe that these companies with less strong fundamentals may be out of the game, which leads to a reduction in the number of companies operating in the diamond pipeline.
Growing difficulties
Many wonder: will the Indian banks continue to provide credit lines and finance local diamond companies that have large production and high overheads? Or are the realities now existing that will prompt them to reduce their participation in these capital-intensive enterprises? If this is the case, then the companies will become more optimized, more efficient and the foundations will be strengthened, and some companies will leave.
As part of this recovery process, companies can transform their purchases of diamonds into more rational purchases. One type of transformation resulting from this process is vertical consolidation. De Beers has already taken a small step towards vertically integrated companies such as Tiffany & Co., Chow Tai Fook and Sterling, all of which are sightholders, diamond manufacturers, jewelery manufacturers and retailers. De Beers, along with De Beers Jewelers and Forevermark, is moving in this direction.
The Belgian, Israeli and even American diamond centers - all of them passed through a period of accelerated growth, accompanied by a crisis and the process of formation, which led to the creation of smaller and more stable centers. Is India going through the same process? Are they suffering now from the stage of the crisis after growth, which will end in compression and consolidation? If so, then this is a positive direction of development, which will lead to a healthy market.
I am sure of one thing - the market of diamonds and diamonds will never remain the same. We will never go back to the existing structure. Since De Beers lost its monopolistic market share, which led the business to the middle part of the diamond pipeline in 2000, a new business was born. A business that goes through painful processes of expansion and growth. I believe that from the ruins that we observe today, we give birth to a business with a more perfect structure. A business that is more profitable has a sound economic logic, and in which all participants understand the value of money and what income it should be for their diamond owner and in any other business in any other industry.
De Beers
The weakening of the market was not spared by De Beers, which reported a 9 percent drop in sales to 13.3 million carats in the first six months of 2015. The cost of sales of diamonds fell by 23% to $ 2.7 billion.
In response to continuing market conditions, the parent company of Anglo American said that De Beers revised its forecast for 2015 to 20-31 million carats. This is consistent with my prediction of a reduction in supply.
This new policy probably served as a motivation for De Beers to make a decision to allow larger amounts of deferred purchases on the upcoming site than usual. In August, sightholders may postpone up to 75% of the amounts allocated to them. The company gives them the opportunity to change their mind after viewing the product and getting acquainted with the prices for it.
De Beers also announced that after the site, sightholders could change their planned delivery schedule for the rest of the volume for the current ITO (intention to make an offer), which ends in March 2016 - six more sites. This medium-term change allows you to make a decision on deliveries based on market conditions at the moment. This is different from the decisions that were made at the end of 2014, when the crisis has already come, accompanied by the hope that the market will improve in the near future. Since De Beers is the benchmark for the industry, I hope that all diamond producers will follow suit. This is a good opportunity to solve the main problem of the middle part of the diamond pipeline: the minimum rate of profit!
Identification of roots
To hope for an increase in the price of diamonds or diamonds is not a solution to the question. We all know the expression: "the dog is following a false trail." Why is this a false trace? Because the cat climbed another tree! Is the expectation of a price increase the same as taking a false track? I think that the problems of our industry are hidden in another tree.
There are several long-term problems that cause the current crisis:
• 5,000 companies making up the middle part of the diamond pipeline are fighting for a crowded market and minimal profits;
• financial structure and coefficient of self-capitalization;
• The oligopoly of distribution of diamonds (seven major diamond producers, several open tenders in the market and several diamond sellers on the open market - this is the whole supply of rough diamonds!);
• 200,000 wholesalers of diamonds fighting for sale at almost any price;
• Decrease in the level of consumer demand for diamond jewelry due to lack of specific marketing;
• The high price of diamond jewelry, which pushes consumers to alternative products;
• The unresolved and growing problem of undeclared diamonds and diamonds grown in the laboratory;
• and last but not least: the increase in the market share of the declared diamonds grown in the laboratory in view of the greater profits for their sellers.
Is not this a "cat sitting on another tree"? All these reasons make me believe that our industry will never be the same after this crisis. The expectation that prices for diamonds will rise is a cliche. As we saw in the past, when prices for diamonds are growing, so are the prices for diamonds. Margin never grows, remaining minimal.
The market of rough diamonds
The decline in the market means that the rest of the main sources of rough diamonds will reduce their supply and lower prices. This is unavoidable for many reasons, as summer holidays begin and, with such uncertainty, market participants say that they will wait until August or early September before deciding on what to buy and at what price they want to make these purchases.
Another aspect of this decision is abstention from large financial costs in the form of cash, when it is clear that the goods will simply lie in the form of stocks until people return to work after the holidays. There is no need to increase the financial burden without a reasonably good reason.
Market players refrain from buying diamonds, preferring to wait for changes in conditions. When asked what will happen if the price of diamonds starts to rise, they say they prefer to buy at higher prices when the market is stronger than under the current weak market. Many key players in the Indian market are reorganizing their manufacturing infrastructure and sales offices around the world. They do not expect much demand when they return from holidays.
http://www.ehudlaniado.com/home/index.php/news/entry/not-a-price-correction-but-a-market-correction
Thursday, August 3, 2017
Jewelry industry continues to decline in size, as more and more retailers, wholesalers and diamond producers are closing
The latest statistics from the Jewelers Board of Trade (JBT) show that the jewelry industry continues to decline in size, as more and more retailers, wholesalers and diamond producers are closing.
The number of business cuts in the United States and Canada reached 251 in the second quarter of 2015, compared to 241 in the second quarter of 2014. Since the beginning of this year, to the present day, the termination of business - this includes bankruptcies, consolidation (sales / mergers) and companies that have simply ceased operations - increased by 12 percent year on year, from 485 to 545.
The statistics for the second quarter reflect the continuation of the trend, which manifested itself in full in 2014, when the number of business termination increased by 32 percent year-on-year.
During the JBT Internet conference held on Wednesday to discuss the industry's new achievements, President Dione Kenyon cited many of the reasons for the industry's reduction earlier: aging owners who decided not to continue the business and the inability or lack of desire to make the changes necessary to In order not to lag behind in this rapidly changing world.
She also said that some of the recent cases of closure of retailers may be the result of a lack of cash due to gold buyback, which for several years "helped mask the deeper problems that jewelers have," including obsolete stocks and the fact that they are not Adapted to the new technology.
JBT data showed that from the number of closed businesses, the majority prefer to cease operations than to consolidate or file for bankruptcy.
In North America, a total of 216 retailers, wholesalers and diamond manufacturers ceased operations in the second quarter of 2015 compared to 185 in the second quarter of 2014. From the beginning of the year to the present day, the number of businesses that simply closed, increased by 28 percent.
At the same time, the number of consolidations this year has decreased by 43 percent. Kenyon said that although it seems that the deals are "still concluded" behind the scenes, but not so many of them were implemented this year.
The number of bankruptcies, in fact, is not growing. So far in 2014 there were 21 bankruptcies, compared to 20 at this time last year. Kenyon said that this is a continuation of the trend, observed for some time - very few companies tend to spend money on the bankruptcy procedure.
Other main data for JBT for the second quarter include the following:
- The number of new jewelry businesses this year in the United States and Canada reached 152, which is less than 159 at this time last year;
- The total number of registrations for JBT (including retailers, wholesalers and diamond manufacturers) for North America as of the end of the second quarter of 2015 fell 3 percent year-on-year to 29,607 compared to 30,392 in the second quarter of 2014; and
- The number of claims for recovery of debts received by JBT (593) decreased from the beginning of this year, although the average amount of claims ($ 8,728) slightly increased. Kenyon defined the industry's credit data as "OK" (good) during a web conference on Wednesday; Not all businesses make payments immediately or without difficulty, but this is not yet a situation when it is impossible to get a payment at all.
http://www.nationaljeweler.com/independents/retail-surveys/Industry-shrinkage-trend-continues-in-Q2-9642.shtml
The number of business cuts in the United States and Canada reached 251 in the second quarter of 2015, compared to 241 in the second quarter of 2014. Since the beginning of this year, to the present day, the termination of business - this includes bankruptcies, consolidation (sales / mergers) and companies that have simply ceased operations - increased by 12 percent year on year, from 485 to 545.
The statistics for the second quarter reflect the continuation of the trend, which manifested itself in full in 2014, when the number of business termination increased by 32 percent year-on-year.
During the JBT Internet conference held on Wednesday to discuss the industry's new achievements, President Dione Kenyon cited many of the reasons for the industry's reduction earlier: aging owners who decided not to continue the business and the inability or lack of desire to make the changes necessary to In order not to lag behind in this rapidly changing world.
She also said that some of the recent cases of closure of retailers may be the result of a lack of cash due to gold buyback, which for several years "helped mask the deeper problems that jewelers have," including obsolete stocks and the fact that they are not Adapted to the new technology.
JBT data showed that from the number of closed businesses, the majority prefer to cease operations than to consolidate or file for bankruptcy.
In North America, a total of 216 retailers, wholesalers and diamond manufacturers ceased operations in the second quarter of 2015 compared to 185 in the second quarter of 2014. From the beginning of the year to the present day, the number of businesses that simply closed, increased by 28 percent.
At the same time, the number of consolidations this year has decreased by 43 percent. Kenyon said that although it seems that the deals are "still concluded" behind the scenes, but not so many of them were implemented this year.
The number of bankruptcies, in fact, is not growing. So far in 2014 there were 21 bankruptcies, compared to 20 at this time last year. Kenyon said that this is a continuation of the trend, observed for some time - very few companies tend to spend money on the bankruptcy procedure.
Other main data for JBT for the second quarter include the following:
- The number of new jewelry businesses this year in the United States and Canada reached 152, which is less than 159 at this time last year;
- The total number of registrations for JBT (including retailers, wholesalers and diamond manufacturers) for North America as of the end of the second quarter of 2015 fell 3 percent year-on-year to 29,607 compared to 30,392 in the second quarter of 2014; and
- The number of claims for recovery of debts received by JBT (593) decreased from the beginning of this year, although the average amount of claims ($ 8,728) slightly increased. Kenyon defined the industry's credit data as "OK" (good) during a web conference on Wednesday; Not all businesses make payments immediately or without difficulty, but this is not yet a situation when it is impossible to get a payment at all.
http://www.nationaljeweler.com/independents/retail-surveys/Industry-shrinkage-trend-continues-in-Q2-9642.shtml
Diamonds have declined as much as their perceived value
I usually criticized De Beers with great pleasure, and if you read my articles written in the past, you can see that I did it with enthusiasm.
But time goes by, and new professionals come all the time. So in this case, suddenly a man named Stephen Lussier (Stephen Lussier) appeared as the chief executive officer of De Beers. Recently, it was reported that Mr. Loussier was going to re-launch one of my most beloved branding and marketing campaigns for De Beers - "Brilliant is forever".
Although his intention is to give a new luster to his own Forevermark brand, the whole industry will benefit from this campaign.
The constantly recurring flow of negative information about diamonds, along with the numerous price declines observed from month to month, led to the fact that they moved from the category of undervalued to the category of discounted goods.
It can even be said that at present diamonds and jewelry are considered as discounted products with a short shelf life and prices for them are subject to further decline. How did we get into this crazy trap?
Our product is 10 times more reliable than any monetary instrument, including gold. Shares, bonds and cash certificates were badly affected and lost their luster. The restoration of their damaged cost is similar to the restoration of historic buildings; For this you need to work hard, but the end result will be great.
Stephen Lucier resurrects the public perception of diamonds, primarily targeting the third millennium generation that was born in the 1980s and 1990s. The idea of De Beers is correct in the sense that "The generation of the third millennium is driven by the same emotions and desires of love that gave birth to the slogan" Brilliant is forever "from previous generations." But they have a completely different view of values.
If it were possible, I would ask my friend Steven Loussier, whom I never met or talked with, could he give me a second and listen to what I want to say. It's not about returning the miracle, but about how he plans to do it.
The average adult American spends now more time watching on his mobile phone than watching TV. In fact, it is said that the average man of the third millennium in the US spends twice as much time on his mobile as he spends in front of the TV.
Simply put, the campaign should be based on the Internet, and not be conducted on TV, as it was done before. The problem is that it's actually harder to get a response from this generation than it was from their grandparents who watched and loved stars like Marilyn Monroe.
Therefore, Forevermark is not going to spend too much money on TV or print ads. Rather, it will focus on creating good online content, well suited for mobile devices. Currently, mobile phones are a modern connection to the outside world.
But the generation of the third millennium is not receptive to stories - they've already heard it all. They do not want any more stories. Rather, they need content that shows only facts. Do not even try to tell them about love, because with a huge competition online they will move on to the next topic without even stopping.
Instead, tell them the facts of life: diamonds will never be as cheap as they are today, and as a result of 30 years of inadequate attention, they are now sold for 20 percent of their true value. For clarity, at the time of Marilyn Monroe, the cost of the Chevrolet car was equal to the cost of a diamond engagement ring weighing 1 carat.
At present, the cost of an average passenger car has grown 10 times compared to the average price of a diamond. If you compare the cost of a diamond with a round cut diamond weighing 0.50 carats in 1955, when it cost about $ 200, then with the same stone today, the cost will be approximately $ 2,000. In nominal terms, an increase of 10 times is obtained. Housing, which was then worth about $ 2,000, today can be sold close to $ 500,000.
Diamonds are currently sold at a record low price compared to their real hidden cost.
In fact, over the years of inadequate attention, the prices of white diamonds have declined as much as their perceived value. Fortunately, history has shown that fantasy colored diamonds simply did not experience price reductions and did not face branding problems. Pink, blue and even yellow stones (which are now quite common) over the past 60 years not only saved the cost, but also increased in price. But do not take my words for granted, just look at the open auction houses and read about the precious stones, which from time to time at auctions are sold at record high prices.
Lusya should start the "Brilliant is forever" campaign from a clean slate in order to breathe new life into the legendary marketing campaign.
The positioning of diamonds as "Brilliant is forever" began in advertising since 1914, but it took 25 years until the campaign was carried out in the most successful manner. In 1999, the most prestigious advertising magazine Advertisement Age stated that "The Brilliant is Forever" is the most recognized and effective slogan of the 20th century. In 1938, young Harry Oppenheimer turned to Gerold M. Lauck, president of NW Ayer & Son, and they began using this legendary slogan. Then the average diamond engagement ring was sold for $ 80 for the current money. With the help of a powerful developed campaign, over the years, De Beers has significantly succeeded [in increasing] the price of the label. "
http://www.idexonline.com/Memo?Id=40945
But time goes by, and new professionals come all the time. So in this case, suddenly a man named Stephen Lussier (Stephen Lussier) appeared as the chief executive officer of De Beers. Recently, it was reported that Mr. Loussier was going to re-launch one of my most beloved branding and marketing campaigns for De Beers - "Brilliant is forever".
Although his intention is to give a new luster to his own Forevermark brand, the whole industry will benefit from this campaign.
The constantly recurring flow of negative information about diamonds, along with the numerous price declines observed from month to month, led to the fact that they moved from the category of undervalued to the category of discounted goods.
It can even be said that at present diamonds and jewelry are considered as discounted products with a short shelf life and prices for them are subject to further decline. How did we get into this crazy trap?
Our product is 10 times more reliable than any monetary instrument, including gold. Shares, bonds and cash certificates were badly affected and lost their luster. The restoration of their damaged cost is similar to the restoration of historic buildings; For this you need to work hard, but the end result will be great.
Stephen Lucier resurrects the public perception of diamonds, primarily targeting the third millennium generation that was born in the 1980s and 1990s. The idea of De Beers is correct in the sense that "The generation of the third millennium is driven by the same emotions and desires of love that gave birth to the slogan" Brilliant is forever "from previous generations." But they have a completely different view of values.
If it were possible, I would ask my friend Steven Loussier, whom I never met or talked with, could he give me a second and listen to what I want to say. It's not about returning the miracle, but about how he plans to do it.
The average adult American spends now more time watching on his mobile phone than watching TV. In fact, it is said that the average man of the third millennium in the US spends twice as much time on his mobile as he spends in front of the TV.
Simply put, the campaign should be based on the Internet, and not be conducted on TV, as it was done before. The problem is that it's actually harder to get a response from this generation than it was from their grandparents who watched and loved stars like Marilyn Monroe.
Therefore, Forevermark is not going to spend too much money on TV or print ads. Rather, it will focus on creating good online content, well suited for mobile devices. Currently, mobile phones are a modern connection to the outside world.
But the generation of the third millennium is not receptive to stories - they've already heard it all. They do not want any more stories. Rather, they need content that shows only facts. Do not even try to tell them about love, because with a huge competition online they will move on to the next topic without even stopping.
Instead, tell them the facts of life: diamonds will never be as cheap as they are today, and as a result of 30 years of inadequate attention, they are now sold for 20 percent of their true value. For clarity, at the time of Marilyn Monroe, the cost of the Chevrolet car was equal to the cost of a diamond engagement ring weighing 1 carat.
At present, the cost of an average passenger car has grown 10 times compared to the average price of a diamond. If you compare the cost of a diamond with a round cut diamond weighing 0.50 carats in 1955, when it cost about $ 200, then with the same stone today, the cost will be approximately $ 2,000. In nominal terms, an increase of 10 times is obtained. Housing, which was then worth about $ 2,000, today can be sold close to $ 500,000.
Diamonds are currently sold at a record low price compared to their real hidden cost.
In fact, over the years of inadequate attention, the prices of white diamonds have declined as much as their perceived value. Fortunately, history has shown that fantasy colored diamonds simply did not experience price reductions and did not face branding problems. Pink, blue and even yellow stones (which are now quite common) over the past 60 years not only saved the cost, but also increased in price. But do not take my words for granted, just look at the open auction houses and read about the precious stones, which from time to time at auctions are sold at record high prices.
Lusya should start the "Brilliant is forever" campaign from a clean slate in order to breathe new life into the legendary marketing campaign.
The positioning of diamonds as "Brilliant is forever" began in advertising since 1914, but it took 25 years until the campaign was carried out in the most successful manner. In 1999, the most prestigious advertising magazine Advertisement Age stated that "The Brilliant is Forever" is the most recognized and effective slogan of the 20th century. In 1938, young Harry Oppenheimer turned to Gerold M. Lauck, president of NW Ayer & Son, and they began using this legendary slogan. Then the average diamond engagement ring was sold for $ 80 for the current money. With the help of a powerful developed campaign, over the years, De Beers has significantly succeeded [in increasing] the price of the label. "
http://www.idexonline.com/Memo?Id=40945
An institution that has a global presence and understands the diamond and diamond market
When the diamond industry in India began to grow rapidly in the 1960s, its family businesses were forced to travel to Antwerp, Belgium, to buy diamonds from diamond traders. Since the 15th century, Antwerp has been the center of the diamond and diamond world with its Diamond Quarter, crowded with buyers, and sellers of diamonds and diamonds trading among a number of cutting and polishing workshops.
With a cheaper labor force than in the traditional diamond production centers in Antwerp and New York, and with new equipment that facilitated the work, the Indian faceting and polishing industry was booming. Carrying out the cut of small stones, which previously was not considered profitable, Indian diamond producers received more profit. Over time, Indian buyers have risen to a higher level, being already able to buy directly from diamond manufacturers, rather than from wholesalers or dealers. India currently has a dominant role in the polished diamond sector, accounting for more than 80 percent of the world's diamond production. But now it is no longer necessary for Indian diamantaires to go on a long journey to Antwerp. Just three hours from them is Dubai,
In the conservative sector, which for a long time was valued for secrecy and tightly knit partnerships, Dubai's development was staggering. The diamond and diamond trade in the emirate, which in fact did not exist and whose volume in 2001 was less than $ 5 million, in 2013 and 2014 grew into an industry worth about $ 35 billion, according to Peter Meeus, chairman of the Dubai Diamond Exchange Dubai Diamond Exchange, DDE). Antwerp remains the largest diamond trade center in the world, its diamond exports in 2014 reached $ 15.7 billion, compared with the sale of $ 8.3 billion in Dubai, but its market share is constantly decreasing.
The Dubai Diamond Exchange is located in the sparkling Almas Tower near the complex of towers on the artificial island of Jumeirah Lake Towers. This is the highest commercial building in the Middle East, many companies related to trade are located on one of its 68 floors. As for why Dubai's prestige has grown so fast, Meuse, taking such a good place, can appreciate its strengths compared to other jewelry trading centers - formerly the chairman of the DDE was the head of the Antwerp World Diamond Center (AWDC) . He calls Dubai's business-friendly atmosphere as one of the distinctive features for the trade in diamonds and diamonds. Inside the tower, Almas has access to a boiling solution plant to remove dirt and other trace materials from both diamonds and diamonds, and services for storage in a secure storage facility located several floors below the ground (probably the most secure storage in the Middle East ). Companies can also quickly register online at the Dubai Multi Commodities Center, regardless of whether they are in India or New York; Centralization means a reduction in paperwork. Regardless of whether they are in India or in New York; Centralization means a reduction in paperwork. Regardless of whether they are in India or in New York; Centralization means a reduction in paperwork.
The bureaucracy hinders business not only in Europe, but also in India. Many of the diamantaires, who at least once visited Dubai to buy and sell, have now opened their head offices in this emirate. "It's easier," Meeeus explains, noting the presence of a large number of skilled workers in Dubai. But the main reason for the influx of Indian companies may be prosaic: they like the way of life here. Housing in Dubai is more affordable than in Mumbai and other major cities in India, which means a higher level of living conditions for the staff and management of the company. "You can have a very good place for a reasonable amount, compared to Mumbai, where everything is expensive. Many of these huge Indian firms prefer to work here than in crowded Mumbai, "Meeeus says. It's not uncommon that diamantaires work seven days a week, he says.
The fact that Dubai is considered a good place to sell raw materials for the Indian faceting and polishing sector helped to attract sellers with big names, for example, the auction sales company De Beers Auction Sales, which opened its office in Dubai in 2011. Neil Ventura, executive vice president of the company based in Singapore, says that this was done in order to provide more convenient access for Indian-based customers (the company currently does not have a presence in India) and to provide opportunities For new customers in the region who are interested in buying rough diamonds. This step was justified. "We tripled our customer base in Dubai over the past three years and doubled the revenue from the Dubai office to our global sales," Ventura says. "Many [of our customers] are small and medium-sized enterprises that do not have the opportunity to receive rough diamonds from major shopping centers, for example, from Antwerp." Other sellers include the large Russian company ALROSA, which again resumed its Dubai office in November, which was closed earlier due to the crisis.
Business reacted to this attitude when "can-do" prevails in the public and private sectors of Dubai, but like many things in Dubai, the Almas Tower gives a special sheen that is particularly suited to trade in diamonds. "This is an extremely impressive building," says Clifford Elphick, chief executive officer of Gem Diamonds, a diamond mining company with operating mines in Lesotho and Botswana. At its Letšeng site in Lesotho, Gem Diamonds constantly discovers some of the largest diamonds that need to be found now; The speed with which you can carry out customs clearance of diamonds in the Kimberly Process office, by conducting it on the trading floor. "Dealers can fly, check the goods, determine the price, buy them and leave," says Elfik. - Business executives [in Dubai] are actively fighting for market share. They are determined to do this, and they are doing it. It's very wonderful. "
Not only the proximity and communication with India, but also the resource-rich African continent have helped Dubai in development. Most of the diamonds are mined in Africa, and the diamond producing countries include Botswana, South Africa, Angola and Zimbabwe. Although Gem Diamonds is headquartered in Antwerp, Elfick believes that Dubai is attractive, especially for smaller diamond companies who believe that it is easier and more efficient to contact their customers here. "Dubai is slowly but surely steadily improving its position in the world of diamond trade, dealing with diamonds and financing diamonds. Of course, more and more people consider the effectiveness of the Dubai Diamond Trade Center to be attractive. " He explains the growth of Dubai from the point of view of the development of a new axis "north-south" Which connects diamond producing countries in Africa directly with diamond manufacturers in India and the Far East, for which Dubai is a convenient stopping point. "The geographic location of Dubai is extremely advantageous not only for Indian dealers with diamonds from Mumbai and Surat, but also many Israeli companies have found the opportunity to conduct business here. Therefore, there is a connection between the small diamond producers, which are easier, easier and more efficient to contact their customers in India and Israel via Dubai. " But also many Israeli companies found the opportunity to conduct business here. Therefore, there is a connection between the small diamond producers, which are easier, easier and more efficient to contact their customers in India and Israel via Dubai. " But also many Israeli companies found the opportunity to conduct business here. Therefore, there is a connection between the small diamond producers, which are easier, easier and more efficient to contact their customers in India and Israel via Dubai. "
The "north-south" axis became stronger when De Beers transferred its "sites" - regular sales of rough diamonds to its long-term customers - from London to Gaborone, the capital of Botswana. Beneficiation, as is known in the industry, is intended to assist diamond-producing countries by placing additional economic activities, such as cutting and polishing and sales, along with mining. Regular arrivals of buyers to sites (which take place approximately every fifth week) also support the local economy. For many of De Beers sightholders - large buyers of rough diamonds - this move means that now they have one less reason for flights to Europe. Beneficiation brought direct benefits also to Dubai, And as infrastructure is increasingly developing in diamond-producing countries in Africa, Dubai is also benefiting from this. "At the moment, Namibia is reviewing its contracts with De Beers, which can also have an impact on the UAE and, probably, is positive," Meeeus said. Emerging new production is also important, as new diamond manufacturers have been looking to Dubai as a logical place to sell their diamonds at tenders.
Since traders in diamonds and diamonds are very mobile by their nature, this may be one of the competitive advantages of Dubai, as for the trade in diamonds - this is the airline of Emirates. Meeeus, listing the distinctive features of Dubai, mentions that Emirates connects it with many diamond-mining countries in Africa, including flights to Luanda, Johannesburg and Harare. Dubai's links with Africa are not just logistical. This emirate strengthens economic and political ties with many countries on the continent. The Dubai Diamond Conference, organized by DDE, will be held in April this year, and will be attended by all important diamond mining companies, as well as mining ministers from countries including South Africa, Namibia, Botswana and other countries. "That fact,
When the Antwerp Diamond Bank announced last September that it was curtailing its activities and would not provide new loans, this was seen by many as the symbolic decline of Antwerp. ADB, being the only specialized diamond bank in the industry, provided over 10 percent of total loans in the diamond and diamond financial market and financed 30 percent of traders in Antwerp. With the departure of ADB and taking into account the fact that ABN Amro - another specialized bank that finances the diamond and diamond industry - turns off loans to dealers with diamonds and diamonds, from the amount of financing of the industry in the amount of $ 16 billion, it went up to $ 3 billion, which accounted for these two sources. Fears of a liquidity crisis due to this led to the fact that prices, Which paid for rough diamonds, fell by 6.9% in the last three months of 2014, which is significant in the industry, which traditionally has very low volatility according to commodity market standards. After the announcement that Indian diamond producers will be forced to sell off the stock at a discount, India's Gem & Jewelery Export Promotion Council (GJEPC), the most important body in the country for trading, issued a statement calling News in the news that diamantaires offered discounts of 5-20 percent, "false and groundless."
It coincided that around the same time, when the ADB announced that it was leaving the market, three UAE banks - Emirates NBD, Mashreqbank and National Bank of Fujairah (National Bank of Fujairah) - began offering loans to the diamond and diamond industry in Dubai. In a world where liquidity and the availability of financing is a significant issue for trade, Meuse calls the emergence of borrowers from the UAE "almost a turning point" for the local market. After a recent series of meetings with bankers in Dubai, Elfik believes that the UAE banks are seeking to "securely" capture the financing market and help fill the gap. "Of course, this will take time to attract new customers, study their business and get acquainted with their client scenario. Slowly but surely, other banks are starting to use this opportunity on the market. "
The Dutch bank ABN Amro has an office in Dubai since 2002. Since diamond-diamond trade is international in nature, its banks should also be: ABN Amro operated in major diamond and diamond trading centers, including Mumbai, Antwerp, New York and Hong Kong. Rajiv Jain, the regional head of the ABN Amro Bank in the countries of the Gulf Cooperation Council (GCC), dealing with his clients selling diamonds and jewelry, says that the closure of the ADB bank accelerated the emergence of a proposal from new potential customers - those who Wants to be in the banking service at an institution that has a global presence and understands the diamond and diamond market.
Jain believes that the industry as a whole will benefit from loans from UAE banks for the diamond and diamond sector, and in order to stimulate the entry of local banks into this sector, ABN Amro has been engaged in exchanging experience in this sector over the past two to three years. "We created our own competition," Jain explains, adding that it is safer if they are not the only borrower for the company. "You always want to share the risk." We believe that this will be better for the industry in Dubai in terms of risk diversification. "
Jain says that the key obstacle for the UAE banks is their inadequate presence in global diamond centers. This means, perhaps, a lack of deep understanding of the position of its customers in the case of working with a diamond-diamond group that has enterprises around the world. "Knowledge of what is happening on the market in other diamond centers is not easy to get without direct presence on it," Jain says. But the UAE banks are cautious and conduct a thorough check of security and financial condition, he says. "Local lenders either hired experienced bankers who worked in the diamond and diamond industry, or use the advice of existing banks like ours, and also seek advice on the market from key industry players."
http://www.businessweekme.com/Bloomberg/newsmid/190/newsid/504/The-New-Diamond-Capital
With a cheaper labor force than in the traditional diamond production centers in Antwerp and New York, and with new equipment that facilitated the work, the Indian faceting and polishing industry was booming. Carrying out the cut of small stones, which previously was not considered profitable, Indian diamond producers received more profit. Over time, Indian buyers have risen to a higher level, being already able to buy directly from diamond manufacturers, rather than from wholesalers or dealers. India currently has a dominant role in the polished diamond sector, accounting for more than 80 percent of the world's diamond production. But now it is no longer necessary for Indian diamantaires to go on a long journey to Antwerp. Just three hours from them is Dubai,
In the conservative sector, which for a long time was valued for secrecy and tightly knit partnerships, Dubai's development was staggering. The diamond and diamond trade in the emirate, which in fact did not exist and whose volume in 2001 was less than $ 5 million, in 2013 and 2014 grew into an industry worth about $ 35 billion, according to Peter Meeus, chairman of the Dubai Diamond Exchange Dubai Diamond Exchange, DDE). Antwerp remains the largest diamond trade center in the world, its diamond exports in 2014 reached $ 15.7 billion, compared with the sale of $ 8.3 billion in Dubai, but its market share is constantly decreasing.
The Dubai Diamond Exchange is located in the sparkling Almas Tower near the complex of towers on the artificial island of Jumeirah Lake Towers. This is the highest commercial building in the Middle East, many companies related to trade are located on one of its 68 floors. As for why Dubai's prestige has grown so fast, Meuse, taking such a good place, can appreciate its strengths compared to other jewelry trading centers - formerly the chairman of the DDE was the head of the Antwerp World Diamond Center (AWDC) . He calls Dubai's business-friendly atmosphere as one of the distinctive features for the trade in diamonds and diamonds. Inside the tower, Almas has access to a boiling solution plant to remove dirt and other trace materials from both diamonds and diamonds, and services for storage in a secure storage facility located several floors below the ground (probably the most secure storage in the Middle East ). Companies can also quickly register online at the Dubai Multi Commodities Center, regardless of whether they are in India or New York; Centralization means a reduction in paperwork. Regardless of whether they are in India or in New York; Centralization means a reduction in paperwork. Regardless of whether they are in India or in New York; Centralization means a reduction in paperwork.
The bureaucracy hinders business not only in Europe, but also in India. Many of the diamantaires, who at least once visited Dubai to buy and sell, have now opened their head offices in this emirate. "It's easier," Meeeus explains, noting the presence of a large number of skilled workers in Dubai. But the main reason for the influx of Indian companies may be prosaic: they like the way of life here. Housing in Dubai is more affordable than in Mumbai and other major cities in India, which means a higher level of living conditions for the staff and management of the company. "You can have a very good place for a reasonable amount, compared to Mumbai, where everything is expensive. Many of these huge Indian firms prefer to work here than in crowded Mumbai, "Meeeus says. It's not uncommon that diamantaires work seven days a week, he says.
The fact that Dubai is considered a good place to sell raw materials for the Indian faceting and polishing sector helped to attract sellers with big names, for example, the auction sales company De Beers Auction Sales, which opened its office in Dubai in 2011. Neil Ventura, executive vice president of the company based in Singapore, says that this was done in order to provide more convenient access for Indian-based customers (the company currently does not have a presence in India) and to provide opportunities For new customers in the region who are interested in buying rough diamonds. This step was justified. "We tripled our customer base in Dubai over the past three years and doubled the revenue from the Dubai office to our global sales," Ventura says. "Many [of our customers] are small and medium-sized enterprises that do not have the opportunity to receive rough diamonds from major shopping centers, for example, from Antwerp." Other sellers include the large Russian company ALROSA, which again resumed its Dubai office in November, which was closed earlier due to the crisis.
Business reacted to this attitude when "can-do" prevails in the public and private sectors of Dubai, but like many things in Dubai, the Almas Tower gives a special sheen that is particularly suited to trade in diamonds. "This is an extremely impressive building," says Clifford Elphick, chief executive officer of Gem Diamonds, a diamond mining company with operating mines in Lesotho and Botswana. At its Letšeng site in Lesotho, Gem Diamonds constantly discovers some of the largest diamonds that need to be found now; The speed with which you can carry out customs clearance of diamonds in the Kimberly Process office, by conducting it on the trading floor. "Dealers can fly, check the goods, determine the price, buy them and leave," says Elfik. - Business executives [in Dubai] are actively fighting for market share. They are determined to do this, and they are doing it. It's very wonderful. "
Not only the proximity and communication with India, but also the resource-rich African continent have helped Dubai in development. Most of the diamonds are mined in Africa, and the diamond producing countries include Botswana, South Africa, Angola and Zimbabwe. Although Gem Diamonds is headquartered in Antwerp, Elfick believes that Dubai is attractive, especially for smaller diamond companies who believe that it is easier and more efficient to contact their customers here. "Dubai is slowly but surely steadily improving its position in the world of diamond trade, dealing with diamonds and financing diamonds. Of course, more and more people consider the effectiveness of the Dubai Diamond Trade Center to be attractive. " He explains the growth of Dubai from the point of view of the development of a new axis "north-south" Which connects diamond producing countries in Africa directly with diamond manufacturers in India and the Far East, for which Dubai is a convenient stopping point. "The geographic location of Dubai is extremely advantageous not only for Indian dealers with diamonds from Mumbai and Surat, but also many Israeli companies have found the opportunity to conduct business here. Therefore, there is a connection between the small diamond producers, which are easier, easier and more efficient to contact their customers in India and Israel via Dubai. " But also many Israeli companies found the opportunity to conduct business here. Therefore, there is a connection between the small diamond producers, which are easier, easier and more efficient to contact their customers in India and Israel via Dubai. " But also many Israeli companies found the opportunity to conduct business here. Therefore, there is a connection between the small diamond producers, which are easier, easier and more efficient to contact their customers in India and Israel via Dubai. "
The "north-south" axis became stronger when De Beers transferred its "sites" - regular sales of rough diamonds to its long-term customers - from London to Gaborone, the capital of Botswana. Beneficiation, as is known in the industry, is intended to assist diamond-producing countries by placing additional economic activities, such as cutting and polishing and sales, along with mining. Regular arrivals of buyers to sites (which take place approximately every fifth week) also support the local economy. For many of De Beers sightholders - large buyers of rough diamonds - this move means that now they have one less reason for flights to Europe. Beneficiation brought direct benefits also to Dubai, And as infrastructure is increasingly developing in diamond-producing countries in Africa, Dubai is also benefiting from this. "At the moment, Namibia is reviewing its contracts with De Beers, which can also have an impact on the UAE and, probably, is positive," Meeeus said. Emerging new production is also important, as new diamond manufacturers have been looking to Dubai as a logical place to sell their diamonds at tenders.
Since traders in diamonds and diamonds are very mobile by their nature, this may be one of the competitive advantages of Dubai, as for the trade in diamonds - this is the airline of Emirates. Meeeus, listing the distinctive features of Dubai, mentions that Emirates connects it with many diamond-mining countries in Africa, including flights to Luanda, Johannesburg and Harare. Dubai's links with Africa are not just logistical. This emirate strengthens economic and political ties with many countries on the continent. The Dubai Diamond Conference, organized by DDE, will be held in April this year, and will be attended by all important diamond mining companies, as well as mining ministers from countries including South Africa, Namibia, Botswana and other countries. "That fact,
When the Antwerp Diamond Bank announced last September that it was curtailing its activities and would not provide new loans, this was seen by many as the symbolic decline of Antwerp. ADB, being the only specialized diamond bank in the industry, provided over 10 percent of total loans in the diamond and diamond financial market and financed 30 percent of traders in Antwerp. With the departure of ADB and taking into account the fact that ABN Amro - another specialized bank that finances the diamond and diamond industry - turns off loans to dealers with diamonds and diamonds, from the amount of financing of the industry in the amount of $ 16 billion, it went up to $ 3 billion, which accounted for these two sources. Fears of a liquidity crisis due to this led to the fact that prices, Which paid for rough diamonds, fell by 6.9% in the last three months of 2014, which is significant in the industry, which traditionally has very low volatility according to commodity market standards. After the announcement that Indian diamond producers will be forced to sell off the stock at a discount, India's Gem & Jewelery Export Promotion Council (GJEPC), the most important body in the country for trading, issued a statement calling News in the news that diamantaires offered discounts of 5-20 percent, "false and groundless."
It coincided that around the same time, when the ADB announced that it was leaving the market, three UAE banks - Emirates NBD, Mashreqbank and National Bank of Fujairah (National Bank of Fujairah) - began offering loans to the diamond and diamond industry in Dubai. In a world where liquidity and the availability of financing is a significant issue for trade, Meuse calls the emergence of borrowers from the UAE "almost a turning point" for the local market. After a recent series of meetings with bankers in Dubai, Elfik believes that the UAE banks are seeking to "securely" capture the financing market and help fill the gap. "Of course, this will take time to attract new customers, study their business and get acquainted with their client scenario. Slowly but surely, other banks are starting to use this opportunity on the market. "
The Dutch bank ABN Amro has an office in Dubai since 2002. Since diamond-diamond trade is international in nature, its banks should also be: ABN Amro operated in major diamond and diamond trading centers, including Mumbai, Antwerp, New York and Hong Kong. Rajiv Jain, the regional head of the ABN Amro Bank in the countries of the Gulf Cooperation Council (GCC), dealing with his clients selling diamonds and jewelry, says that the closure of the ADB bank accelerated the emergence of a proposal from new potential customers - those who Wants to be in the banking service at an institution that has a global presence and understands the diamond and diamond market.
Jain believes that the industry as a whole will benefit from loans from UAE banks for the diamond and diamond sector, and in order to stimulate the entry of local banks into this sector, ABN Amro has been engaged in exchanging experience in this sector over the past two to three years. "We created our own competition," Jain explains, adding that it is safer if they are not the only borrower for the company. "You always want to share the risk." We believe that this will be better for the industry in Dubai in terms of risk diversification. "
Jain says that the key obstacle for the UAE banks is their inadequate presence in global diamond centers. This means, perhaps, a lack of deep understanding of the position of its customers in the case of working with a diamond-diamond group that has enterprises around the world. "Knowledge of what is happening on the market in other diamond centers is not easy to get without direct presence on it," Jain says. But the UAE banks are cautious and conduct a thorough check of security and financial condition, he says. "Local lenders either hired experienced bankers who worked in the diamond and diamond industry, or use the advice of existing banks like ours, and also seek advice on the market from key industry players."
http://www.businessweekme.com/Bloomberg/newsmid/190/newsid/504/The-New-Diamond-Capital
Increase in profits when the diamond market begins to replenish its reserves again
Today, the diamond market is on the brink of collapse, and in order to retain at least some chance to regain growth prospects, De Beers will have to reduce prices by 10-20% - and it's not about making profits Diamond processing enterprises. Since prices in 2015 reached the heights, it is simply unrealistic to hold on, the mood in the market fell to the lowest level in six years.
Although reports of bankruptcies, unavailability of loans, low liquidity and even reports of suicides of people on a professional basis, resemble the times of the global crisis, this time is different. Then the decline in the diamond market was due to macroeconomic factors. Last year the difficult situation was provoked by the trade itself, and to a large extent from the supply side.
Therefore, sightholders deserve praise for having abandoned 65% of the goods offered on the De Beers website in July (see the website report here). The authors of this column called on diamond processing companies to abandon the unfavorable acquisitions of rough diamonds for most of the past 12 months (see Rough Price Correction - Part 2, published on January 30). So while De Beers and, for that matter, ALROSA, slightly reduced prices in the first half of the year, these declines were insufficient.
De Beers hoped for an increase in demand for previously deferred goods in the second half of the year. Supporting supplies at a low level - allowing sightholders to postpone the purchase of 25% of the product throughout the year - the company expected that the diamond and diamond reserves of the cutters would be depleted enough for companies to resume purchases for the holiday season.
However, diamond manufacturers are not ready to buy goods, if their acquisition is unprofitable - these are the basic principles of the economy. They make their decisions on buying rough diamonds based on (falling) prices for diamonds, and not on the basis of long-term supply interests. If the price of diamonds is not matched with the price of diamonds, diamantaires will refuse the goods on the next site, scheduled for the week of August 24-30.
Deliveries for the holiday season from surplus diamonds
There remain questions about whether there will be a sharp drop in prices enough to stimulate the purchase of rough diamonds. Perhaps, diamantaires are even happy that they do not deal with the diamond market, trying to reduce their large stocks of diamonds. As one of the sightholders told Rapaport News, jewelers will receive supplies [for the festive season] mainly from surplus diamonds, not from diamond mining companies, since rough diamonds are almost not involved in the supply system.
This may help to some extent normalize the market in January, when stocks will decrease enough to stimulate demand after the holiday season. Taking into account the fact that the traditional replenishment of reserves did not occur in the first quarter of 2015, and in June nothing was done, it will happen at the latest in 2016.
Analyst RBC Capital Markets Des Kilalea suggests that De Beers strategy is rather to try to keep prices and sacrifice sales volumes in the hope that current prices will be perceived as reasonable in 2016, when it will be possible Sell large volumes of diamonds. "The problem for De Beers is that if prices fall by 10-15%, three years will be needed to return to the current level," he suggests.
The problem for diamond manufacturers, however, is that if prices for rough diamonds do not drop, in January supplies will continue to be unprofitable. Prices for diamonds are still under pressure, and their noticeable growth in 2015 is not expected.
The vicious circle will continue
Diamond producers should be confident of a steady increase in profits when the diamond market begins to replenish its reserves again. If the expected rise in diamond prices, in turn, will be an incentive for the price increase for diamonds in 2016 compared with the current as a starting point, the price race will begin again, and the vicious cycle will continue.
All this leads us to the consequences for Anglo American, which owns an 85% stake in De Beers. Although in 2014 De Beers was the best asset for Anglo American in terms of financial performance, Kilali predicts that the financial return of the diamond unit, which is due to report on July 24, in the first half of 2015 was reduced by 50%. This would mean "another financial blow" for the mining conglomerate, Kilali wrote in the publication of a memorandum before investors for publication.
Losing money Anglo American would not like to see a low sales volume coupled with substantially lower prices in the second half of 2015. Sales on the July site, which are estimated at $ 200 million, already represent a significant reduction in comparison with previous years. In July and August, sites are traditionally the largest in the year, when diamond producers store raw materials for the festive season.
http://www.diamonds.net/News/NewsItem.aspx?ArticleID=52904&ArticleTitle=The+Futility+of+Chasing+Rough+Shadows
Although reports of bankruptcies, unavailability of loans, low liquidity and even reports of suicides of people on a professional basis, resemble the times of the global crisis, this time is different. Then the decline in the diamond market was due to macroeconomic factors. Last year the difficult situation was provoked by the trade itself, and to a large extent from the supply side.
Therefore, sightholders deserve praise for having abandoned 65% of the goods offered on the De Beers website in July (see the website report here). The authors of this column called on diamond processing companies to abandon the unfavorable acquisitions of rough diamonds for most of the past 12 months (see Rough Price Correction - Part 2, published on January 30). So while De Beers and, for that matter, ALROSA, slightly reduced prices in the first half of the year, these declines were insufficient.
De Beers hoped for an increase in demand for previously deferred goods in the second half of the year. Supporting supplies at a low level - allowing sightholders to postpone the purchase of 25% of the product throughout the year - the company expected that the diamond and diamond reserves of the cutters would be depleted enough for companies to resume purchases for the holiday season.
However, diamond manufacturers are not ready to buy goods, if their acquisition is unprofitable - these are the basic principles of the economy. They make their decisions on buying rough diamonds based on (falling) prices for diamonds, and not on the basis of long-term supply interests. If the price of diamonds is not matched with the price of diamonds, diamantaires will refuse the goods on the next site, scheduled for the week of August 24-30.
Deliveries for the holiday season from surplus diamonds
There remain questions about whether there will be a sharp drop in prices enough to stimulate the purchase of rough diamonds. Perhaps, diamantaires are even happy that they do not deal with the diamond market, trying to reduce their large stocks of diamonds. As one of the sightholders told Rapaport News, jewelers will receive supplies [for the festive season] mainly from surplus diamonds, not from diamond mining companies, since rough diamonds are almost not involved in the supply system.
This may help to some extent normalize the market in January, when stocks will decrease enough to stimulate demand after the holiday season. Taking into account the fact that the traditional replenishment of reserves did not occur in the first quarter of 2015, and in June nothing was done, it will happen at the latest in 2016.
Analyst RBC Capital Markets Des Kilalea suggests that De Beers strategy is rather to try to keep prices and sacrifice sales volumes in the hope that current prices will be perceived as reasonable in 2016, when it will be possible Sell large volumes of diamonds. "The problem for De Beers is that if prices fall by 10-15%, three years will be needed to return to the current level," he suggests.
The problem for diamond manufacturers, however, is that if prices for rough diamonds do not drop, in January supplies will continue to be unprofitable. Prices for diamonds are still under pressure, and their noticeable growth in 2015 is not expected.
The vicious circle will continue
Diamond producers should be confident of a steady increase in profits when the diamond market begins to replenish its reserves again. If the expected rise in diamond prices, in turn, will be an incentive for the price increase for diamonds in 2016 compared with the current as a starting point, the price race will begin again, and the vicious cycle will continue.
All this leads us to the consequences for Anglo American, which owns an 85% stake in De Beers. Although in 2014 De Beers was the best asset for Anglo American in terms of financial performance, Kilali predicts that the financial return of the diamond unit, which is due to report on July 24, in the first half of 2015 was reduced by 50%. This would mean "another financial blow" for the mining conglomerate, Kilali wrote in the publication of a memorandum before investors for publication.
Losing money Anglo American would not like to see a low sales volume coupled with substantially lower prices in the second half of 2015. Sales on the July site, which are estimated at $ 200 million, already represent a significant reduction in comparison with previous years. In July and August, sites are traditionally the largest in the year, when diamond producers store raw materials for the festive season.
http://www.diamonds.net/News/NewsItem.aspx?ArticleID=52904&ArticleTitle=The+Futility+of+Chasing+Rough+Shadows
View of achieving successful sales
The activities of De Beers Consolidated Mines (DBCM) further reduced due to the proposed sale of the mines of Kimberley (Kimberley Mines), but Philip Barton (Philip Barton), Chief Executive Officer Of the company, believes that DBCM has several surprises in store for its followers.
"We are actively conducting geological exploration in South Africa. We really believe that there are still a few mines in the country that meet the criteria of De Beers and Anglo American, "he says.
DBCM spends about R30 million on geological exploration. "We have just circled a fairly large area, using new geophysical technology to detect certain targets. Based on our results obtained from a rather large number of geological exploration licenses, to which applications were submitted - for which the majority was issued - we will conduct ground-based geophysical surveys that will enable us to identify targets.
"We regularly find goals that lead us to undiscovered kimberlites [geological formations], but not all kimberlites contain diamonds. In fact, a very small number of them contains enough diamonds to develop an effective mine. Approximately one out of every 1000 kimberlites can give us an economically feasible mine.
"The reason for our optimism is that a comparison of the geology of South Africa and the rest of the world shows that South Africa is one of the most interesting geological places in the world. A number of diamond mines, which the country created, confirm the geological importance for the production of diamonds, "- says Barton.
De Beers has been studying South Africa for many decades, but the current volumes of geological data began to be preserved since the late 1950s. De Beers has a huge database with this data logging.
"We assume that in these data a number of deposits are hidden. There were discovered easily accessible deposits, where you literally stumble on a naked rock of diamond ore.
The remaining kimberlites are either hidden under a considerable layer, or they are kimberlites that do not have the characteristic features that we know. Therefore, traditional methods did not indicate the presence of such kimberlites.
If a new technology and advanced theory are used, with which we learned about kimberlites using old data, we can get interesting results. According to data obtained in the past, we learned that some of the known kimberlites were 10 times larger than we originally thought. The diamond content was not sufficient to justify the deposit, but this gives the idea that somewhere among these data there is a deposit, "Barton says.
De Beers has a group working full time, conducting a study of these data. "We are very optimistic - we will still find the deposit in this way," he says.
Anglo American investment criteria are that it seeks to invest in the so-called "first-tier" assets, but the value of a diamond mine is determined not only by its size. You can find smaller deposits that give diamonds of excellent quality.
"Therefore, you may have a" second-tier "deposit, which is extremely lucrative, like our Victor mine in Canada. It is a small mine, but it produces valuable diamonds.
As soon as we find the mine, we will sit down with Anglo and decide whether we will develop it or give it to someone else. At the moment, we have focused on his search, "said Burton, with a big smile.
But the near future of De Beers in South Africa depends on the northern part of the country, the Venetia mine, where it spends over R20 billion to develop an underground mine below the huge current open pit.
"We are now setting the task of issuing the first volume from the underground mine in 2021 and reach full capacity by 2024," says Barton. The project is fully funded from internal sources. The current weakening of the diamond market did not affect the financing of the underground mine. "We are still earning enough money to pay on our own," he says.
The underground mine will extend the life of the Venice mine until the beginning of the 2040s with a production volume of 4.5 to 5 million carats per year. The mine has a number of options for the mining of these three kimberlite pipes.
The inclined mining output reached a depth of 650 meters, and the technological withdrawal of the main lifting shaft was recently completed. At the present time, supercharging coppers are being built for the main lifting shaft and maintenance.
At the Venice mine there are three main tubes and several smaller tubes. K1 - the tube of the field, can yield 6 million carats per year. The factory at the Venice mine was originally designed for processing 4.8 million tons a year, but later it was improved and now can process 6 million tons.
"But as the underground mine develops, the production profile will increase and replace 18% of our current production, which we will lose because of the sale of Kimberly mines. There will be some decline, but it will last for a relatively short time, "says Barton.
It's probably not the best time to sell Kimberly in terms of price, Barton admits.
"The market for diamonds is now somewhat weakened, but if you look at it from the point of view of achieving successful sales, this is the right moment, and all our previous sales were also successful, and they are still being produced. Kimberly still has resources of tailings with a relatively high content. "
Now the buyer is offered a combination of high and low content. A great advantage of the Kimberly mines is the low-content material, which will last at least until 2030. Providing the buyer an initial advantage of the order of three years due to materials with a high content gives a better chance of maintaining the activity for a longer period.
http://www.miningmx.com/page/special_reports/mining-yearbook/mining-yearbook-2015/1653118-De-Beers-looks-to-SA-with-fresh-eyes#.Vb_Dnfntmkr
"We are actively conducting geological exploration in South Africa. We really believe that there are still a few mines in the country that meet the criteria of De Beers and Anglo American, "he says.
DBCM spends about R30 million on geological exploration. "We have just circled a fairly large area, using new geophysical technology to detect certain targets. Based on our results obtained from a rather large number of geological exploration licenses, to which applications were submitted - for which the majority was issued - we will conduct ground-based geophysical surveys that will enable us to identify targets.
"We regularly find goals that lead us to undiscovered kimberlites [geological formations], but not all kimberlites contain diamonds. In fact, a very small number of them contains enough diamonds to develop an effective mine. Approximately one out of every 1000 kimberlites can give us an economically feasible mine.
"The reason for our optimism is that a comparison of the geology of South Africa and the rest of the world shows that South Africa is one of the most interesting geological places in the world. A number of diamond mines, which the country created, confirm the geological importance for the production of diamonds, "- says Barton.
De Beers has been studying South Africa for many decades, but the current volumes of geological data began to be preserved since the late 1950s. De Beers has a huge database with this data logging.
"We assume that in these data a number of deposits are hidden. There were discovered easily accessible deposits, where you literally stumble on a naked rock of diamond ore.
The remaining kimberlites are either hidden under a considerable layer, or they are kimberlites that do not have the characteristic features that we know. Therefore, traditional methods did not indicate the presence of such kimberlites.
If a new technology and advanced theory are used, with which we learned about kimberlites using old data, we can get interesting results. According to data obtained in the past, we learned that some of the known kimberlites were 10 times larger than we originally thought. The diamond content was not sufficient to justify the deposit, but this gives the idea that somewhere among these data there is a deposit, "Barton says.
De Beers has a group working full time, conducting a study of these data. "We are very optimistic - we will still find the deposit in this way," he says.
Anglo American investment criteria are that it seeks to invest in the so-called "first-tier" assets, but the value of a diamond mine is determined not only by its size. You can find smaller deposits that give diamonds of excellent quality.
"Therefore, you may have a" second-tier "deposit, which is extremely lucrative, like our Victor mine in Canada. It is a small mine, but it produces valuable diamonds.
As soon as we find the mine, we will sit down with Anglo and decide whether we will develop it or give it to someone else. At the moment, we have focused on his search, "said Burton, with a big smile.
But the near future of De Beers in South Africa depends on the northern part of the country, the Venetia mine, where it spends over R20 billion to develop an underground mine below the huge current open pit.
"We are now setting the task of issuing the first volume from the underground mine in 2021 and reach full capacity by 2024," says Barton. The project is fully funded from internal sources. The current weakening of the diamond market did not affect the financing of the underground mine. "We are still earning enough money to pay on our own," he says.
The underground mine will extend the life of the Venice mine until the beginning of the 2040s with a production volume of 4.5 to 5 million carats per year. The mine has a number of options for the mining of these three kimberlite pipes.
The inclined mining output reached a depth of 650 meters, and the technological withdrawal of the main lifting shaft was recently completed. At the present time, supercharging coppers are being built for the main lifting shaft and maintenance.
At the Venice mine there are three main tubes and several smaller tubes. K1 - the tube of the field, can yield 6 million carats per year. The factory at the Venice mine was originally designed for processing 4.8 million tons a year, but later it was improved and now can process 6 million tons.
"But as the underground mine develops, the production profile will increase and replace 18% of our current production, which we will lose because of the sale of Kimberly mines. There will be some decline, but it will last for a relatively short time, "says Barton.
It's probably not the best time to sell Kimberly in terms of price, Barton admits.
"The market for diamonds is now somewhat weakened, but if you look at it from the point of view of achieving successful sales, this is the right moment, and all our previous sales were also successful, and they are still being produced. Kimberly still has resources of tailings with a relatively high content. "
Now the buyer is offered a combination of high and low content. A great advantage of the Kimberly mines is the low-content material, which will last at least until 2030. Providing the buyer an initial advantage of the order of three years due to materials with a high content gives a better chance of maintaining the activity for a longer period.
http://www.miningmx.com/page/special_reports/mining-yearbook/mining-yearbook-2015/1653118-De-Beers-looks-to-SA-with-fresh-eyes#.Vb_Dnfntmkr
This would also reduce competition
From the retailers in the middle of America to diamond manufacturers in India, from cutters in Israel to traders in diamonds in Antwerp and diamond miners in Africa, the global diamond and diamond industry seems tired, pessimistic and gloomy. Everyone in the diamond pipeline is seeing a decline in sales and a decrease in turnover, and improvement is far on the horizon, which is constantly being removed. But still there is a glimmer of hope.
WEB SITE № 6 DE BEERS: "I CARE ABOUT MY BUSINESS; YOU CARE ABOUT YOURSELF »
Site number 6 was initially estimated at $ 600- $ 650 million, judging by the intention to make an offer (ITO). Now it seems that ITO was even lower: $ 500 million plus another $ 50 million for goods sold at a special discounted price, probably because of the large number of deferred purchases.
In fact, the site was below half of this figure - $ 150- $ 200 million after sightholders had postponed their volumes and then refused most of the offer. Anyway, on the site in July the sightholders preferred not to buy out about 60% -70%.
Some sightholders took only one or two boxes from their entire volume on the site. Some have postponed part of their goods and have given up everything without buying anything at all. Some did not even bother to appear on the site. Companies that in the past hardly looked at the goods and took everything as they are, now abandoned the large volumes of the goods offered to them. This level of lack of interest in buying, probably never happened before.
Thus, it was a turning point for the industry. In March, sightholders declined about 30% of the site, and this was a rarity, bringing some sightholders a sense of satisfaction. This time, it's not that they feel how they changed the situation. As one sightholder said: "People listened to the advice of Philippe Melier [De Beers chief executive]:" I care about my business; You take care of your own. ""
In recent months, Melle spoke of this several times, and sightholders, an easily adaptable group of people (if any), clearly heard and understood him. This was a turning point, because sightholders, who for months declared that the offer they had offered was not economically viable and still continued to buy, decided to make an economically very profitable step and simply not buy something that does not meet their needs. It's about taking care of your business.
From the point of view of sightholders, the recent rejection of a large number of diamonds makes sense. If diamonds obtained from diamonds are not sold, or if their stocks are high and do not decline at a rate that justifies the purchase of additional diamonds, or if the price of diamonds does not allow them to make a profit, then the refusal makes sense. But what is good for diamond manufacturers is not so good for De Beers.
ABOVE BILLION DOLLARS ON LOST SALES
After the March site it was established that in the first quarter of this year, diamonds worth more than half a billion dollars, which remained in the hands of De Beers, were abandoned. The last site was abandoned by diamonds for an additional $ 300- $ 350 million.
For the first six months of 2015 (five sites), sales decreased by 5 million carats. In total, diamond sales decreased by 26% in volume to 14 million carats, and total sales fell 27% to 13.3 million carats, according to the parent company Anglo American.
In total, the decrease was 4.8 million carats. At an average cost of $ 206 per carat for the first five sites of this year, De Beers lost sales by about $ 1 billion. Add another $ 300- $ 350 million for diamonds, which were abandoned on site # 6, and this figure grows to $ 1.3 billion - a significant figure for the company, whose receipts in 2014 amounted to $ 7 billion and a lot of stocks in stock.
De Beers raised prices for some products on site No. 6 and reduced them to others. Some price changes made sense - to products of reduced demand, a change in the range, etc. - these are the usual price adjustments. But now the times are not ordinary. In general, De Beers continues to decline prices, but sometimes there are big questions. For example, the price of a pair of still low-profit boxes increased, leaving the sightholders no opportunity to profit.
One insider explained that the company is trying to keep its price index from slipping, so prices rise where possible. From a broader perspective, it seems that something more serious is needed. In 2009, at some time De Beers offered a wide range of mixed goods and sold it at one price. So it was difficult to see if there was actually a price reduction, which did not significantly affect the value of stocks. Now there is an intention, at least, a proposal that De Beers do the same in August.
Another proposal - a sharp decline in prices, is a step that establishes a correspondence between the price of diamonds and the price of diamonds and restores profitability for diamond producers. The conversation is about a price reduction of about 20 percent. In this scenario, everyone will pay a price - De Beers, sightholders and wholesalers - is a radical and painful measure, similar to an urgent surgical operation, in which the benefit of treatment outweighs the pain.
It is so cardinal that it can even lead to a chain of bankruptcies. In those quarters, when this idea was applied, it was not necessarily considered bad, but on the contrary. "Let it be so," said one man. It can be assumed that many would fully agree to say goodbye to companies that do not manage their stocks properly. This would also reduce competition.
Taking into account so many grievances and bitterness among sightholders, a large-scale reduction in prices is acceptable, and most of them want it. It is necessary to take into account that price reduction is not a goal, but a signal and means - a signal that demand has contracted and a means of returning profitability.
A WEAK RECEPTION IN THE DIAMOND-BRILLIANT INDUSTRY
In social networks, more talk about the recession in the diamond and diamond industry, mainly coming from India, the global diamond production center. Most of these conversations - on Twitter and Facebook - are about increasing workforce cuts, and - sadly - even about suicides.
Indian labor, especially people working in small independent enterprises, accepting orders, as well as small companies, pay a high price. The consequences are far-reaching. A family that loses a father is a huge tragedy, and this must be remembered.
PRODUCTION VOLUMES OF DE BEERS REFLECT TIME, PRICES REFLECT THEM IN A LITTLE DEGREE
Last week, Anglo American reported that diamond production by De Beers fell by 6% to 8 million carats in the second quarter, mainly due to a decrease in content and a decrease in the plant's workload at the Orapa mine. Production fell sharply at the tailings processing plants in the Venetia and Jwaneng mines in response to the softening of terms of trade, Anglo reports.
Production has actually declined in every country where De Beers has mines. In Botswana, production fell by 6%, in South Africa fell by 5%, in Namibia, production fell by 15%, and in Canada by 11%.
http://edahngolan.com/how-sightholders-take-care-of-business-a-market-report/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=966d40a0cf-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-966d40a0cf-319355397
WEB SITE № 6 DE BEERS: "I CARE ABOUT MY BUSINESS; YOU CARE ABOUT YOURSELF »
Site number 6 was initially estimated at $ 600- $ 650 million, judging by the intention to make an offer (ITO). Now it seems that ITO was even lower: $ 500 million plus another $ 50 million for goods sold at a special discounted price, probably because of the large number of deferred purchases.
In fact, the site was below half of this figure - $ 150- $ 200 million after sightholders had postponed their volumes and then refused most of the offer. Anyway, on the site in July the sightholders preferred not to buy out about 60% -70%.
Some sightholders took only one or two boxes from their entire volume on the site. Some have postponed part of their goods and have given up everything without buying anything at all. Some did not even bother to appear on the site. Companies that in the past hardly looked at the goods and took everything as they are, now abandoned the large volumes of the goods offered to them. This level of lack of interest in buying, probably never happened before.
Thus, it was a turning point for the industry. In March, sightholders declined about 30% of the site, and this was a rarity, bringing some sightholders a sense of satisfaction. This time, it's not that they feel how they changed the situation. As one sightholder said: "People listened to the advice of Philippe Melier [De Beers chief executive]:" I care about my business; You take care of your own. ""
In recent months, Melle spoke of this several times, and sightholders, an easily adaptable group of people (if any), clearly heard and understood him. This was a turning point, because sightholders, who for months declared that the offer they had offered was not economically viable and still continued to buy, decided to make an economically very profitable step and simply not buy something that does not meet their needs. It's about taking care of your business.
From the point of view of sightholders, the recent rejection of a large number of diamonds makes sense. If diamonds obtained from diamonds are not sold, or if their stocks are high and do not decline at a rate that justifies the purchase of additional diamonds, or if the price of diamonds does not allow them to make a profit, then the refusal makes sense. But what is good for diamond manufacturers is not so good for De Beers.
ABOVE BILLION DOLLARS ON LOST SALES
After the March site it was established that in the first quarter of this year, diamonds worth more than half a billion dollars, which remained in the hands of De Beers, were abandoned. The last site was abandoned by diamonds for an additional $ 300- $ 350 million.
For the first six months of 2015 (five sites), sales decreased by 5 million carats. In total, diamond sales decreased by 26% in volume to 14 million carats, and total sales fell 27% to 13.3 million carats, according to the parent company Anglo American.
In total, the decrease was 4.8 million carats. At an average cost of $ 206 per carat for the first five sites of this year, De Beers lost sales by about $ 1 billion. Add another $ 300- $ 350 million for diamonds, which were abandoned on site # 6, and this figure grows to $ 1.3 billion - a significant figure for the company, whose receipts in 2014 amounted to $ 7 billion and a lot of stocks in stock.
De Beers raised prices for some products on site No. 6 and reduced them to others. Some price changes made sense - to products of reduced demand, a change in the range, etc. - these are the usual price adjustments. But now the times are not ordinary. In general, De Beers continues to decline prices, but sometimes there are big questions. For example, the price of a pair of still low-profit boxes increased, leaving the sightholders no opportunity to profit.
One insider explained that the company is trying to keep its price index from slipping, so prices rise where possible. From a broader perspective, it seems that something more serious is needed. In 2009, at some time De Beers offered a wide range of mixed goods and sold it at one price. So it was difficult to see if there was actually a price reduction, which did not significantly affect the value of stocks. Now there is an intention, at least, a proposal that De Beers do the same in August.
Another proposal - a sharp decline in prices, is a step that establishes a correspondence between the price of diamonds and the price of diamonds and restores profitability for diamond producers. The conversation is about a price reduction of about 20 percent. In this scenario, everyone will pay a price - De Beers, sightholders and wholesalers - is a radical and painful measure, similar to an urgent surgical operation, in which the benefit of treatment outweighs the pain.
It is so cardinal that it can even lead to a chain of bankruptcies. In those quarters, when this idea was applied, it was not necessarily considered bad, but on the contrary. "Let it be so," said one man. It can be assumed that many would fully agree to say goodbye to companies that do not manage their stocks properly. This would also reduce competition.
Taking into account so many grievances and bitterness among sightholders, a large-scale reduction in prices is acceptable, and most of them want it. It is necessary to take into account that price reduction is not a goal, but a signal and means - a signal that demand has contracted and a means of returning profitability.
A WEAK RECEPTION IN THE DIAMOND-BRILLIANT INDUSTRY
In social networks, more talk about the recession in the diamond and diamond industry, mainly coming from India, the global diamond production center. Most of these conversations - on Twitter and Facebook - are about increasing workforce cuts, and - sadly - even about suicides.
Indian labor, especially people working in small independent enterprises, accepting orders, as well as small companies, pay a high price. The consequences are far-reaching. A family that loses a father is a huge tragedy, and this must be remembered.
PRODUCTION VOLUMES OF DE BEERS REFLECT TIME, PRICES REFLECT THEM IN A LITTLE DEGREE
Last week, Anglo American reported that diamond production by De Beers fell by 6% to 8 million carats in the second quarter, mainly due to a decrease in content and a decrease in the plant's workload at the Orapa mine. Production fell sharply at the tailings processing plants in the Venetia and Jwaneng mines in response to the softening of terms of trade, Anglo reports.
Production has actually declined in every country where De Beers has mines. In Botswana, production fell by 6%, in South Africa fell by 5%, in Namibia, production fell by 15%, and in Canada by 11%.
http://edahngolan.com/how-sightholders-take-care-of-business-a-market-report/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=966d40a0cf-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-966d40a0cf-319355397
Correlation between the price of uncut diamonds and the price of polished diamonds and restores profitability for diamond producers
From the retailers in the middle of America to diamond manufacturers in India, from cutters in Israel to traders in diamonds in Antwerp and diamond miners in Africa, the global diamond and diamond industry seems tired, pessimistic and gloomy. Everyone in the diamond pipeline is seeing a decline in sales and a decrease in turnover, and improvement is far on the horizon, which is constantly being removed. But still there is a glimmer of hope.
WEB SITE № 6 DE BEERS: "I CARE ABOUT MY BUSINESS; YOU CARE ABOUT YOURSELF »
Site number 6 was initially estimated at $ 600- $ 650 million, judging by the intention to make an offer (ITO). Now it seems that ITO was even lower: $ 500 million plus another $ 50 million for goods sold at a special discounted price, probably because of the large number of deferred purchases.
In fact, the site was below half of this figure - $ 150- $ 200 million after sightholders had postponed their volumes and then refused most of the offer. Anyway, on the site in July the sightholders preferred not to buy out about 60% -70%.
Some sightholders took only one or two boxes from their entire volume on the site. Some have postponed part of their goods and have given up everything without buying anything at all. Some did not even bother to appear on the site. Companies that in the past hardly looked at the goods and took everything as they are, now abandoned the large volumes of the goods offered to them. This level of lack of interest in buying, probably never happened before.
Thus, it was a turning point for the industry. In March, sightholders declined about 30% of the site, and this was a rarity, bringing some sightholders a sense of satisfaction. This time, it's not that they feel how they changed the situation. As one sightholder said: "People listened to the advice of Philippe Melier [De Beers chief executive]:" I care about my business; You take care of your own. ""
In recent months, Melle spoke of this several times, and sightholders, an easily adaptable group of people (if any), clearly heard and understood him. This was a turning point, because sightholders, who for months declared that the offer they had offered was not economically viable and still continued to buy, decided to make an economically very profitable step and simply not buy something that does not meet their needs. It's about taking care of your business.
From the point of view of sightholders, the recent rejection of a large number of diamonds makes sense. If diamonds obtained from diamonds are not sold, or if their stocks are high and do not decline at a rate that justifies the purchase of additional diamonds, or if the price of diamonds does not allow them to make a profit, then the refusal makes sense. But what is good for diamond manufacturers is not so good for De Beers.
ABOVE BILLION DOLLARS ON LOST SALES
After the March site it was established that in the first quarter of this year, diamonds worth more than half a billion dollars, which remained in the hands of De Beers, were abandoned. The last site was abandoned by diamonds for an additional $ 300- $ 350 million.
For the first six months of 2015 (five sites), sales decreased by 5 million carats. In total, diamond sales decreased by 26% in volume to 14 million carats, and total sales fell 27% to 13.3 million carats, according to the parent company Anglo American.
In total, the decrease was 4.8 million carats. At an average cost of $ 206 per carat for the first five sites of this year, De Beers lost sales by about $ 1 billion. Add another $ 300- $ 350 million for diamonds, which were abandoned on site # 6, and this figure grows to $ 1.3 billion - a significant figure for the company, whose receipts in 2014 amounted to $ 7 billion and a lot of stocks in stock.
De Beers raised prices for some products on site No. 6 and reduced them to others. Some price changes made sense - to products of reduced demand, a change in the range, etc. - these are the usual price adjustments. But now the times are not ordinary. In general, De Beers continues to decline prices, but sometimes there are big questions. For example, the price of a pair of still low-profit boxes increased, leaving the sightholders no opportunity to profit.
One insider explained that the company is trying to keep its price index from slipping, so prices rise where possible. From a broader perspective, it seems that something more serious is needed. In 2009, at some time De Beers offered a wide range of mixed goods and sold it at one price. So it was difficult to see if there was actually a price reduction, which did not significantly affect the value of stocks. Now there is an intention, at least, a proposal that De Beers do the same in August.
Another proposal - a sharp decline in prices, is a step that establishes a correspondence between the price of uncut diamonds and the price of polished diamonds and restores profitability for diamond producers. The conversation is about a price reduction of about 20 percent. In this scenario, everyone will pay a price - De Beers, sightholders and wholesalers - is a radical and painful measure, similar to an urgent surgical operation, in which the benefit of treatment outweighs the pain.
http://edahngolan.com/how-sightholders-take-care-of-business-a-market-report/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=966d40a0cf-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-966d40a0cf-319355397
WEB SITE № 6 DE BEERS: "I CARE ABOUT MY BUSINESS; YOU CARE ABOUT YOURSELF »
Site number 6 was initially estimated at $ 600- $ 650 million, judging by the intention to make an offer (ITO). Now it seems that ITO was even lower: $ 500 million plus another $ 50 million for goods sold at a special discounted price, probably because of the large number of deferred purchases.
In fact, the site was below half of this figure - $ 150- $ 200 million after sightholders had postponed their volumes and then refused most of the offer. Anyway, on the site in July the sightholders preferred not to buy out about 60% -70%.
Some sightholders took only one or two boxes from their entire volume on the site. Some have postponed part of their goods and have given up everything without buying anything at all. Some did not even bother to appear on the site. Companies that in the past hardly looked at the goods and took everything as they are, now abandoned the large volumes of the goods offered to them. This level of lack of interest in buying, probably never happened before.
Thus, it was a turning point for the industry. In March, sightholders declined about 30% of the site, and this was a rarity, bringing some sightholders a sense of satisfaction. This time, it's not that they feel how they changed the situation. As one sightholder said: "People listened to the advice of Philippe Melier [De Beers chief executive]:" I care about my business; You take care of your own. ""
In recent months, Melle spoke of this several times, and sightholders, an easily adaptable group of people (if any), clearly heard and understood him. This was a turning point, because sightholders, who for months declared that the offer they had offered was not economically viable and still continued to buy, decided to make an economically very profitable step and simply not buy something that does not meet their needs. It's about taking care of your business.
From the point of view of sightholders, the recent rejection of a large number of diamonds makes sense. If diamonds obtained from diamonds are not sold, or if their stocks are high and do not decline at a rate that justifies the purchase of additional diamonds, or if the price of diamonds does not allow them to make a profit, then the refusal makes sense. But what is good for diamond manufacturers is not so good for De Beers.
ABOVE BILLION DOLLARS ON LOST SALES
After the March site it was established that in the first quarter of this year, diamonds worth more than half a billion dollars, which remained in the hands of De Beers, were abandoned. The last site was abandoned by diamonds for an additional $ 300- $ 350 million.
For the first six months of 2015 (five sites), sales decreased by 5 million carats. In total, diamond sales decreased by 26% in volume to 14 million carats, and total sales fell 27% to 13.3 million carats, according to the parent company Anglo American.
In total, the decrease was 4.8 million carats. At an average cost of $ 206 per carat for the first five sites of this year, De Beers lost sales by about $ 1 billion. Add another $ 300- $ 350 million for diamonds, which were abandoned on site # 6, and this figure grows to $ 1.3 billion - a significant figure for the company, whose receipts in 2014 amounted to $ 7 billion and a lot of stocks in stock.
De Beers raised prices for some products on site No. 6 and reduced them to others. Some price changes made sense - to products of reduced demand, a change in the range, etc. - these are the usual price adjustments. But now the times are not ordinary. In general, De Beers continues to decline prices, but sometimes there are big questions. For example, the price of a pair of still low-profit boxes increased, leaving the sightholders no opportunity to profit.
One insider explained that the company is trying to keep its price index from slipping, so prices rise where possible. From a broader perspective, it seems that something more serious is needed. In 2009, at some time De Beers offered a wide range of mixed goods and sold it at one price. So it was difficult to see if there was actually a price reduction, which did not significantly affect the value of stocks. Now there is an intention, at least, a proposal that De Beers do the same in August.
Another proposal - a sharp decline in prices, is a step that establishes a correspondence between the price of uncut diamonds and the price of polished diamonds and restores profitability for diamond producers. The conversation is about a price reduction of about 20 percent. In this scenario, everyone will pay a price - De Beers, sightholders and wholesalers - is a radical and painful measure, similar to an urgent surgical operation, in which the benefit of treatment outweighs the pain.
http://edahngolan.com/how-sightholders-take-care-of-business-a-market-report/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=966d40a0cf-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-966d40a0cf-319355397
Customers resist against high commodity prices
"De Beers does not feel love". This subheading in the message of analyst RBC Capital Markets Des Kilalea (Des Kilalea) shareholders of the company Anglo American and other corporate investors puzzled. Perhaps in this way, with the usual English restraint, the feelings of DTC's customers were reflected in their once-beloved supplier of rough diamonds.
Kilali talks about lost love, not only because of too high prices for rough diamonds, but mainly because of the perception of the situation and the growing belief that wrong strategies have caused a worsening situation in the middle of the diamond supply chain. Any participant in recent public events in India and Tel Aviv felt disappointed, bordering on hostility - and mainly towards De Beers.
Objectively speaking, the prices for ALROSA rough diamonds follow very closely and, perhaps, even reflect the trends observed in De Beers. However, De Beers is still perceived as a company that sets prices in the industry, followed by ALROSA, Rio Tinto and others.
The DTC hosteller from New York recently reminded me that when his company was visited by Philippe Mellier, CEO and president of De Beers, he bluntly stated that if you can not make money on our raw materials, do not buy it. This is exactly what the DTC sightholders are doing: they stop buying rough diamonds (or reduce the volume of their purchases). Sightholder did not mention ALROSA, although he should have.
This situation reminds me of the film "From Russia with Love" from a series of James Bond films in which a British spy voluntarily gets involved in an adventure with murder, which also features a naive Russian beauty, in order to find a Soviet encryption device stolen by somebody, A hostile organization. Half a century ago, James Bond showed us that ultimately love, whatever it may be, can lead to dangerous consequences.
Kilali's words that De Beers does not feel love, can also refer to Anglo American. In diamond mining, the largest amount of additional revenue comes from an additional amount of raw materials: after a critical point has been passed (ie, when the cost of production, unforeseen expenses and other costs have paid off), each additional stone directly affects the final profit of the company. [...] The decrease in volumes also directly affects the final profit, and it is more difficult to reconcile with a public company such as Anglo American - than ALROSA, which, in fact, belongs to the state.
Strategic maneuverability in difficult times
The weakness of the diamond market is evidenced by the refusals and deferrals of purchases from both De Beers and ALROSA. Both companies face the same market problems (reduced demand in China and others), but the different organization of ALROSA and De Beers suggests different strategies for dealing with the crisis. Moreover, De Beers produces diamonds mainly in Africa (and a small part in Canada), and ALROSA mainly in Russia and slightly in Angola. There are geopolitical problems that can not be discounted. A movie about James Bond in the background of the Cold War is in the past. Or not?
According to Kilali, ALROSA is also dealing with unique difficulties beyond its control. Among them - the threat of tightening sanctions against Russia (due to the conflict in Ukraine) and their impact on the ruble. (Although rarely told publicly, there was a time when Europe was thinking about imposing sanctions on Russian diamonds, but Belgium was able to prevent it.) In addition, ALROSA is controlled by the state and local government (approximately 77%) with limited liquidity of capital . Although the weak ruble is favorable for profitability, these problems increase the risks for non-governmental shareholders of the company, whose business can be called healthy by all standards.
However, unlike ALROSA, De Beers through Anglo American has private shareholders (85%), and the opinion of Botswana (this state indirectly owns 15% of its shares) does not have significant weight in decision-making. There is a confrontation between private and government shareholders - neither more nor less.
In bad times, ALROSA's management is able to take stronger and more decisive actions to protect the diamond market than De Beers. We saw this during the financial crisis in 2009-2011 - a period when everything that ALROSA mined went to the state depository. De Beers did not have this opportunity, and the company had to cut production. It's amazing how much De Beers currently causes emotions, how much anger, while ALROSA is perceived as a "friendlier" company.
In the end, ALROSA's selling prices do not exactly match the prices for diamonds produced from it, but ALROSA positions itself in another "emotional niche." While during the meetings of diamond traders in the centers of faceting, especially in India, the possibility of a boycott of diamond purchases is being discussed, ALROSA sends signals to the market that it can initiate the termination of sales in August. She can simply cancel the site. I do not know if this will really happen, but it reflects a more positive approach. This also reflects the choice of policy - which will certainly find a response from De Beers. The bottom line is that ALROSA has more strategic independence and maneuverability than De Beers.
Net "upstream" versus vertical integration
"Midstream" chains of diamond supplies (producers and diamond traders) feel more comfortable working with ALROSA - or, perhaps, it should be said, feels less threat on its part. ALROSA is mainly a mining company that also operates outside Russia (in Angola). It is the largest diamond mining company in the world in terms of the number of diamonds produced in carats. Last year, 28% of the world's 131 million carats were produced by ALROSA, 25% by De Beers, 11% by Rio Tinto, and another 36% by small players in the industry.
ALROSA has no ambition to enter the "downstream" (jewelry segment of the industry). It does not own a certification laboratory, does not promote its own brand of diamonds (like Forevermark), does not work in the secondary market, buying diamonds from retailers, does not have its own retail jewelry network like De Beers Jewellers. Here are just a few of ALROSA's differences from De Beers with its involvement in "new" core businesses. Perhaps it's time for Anglo American to reconsider this activity in the downstream, which has been developing for more than a decade and which represents a drain on its cash and profits. None of these types of activities, as far as is known, does not yet bring profit to the company - while the costs (and investments) they incur are enormous.
In the key mining and marketing activities, the business models of De Beers and ALROSA are quite similar. Both companies use auctions (spot sales) and long-term contracts. For the contract period 2015-2017, ALROSA has 62 contracts with customers. It has little to do with the sale of diamonds (a historical relic) and conducted several trial sales (up to $ 2.6 million - that is, almost nothing) through Sotheby's auctions. To reduce the supply chain, it stimulates the development of long-term sales relationships with jewelry companies - such as Tiffany, Chow Tai Fook and others. And, of course, ALROSA has its own version of the principles of best business practice called "ALROSA ALLIANCE Principles for Responsible Business". The terms of the long-term contracts of De Beers and ALROSA are not identical. As we understand, ALROSA's contracts are more stringent than that of De Beers. Failure, in fact, means that you are exiting the contract. Therefore, the question arises as to who will become the sacrificial lamb and will first give up ALROSA's offer and lose its site. But until such a time, it may still be far, since ALROSA may simply not offer the goods.
Oligopolistic production structure, where one sets the price
The former cartel structure was replaced at the turn of the century by more oligopolistic, but there is no doubt that many - if not all - of the current ills of the industry can be attributed to the mechanism of supply of raw materials, where one sets prices and others follow it. In a sense, some producers publicly express "neglect" (for lack of a better word) for sightholders who continue to buy diamonds, knowing that they are doing it to themselves at a loss.
If there was a competitive market where the market price of diamonds was important for the commodity market, the prices for rough diamonds might be 20-30% lower today. "Midstream" could feel much healthier than today. For example, company balances could show profits, bankers would be very enthusiastic about the industry, and midstream could invest more in marketing and advertising. It would not be a utopia, but, of course, this would have nothing to do with the present almost catastrophic situation. The tragedy is that whenever the market allows De Beers to raise prices, it does so very quickly, but when the market demands their reduction, the company lingers or refuses to do so. (There are historical reasons for this:
I know all the counterarguments. Diamonds are a product of the luxury goods industry. High prices for rough diamonds are needed to push up prices for diamonds, etc. Midstream is too fragmented, and it's long overdue that it needs to be sorted out (the so-called "consolidation"). There is not enough own money in business ... Yes, all the arguments were expressed and can be heard.
But if we wanted to see another evidence of the oligopolistic mastery of De Beers, it could be done on the July website. The market situation did not stop De Beers from even further increasing the prices of some boxes, only slightly changing to others. Many goods were postponed. However, there were no signs of a wide reduction in selling prices. Sightholders DTC finally took a position - they were led by their wallets.
"Customers rebel against high commodity prices"
This subtitle is at the head of the message of Deza Kilali to the shareholders of Anglo American. "Will this like" him? Will they say: "Melly did it right!". In truth, I do not know. If we follow conventional wisdom, then shareholders should applaud every additional dollar De Beers can squeeze out of its customers. But this is absolutely short-term and short-sighted approach, which plays into the hands of the activity of management guided by bonuses. It does not contribute to the long-term development of the diamond market and De Beers itself.
De Beers discusses branding, consumer confidence, the loyalty of its De Beers Jewelers and the Forevermark brand. At the same time, the company has succeeded - yes, it has finally managed to - in fact, destroy the loyalty of customers to the De Beers brand as a supplier of rough diamonds. We are talking about loyalty, which was brought up for more than a hundred years. The words of the New York sightholder: "Does not Citifani realize that De Beers is destroying the market?"
Let's look at the numbers. The July DTC website at a cost "could be well below $ 200 million," Kilali said. [If you add De Beers sales at auctions, it could be a bit more than $ 200 million] This compares with the average of July sites for the previous 10 years at $ 625 million! No matter how you look at rough diamonds, this amount is simply too expensive to process in conditions of an already over-saturated market.
As for the diamond market, many diamond players see a deterioration in the second half of 2015, however, and this causes quite a bit of concern, too many believe that 2016 is already "written off." Sensations are inherent in the danger of becoming self-fulfilling prophecies. They, of course, influence the behavior of buyers. Serious replenishment of stocks of rough diamonds will begin only when it is considered that the prices for it have reached their bottom. At the same time only sightholders committed an act and refused to buy. If this will continue, then the banks will refuse to finance the sites. And it will become a real tragedy for the producers of raw materials.
http://www.idexonline.com/Memo?Id=40964
The secret of success is that you create a stable and safe environment for capital
For two years now, Mark Cutifani has become the head of Anglo American, and he promised to dramatically increase investment income, reduce the composition of the asset portfolio and streamline the pipeline of projects he called littered, closing down weak projects and leaving good ones .
But in the last 12 months, especially since February, the price of Anglo shares was lower than in the group of equal companies - BHP Billiton, Rio Tinto and Glencore.
Analysts believe that the company is moving in the right direction, but there are concerns about the impact of South Africa on the company, delays in getting rid of non-core assets and whether the group should even engage in iron ore, even if the Minas-Rio mine, Now is operational.
If the sale of all proposed parts of assets in South Africa, for example, the mines for the extraction of platinum and coal, Anglo American in South Africa may look a little "oversaturated by high-level specialists." Do you consider the question of how to carry out a restructuring, or is it a cyclically recurring process?
We are rebuilding our business and increasing its competitiveness. The difficulty of our real situation is that in South Africa is very high inflation, and in order to compete, we must reduce our overheads and other costs. Yes, as the portfolio of objects is being restructured, there will be a need to change the infrastructure necessary to maintain these enterprises for mining, so an element of "optimization of forces" will be required. Of course, any changes in the structure of the organization will be undertaken with full consultation with all relevant shareholders.
Regarding the sale of assets, I believe that a balanced decision is made on the cost of production, in contrast to the adoption of a discount, because you make "short" sales of assets with low profits during the excess supply of many minerals. Is this a precise description of the difficulty of selling a part of the assets or are you ready for a long-term capital outflow program?
"Short" sale, low profits? I'm not sure that I would agree with you on this issue. These are good assets that create cash; Rather, we can say that they do not fit into our plans for the future, and I think that they will be better used by the other owner. It can not be denied that there are constraints in terms of commodity prices. In this case, it is necessary to balance the speed and ensure the appropriate cost. We did not hesitate in making decisions when managing our costs in order to protect profits, including the assets that we sell, and we continue to actively pursue this. Investors expect us to achieve a reasonable cost for these assets, but at the same time continue the restructuring to ensure that our strategic goals are achieved.
More precisely, it is assumed that the first transaction for the newly established company South32 was the purchase of Anglo's stake from its stake in Samancor, that is, you can assume that you agree that the sale of non-controlling interest in companies with low performance is part of the strategy ?
The sale of our shares in Samancor is unlikely at the moment. We like manganese ore, we like our position, and we think to continue everything as is. It creates a 20% return on working capital (ROCE), so it fits well with our goals for the overall business structure.
Do you think that the possible listing of the assets of the Rustenburg project is an unpopular idea, partly judging by the fact that you will have to ask investors to buy assets that other mining companies would not have bought?
We are still evaluating the best course of action for the Rustenburg and Union projects. We have already done a lot of work on the reconstruction of these mines in order to turn them into a stable independent business, profitable and enabling the creation of cash. They have already shown interest, and, as I said earlier, we are interested in selling only at a good price. We are still evaluating which way to choose, and we will announce this in the middle of the year.
You spoke frankly about the regulatory regime in mining in South Africa. Do you think that the revision of the mountain charter, the repeal of the law on the development of mineral resources and oil and the confusion created by the possible articulation of the policy of involving the black majority in the economy with the mountain charter made mining in South Africa an area not available for investment by foreign Investors?
I think that the word "confusion" is in this case key in the sense that it is the uncertainty surrounding this that creates a barrier to foreign investors. Foreign capital has a great choice in terms of its application, and the secret of success is that you create a stable and safe environment for this capital. South Africa is a major mining jurisdiction in terms of its resources and its legislative system. This is an industry that already makes a significant contribution to assisting the government in achieving its goals as defined by the National Development Plan, and it can give even more. But this is a capital-intensive industry with long-term investments, and we all need to reach a consensus on how to ensure the certainty necessary to attract capital.
http://www.miningmx.com/page/special_reports/mining-yearbook/mining-yearbook-2015/1652947-Mark-Cutifani-We-are-rebuilding-Anglo-American#.VbpFOPntmkq
But in the last 12 months, especially since February, the price of Anglo shares was lower than in the group of equal companies - BHP Billiton, Rio Tinto and Glencore.
Analysts believe that the company is moving in the right direction, but there are concerns about the impact of South Africa on the company, delays in getting rid of non-core assets and whether the group should even engage in iron ore, even if the Minas-Rio mine, Now is operational.
If the sale of all proposed parts of assets in South Africa, for example, the mines for the extraction of platinum and coal, Anglo American in South Africa may look a little "oversaturated by high-level specialists." Do you consider the question of how to carry out a restructuring, or is it a cyclically recurring process?
We are rebuilding our business and increasing its competitiveness. The difficulty of our real situation is that in South Africa is very high inflation, and in order to compete, we must reduce our overheads and other costs. Yes, as the portfolio of objects is being restructured, there will be a need to change the infrastructure necessary to maintain these enterprises for mining, so an element of "optimization of forces" will be required. Of course, any changes in the structure of the organization will be undertaken with full consultation with all relevant shareholders.
Regarding the sale of assets, I believe that a balanced decision is made on the cost of production, in contrast to the adoption of a discount, because you make "short" sales of assets with low profits during the excess supply of many minerals. Is this a precise description of the difficulty of selling a part of the assets or are you ready for a long-term capital outflow program?
"Short" sale, low profits? I'm not sure that I would agree with you on this issue. These are good assets that create cash; Rather, we can say that they do not fit into our plans for the future, and I think that they will be better used by the other owner. It can not be denied that there are constraints in terms of commodity prices. In this case, it is necessary to balance the speed and ensure the appropriate cost. We did not hesitate in making decisions when managing our costs in order to protect profits, including the assets that we sell, and we continue to actively pursue this. Investors expect us to achieve a reasonable cost for these assets, but at the same time continue the restructuring to ensure that our strategic goals are achieved.
More precisely, it is assumed that the first transaction for the newly established company South32 was the purchase of Anglo's stake from its stake in Samancor, that is, you can assume that you agree that the sale of non-controlling interest in companies with low performance is part of the strategy ?
The sale of our shares in Samancor is unlikely at the moment. We like manganese ore, we like our position, and we think to continue everything as is. It creates a 20% return on working capital (ROCE), so it fits well with our goals for the overall business structure.
Do you think that the possible listing of the assets of the Rustenburg project is an unpopular idea, partly judging by the fact that you will have to ask investors to buy assets that other mining companies would not have bought?
We are still evaluating the best course of action for the Rustenburg and Union projects. We have already done a lot of work on the reconstruction of these mines in order to turn them into a stable independent business, profitable and enabling the creation of cash. They have already shown interest, and, as I said earlier, we are interested in selling only at a good price. We are still evaluating which way to choose, and we will announce this in the middle of the year.
You spoke frankly about the regulatory regime in mining in South Africa. Do you think that the revision of the mountain charter, the repeal of the law on the development of mineral resources and oil and the confusion created by the possible articulation of the policy of involving the black majority in the economy with the mountain charter made mining in South Africa an area not available for investment by foreign Investors?
I think that the word "confusion" is in this case key in the sense that it is the uncertainty surrounding this that creates a barrier to foreign investors. Foreign capital has a great choice in terms of its application, and the secret of success is that you create a stable and safe environment for this capital. South Africa is a major mining jurisdiction in terms of its resources and its legislative system. This is an industry that already makes a significant contribution to assisting the government in achieving its goals as defined by the National Development Plan, and it can give even more. But this is a capital-intensive industry with long-term investments, and we all need to reach a consensus on how to ensure the certainty necessary to attract capital.
http://www.miningmx.com/page/special_reports/mining-yearbook/mining-yearbook-2015/1652947-Mark-Cutifani-We-are-rebuilding-Anglo-American#.VbpFOPntmkq
Along with the more standard comfort elements of the luxury class
Hotels, department stores and luxury restaurants always go beyond splendor to impress their customers. And what can give the hotel or restaurant a more chic look than a drink or a room from several rooms with a real diamond? Even if a martini for $ 10,000 with a diamond at the bottom of the glass does not go very well, it definitely adds weight and splendor to the cocktail menu.
What is the marketing advantage of these extravagant special offers? "People of extreme prosperity want to have something that can be told about, or a case that can be shared in social networks," says Allen Adamson, a branding expert and chairman of Landor Associates. "The world of luxury branding quickly becomes the world" and you can surpass it "? If businessmen on trips to a hotel can feel comfortable simply from a good meal or a good rest at night, those who travel or dine at a restaurant for a pastime often feel like prolonging this moment through Facebook, Instagram or Snapchat. The stories of the stories about the events of the last decade have become as important a part as the event itself.
"Buying a diamond is, first of all, an expensive purchase," notes Adamson. "Therefore, getting a diamond as part of a hotel stay or part of the dinner is a reason for fasting in social networks and a unique story at cocktail parties." Not to mention all references to a hotel or bar in the media when they report such absurd kinds of service. For example, Blue Bar (Blue Bar) of Algonquin Hotel began offering alcoholic drink Martini on the Rock ("martini with diamond") ten years ago. Few people have taken at least one sip, but, says Nicola Skimammarella (Nicholas Sciammarella), it's a gift, "which continues to allow something to get."
A month ago we sold one and gave exclusive material to Daily News, "Skimarella said in an interview on the phone. A gentleman from Texas allowed this newspaper to reflect this event of his life in the secular column of the newspaper. In connection with this binge, the hotel was also mentioned on national television and in foreign newspapers. Always something gets into the media, - explains Skimarella. "If you are looking for" super-expensive products, drinks or food, "we always appear."
In a sense, every time a buyer gets an impression backed up by a diamond, it's almost like buying a free advertisement for a hotel. So, what service or impressions related to diamonds are offered in the world now?
Jewel Suite Room - New York Palace Hotel
The New York Palace Hotel collaborated with Martin Katz, jewelery designer, to create the Jewel Suite (jeweled room), a 5,000-square-foot, two-story penthouse, one night that costs $ 25,000 and accommodates up to six guests. Along with the more standard comfort elements of the luxury class (a separate roof terrace, free champagne, breathtaking views of Manhattan), Jewel Suite offers a free $ 2,500 Diamond Ring Microband Ring, which the guest can order at face-to-face meeting with Katz himself.
What kind of customers attracts such a room in the hotel with an "insert in the form of a precious product"? Celebrities stop in the Jewel Suite of Martin Katz both on private trips and when they are in New York to promote professional projects, "said John Tolbert in an e-mail. "Both the New York Palace Hotel and Martin Katz serve clients of the same level." Tolbert says that the hotel also leases the Jewel Suite number to publications such as Vogue and celebrities such as Oprah Winfrey for photo sessions and interviews.
Martini "Diamond is forever" - Hotel Ritz Carlton, Japan
The Ritz Carlton Tokyo is the tallest building in the Japanese capital, so it makes sense that the cocktail bar in the lobby and bar of the hotel serves the most expensive Martini in Japan. "The Martini" Diamond is Forever Martini "is sold for ¥ 1.8 million (over $ 14,000), and this includes a one-carat diamond valued at about $ 8,000. The additional $ 6,000 is the cost for that , That the diamond is presented by the waiter at a cocktail party on the background of a beautiful view. The hotel has sold so far only two such martinis - one when they made an offer, and the second - as a gift for the anniversary. But the barmen keep a diamond near at hand, being ready for the third buyer.
Caring for the body with diamond dust - Trump Soho
The Condominium Trump SoHo hotel may seem like just another real estate property for Trump empire worth $ 450 million, but it offers some amenities that you will not get anywhere else. One of the hotel's spa salons offers a body care procedure with diamond dust, including massage with rare cosmetic oils containing diamond dust. Even though the cosmetic value of diamond dust is questioned, the director of the spa Rachel Knapp (Rachel Knapp) claims that this chic procedure attracts many of the wealthy guests Trump Soho. The list of spa procedures indicates that this procedure results in "chakra balance by applying a shiny cream in combination with diamond dust using magnetic devices to remove toxins from the body." With room rates ranging from $ 375 to $ 2,070, it may not be surprising,
Once a favorite place for drinking the most prominent representatives of the literary world of New York, the bar in the historic Algonquin Hotel still satisfies the nostalgia of the highest class and tourists. For those who want to miss a drink for the night, the Blue Bar of the hotel offers a drink with a diamond called Martini on the Rock ("martini with the diamond"). This cocktail, you need to order for 72 hours and meet the jeweler of the hotel (Solitaire Creations from a nearby Manhattan area), and the price can be anywhere from $ 10,000 to $ 15,000 depending on the size and cut of the diamond that the customer needs. Martini on the Rock is the best-selling drink on the menu.
http://www.bloomberg.com/news/articles/2015-07-14/do-you-want-diamonds-with-that-why-restaurants-and-hotels-like-to-serve-up-bling
What is the marketing advantage of these extravagant special offers? "People of extreme prosperity want to have something that can be told about, or a case that can be shared in social networks," says Allen Adamson, a branding expert and chairman of Landor Associates. "The world of luxury branding quickly becomes the world" and you can surpass it "? If businessmen on trips to a hotel can feel comfortable simply from a good meal or a good rest at night, those who travel or dine at a restaurant for a pastime often feel like prolonging this moment through Facebook, Instagram or Snapchat. The stories of the stories about the events of the last decade have become as important a part as the event itself.
"Buying a diamond is, first of all, an expensive purchase," notes Adamson. "Therefore, getting a diamond as part of a hotel stay or part of the dinner is a reason for fasting in social networks and a unique story at cocktail parties." Not to mention all references to a hotel or bar in the media when they report such absurd kinds of service. For example, Blue Bar (Blue Bar) of Algonquin Hotel began offering alcoholic drink Martini on the Rock ("martini with diamond") ten years ago. Few people have taken at least one sip, but, says Nicola Skimammarella (Nicholas Sciammarella), it's a gift, "which continues to allow something to get."
A month ago we sold one and gave exclusive material to Daily News, "Skimarella said in an interview on the phone. A gentleman from Texas allowed this newspaper to reflect this event of his life in the secular column of the newspaper. In connection with this binge, the hotel was also mentioned on national television and in foreign newspapers. Always something gets into the media, - explains Skimarella. "If you are looking for" super-expensive products, drinks or food, "we always appear."
In a sense, every time a buyer gets an impression backed up by a diamond, it's almost like buying a free advertisement for a hotel. So, what service or impressions related to diamonds are offered in the world now?
Jewel Suite Room - New York Palace Hotel
The New York Palace Hotel collaborated with Martin Katz, jewelery designer, to create the Jewel Suite (jeweled room), a 5,000-square-foot, two-story penthouse, one night that costs $ 25,000 and accommodates up to six guests. Along with the more standard comfort elements of the luxury class (a separate roof terrace, free champagne, breathtaking views of Manhattan), Jewel Suite offers a free $ 2,500 Diamond Ring Microband Ring, which the guest can order at face-to-face meeting with Katz himself.
What kind of customers attracts such a room in the hotel with an "insert in the form of a precious product"? Celebrities stop in the Jewel Suite of Martin Katz both on private trips and when they are in New York to promote professional projects, "said John Tolbert in an e-mail. "Both the New York Palace Hotel and Martin Katz serve clients of the same level." Tolbert says that the hotel also leases the Jewel Suite number to publications such as Vogue and celebrities such as Oprah Winfrey for photo sessions and interviews.
Martini "Diamond is forever" - Hotel Ritz Carlton, Japan
The Ritz Carlton Tokyo is the tallest building in the Japanese capital, so it makes sense that the cocktail bar in the lobby and bar of the hotel serves the most expensive Martini in Japan. "The Martini" Diamond is Forever Martini "is sold for ¥ 1.8 million (over $ 14,000), and this includes a one-carat diamond valued at about $ 8,000. The additional $ 6,000 is the cost for that , That the diamond is presented by the waiter at a cocktail party on the background of a beautiful view. The hotel has sold so far only two such martinis - one when they made an offer, and the second - as a gift for the anniversary. But the barmen keep a diamond near at hand, being ready for the third buyer.
Caring for the body with diamond dust - Trump Soho
The Condominium Trump SoHo hotel may seem like just another real estate property for Trump empire worth $ 450 million, but it offers some amenities that you will not get anywhere else. One of the hotel's spa salons offers a body care procedure with diamond dust, including massage with rare cosmetic oils containing diamond dust. Even though the cosmetic value of diamond dust is questioned, the director of the spa Rachel Knapp (Rachel Knapp) claims that this chic procedure attracts many of the wealthy guests Trump Soho. The list of spa procedures indicates that this procedure results in "chakra balance by applying a shiny cream in combination with diamond dust using magnetic devices to remove toxins from the body." With room rates ranging from $ 375 to $ 2,070, it may not be surprising,
Once a favorite place for drinking the most prominent representatives of the literary world of New York, the bar in the historic Algonquin Hotel still satisfies the nostalgia of the highest class and tourists. For those who want to miss a drink for the night, the Blue Bar of the hotel offers a drink with a diamond called Martini on the Rock ("martini with the diamond"). This cocktail, you need to order for 72 hours and meet the jeweler of the hotel (Solitaire Creations from a nearby Manhattan area), and the price can be anywhere from $ 10,000 to $ 15,000 depending on the size and cut of the diamond that the customer needs. Martini on the Rock is the best-selling drink on the menu.
http://www.bloomberg.com/news/articles/2015-07-14/do-you-want-diamonds-with-that-why-restaurants-and-hotels-like-to-serve-up-bling
Profitable advertising deals that further repel future potential buyers
If our magazine existed from the middle of the 20th century, then probably we would proudly place photos of many idols among Arab film stars and musicians during this time. The Egyptian actress Madiha Yousri, the Lebanese star Amal al-Atrash (better known as Asmahan) and, of course, the Sheriff of Cairo in the 1980s, Sherihan, all of them Were known for their great sense of their own style and their influence on mass culture and fashion in the Middle East.
Such women would be good for such a luxury magazine as ours, but, alas, Harper's Bazaar Arabia has existed for only about eight years, and it's not easy to find such stars. Arab edition of Harper's Bazaar is unique among the most fashionable editions of the "luxury" class, because we rarely place local or regional stars on our covers.
A similar situation exists among the brands of haute couture and jewelry. Although many have successfully attracted Chinese, Indian and Latin American screen and fashion stars as their "ambassadors," representatives of luxury brands from the Middle East continue to be a bit of a mystery.
Such brands as Dior translate its name into Arabic for showcases in the Dubai shopping complex and for billboards along the road of Sheikh Zayed (Zayed). But when it comes to women's faces to be placed in their campaigns, worth many millions of dhrams, they are most likely to be European or American, not of Arab origin.
This creates a problem for luxury brands, which increasingly need to adapt their marketing campaigns to local characteristics, introducing a familiar face, yet a desirable ideal for extremely important customers in the Middle East.
Overcoming cultural taboos
There are many reasons why relatively few Arab celebrities have cooperated with luxury brands in the region, and they are different. Dean Aljuhani Abdulaziz of Saudi Arabia, owner of the luxury boutique D'NA in Riyadh and Doha, and herself a model to follow as an icon of Arab style, explains: "In the countries of the Persian Gulf, people are extremely conservative. This is a culture that does not approve of people who are portrayed. " She compares the attitude to a career in the entertainment industry with the "British 1920s. If you are from a certain family, then they are treated with great disapproval. "
In the Gulf Cooperation Council (GCC) region, most young girls from affluent families are not allowed to seriously consider wanting to become an actress or singer. But it is the share of the GCC countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates - account for the greater part of the purchasing power of the Middle East for luxury goods.
"In the countries of the Gulf Cooperation Council you will never see a child preparing for this kind of activity. This is something that is not allowed. Even boys should not do this, "explains Diana Hamade, a lawyer from the Emirates, who has the right to speak in all the courts of the United Arab Emirates. Widespread condemnation of the idealization of the famous actor, singer or entertainer. "Parents do not want their children to look at celebrities and love them. This is considered sinful and forbidden and is not allowed, "she added.
New role models
This creates a challenge for the luxury fashion industry, which relies on brand representatives from among celebrities - most often movie stars, music and fashion - to communicate with consumers and help with the sale of goods. In such markets as the Middle East, having their own aesthetic perception and cultural styles, the global marketing message of the brand can often prove to be inappropriate and inappropriate. As Hamade says: "The fashion world is disconnected. I do not think that designers think about an Arab woman when they create something. "
As editor of the magazine, I have long felt that the lack of worthy and bright icons of the Arab style is detrimental to the industry. Abdulaziz agrees that demanding clients in the Gulf countries would appreciate a larger Arab representation in the marketing of luxury goods. "Of course, no doubt," she says, "because it will show that these firms and conglomerates think of these people as equals, and not as people they look down on. I myself would be interested to see more people from the Middle East representing Dior or Chanel, or even Cartier. "
And although I would really like to see Arab actresses on the red carpet at the Oscar award dressed in high fashion clothes from Chanel - as well as Western women in Arab designers' clothes, that increasingly becomes the norm - or the Arabian face on Dior billboards, all The barriers to Arab women entering the entertainment field remain high, at least in the Gulf countries, where the intention to be on the front cover in an advertising campaign is still taboo and causes a negative attitude towards advertising with participation "Stars" or famous people or events to promote products to the market.
Incompatible strategies and taste
It can not be said that none of the Arabian superstars appears on the red carpet or on billboards. Of course, they do. But their aesthetic views and attractiveness rarely corresponds to the aesthetic views and attractiveness of luxury fashion houses. The entertainment industry in the Middle East and North Africa region, where Egypt is the local response to Hollywood, tends to shift towards low-level celebrities targeted at the mass consumer, or stars from the niche of arthouse production, who often have taste levels suitable for the luxury industry, but There is no significant recognition that such a partnership has become meaningful from a commercial point of view.
Lebanese superstars, for example, Nancy Ajram, Elissa and Haifa Wehbe, have an undeniable appeal, and they have been viewed by 8.1 million people in Instagram. But bright make-up, excessively shiny evening outfits and too lush hairpieces along with cosmetic surgery, which determines the aesthetic views in this group, are unacceptable to the natural elegance that Western luxury brands like. Stars here often require complete control over the wardrobe, hairstyles and makeup, as well as the direction of creativity, which is why it is almost impossible for luxury fashion magazines to negotiate for cutting-edge articles.
Key luxury brands such as Dior, Chanel and Louis Vuitton have no desire to provide temporary models, and it is probably not surprising that the only Arab superstar that appeared on the cover of Harper's Bazaar Arabia is the Lebanese singer Nancy Ajram. Dressed in outfits such as Alessandra Rich, Gucci and Dolce & Gabbana, I think Ajram most met the requirements of sophistication that our readers expected, and matched the Harper's Bazaar brand.
Entertainment industry without embellishment
The matter is complicated by the fact that the search for talent management in Lebanon, the center of the entertainment industry in the Middle East, is like conquering the Wild West, with its agents and impresarios, freely working from accounts on Gmail and making transactions as they please. Lebanese actress Razane Jammal, whose film "Une Histoire De Fou" (Crazy Story), 2015 participated in the film festival in Cannes this summer, works only with the leadership in London, Los Angeles and Paris. Describing the industry in his country as more "carefree", Jammal recalls that she was offered a role in the Middle East without official casting or even a script. "This reflects the level of what they produce," she said.
This lack of strategic management means that talent often prefers to match popular mass-market brands, as for beauty, electronics, cars or drinks, offering profitable advertising deals that further repel future potential buyers.
Manufacturers of luxury goods are constantly looking for Arab women with whom they can cooperate. Every season, I have the same meetings with the same public relations employees of luxury goods manufacturers in an attempt to identify suitable personalities for partnership. In the field of entertainment, Louis Vuitton worked with the Lebanese actress and director Nadine Labaki (Nadine Labaki), and Chanel collaborates with the aforementioned Jammal. Burberry invites Lebanese TV presenter Raya Abirached, whose programs - Scoop With Raya ("Exclusive" for Raya) and Arabs Got Talent (Search for talents among Arabs) - provided her over 370,000 catwalk catwalk shows in Instagram. In addition, TV presenter Diala Makki (Diala Makki) in combination is the representative of the company Pantene
http://www.businessoffashion.com/articles/opinion/op-ed-wanted-arab-brand-ambassadors
Such women would be good for such a luxury magazine as ours, but, alas, Harper's Bazaar Arabia has existed for only about eight years, and it's not easy to find such stars. Arab edition of Harper's Bazaar is unique among the most fashionable editions of the "luxury" class, because we rarely place local or regional stars on our covers.
A similar situation exists among the brands of haute couture and jewelry. Although many have successfully attracted Chinese, Indian and Latin American screen and fashion stars as their "ambassadors," representatives of luxury brands from the Middle East continue to be a bit of a mystery.
Such brands as Dior translate its name into Arabic for showcases in the Dubai shopping complex and for billboards along the road of Sheikh Zayed (Zayed). But when it comes to women's faces to be placed in their campaigns, worth many millions of dhrams, they are most likely to be European or American, not of Arab origin.
This creates a problem for luxury brands, which increasingly need to adapt their marketing campaigns to local characteristics, introducing a familiar face, yet a desirable ideal for extremely important customers in the Middle East.
Overcoming cultural taboos
There are many reasons why relatively few Arab celebrities have cooperated with luxury brands in the region, and they are different. Dean Aljuhani Abdulaziz of Saudi Arabia, owner of the luxury boutique D'NA in Riyadh and Doha, and herself a model to follow as an icon of Arab style, explains: "In the countries of the Persian Gulf, people are extremely conservative. This is a culture that does not approve of people who are portrayed. " She compares the attitude to a career in the entertainment industry with the "British 1920s. If you are from a certain family, then they are treated with great disapproval. "
In the Gulf Cooperation Council (GCC) region, most young girls from affluent families are not allowed to seriously consider wanting to become an actress or singer. But it is the share of the GCC countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates - account for the greater part of the purchasing power of the Middle East for luxury goods.
"In the countries of the Gulf Cooperation Council you will never see a child preparing for this kind of activity. This is something that is not allowed. Even boys should not do this, "explains Diana Hamade, a lawyer from the Emirates, who has the right to speak in all the courts of the United Arab Emirates. Widespread condemnation of the idealization of the famous actor, singer or entertainer. "Parents do not want their children to look at celebrities and love them. This is considered sinful and forbidden and is not allowed, "she added.
New role models
This creates a challenge for the luxury fashion industry, which relies on brand representatives from among celebrities - most often movie stars, music and fashion - to communicate with consumers and help with the sale of goods. In such markets as the Middle East, having their own aesthetic perception and cultural styles, the global marketing message of the brand can often prove to be inappropriate and inappropriate. As Hamade says: "The fashion world is disconnected. I do not think that designers think about an Arab woman when they create something. "
As editor of the magazine, I have long felt that the lack of worthy and bright icons of the Arab style is detrimental to the industry. Abdulaziz agrees that demanding clients in the Gulf countries would appreciate a larger Arab representation in the marketing of luxury goods. "Of course, no doubt," she says, "because it will show that these firms and conglomerates think of these people as equals, and not as people they look down on. I myself would be interested to see more people from the Middle East representing Dior or Chanel, or even Cartier. "
And although I would really like to see Arab actresses on the red carpet at the Oscar award dressed in high fashion clothes from Chanel - as well as Western women in Arab designers' clothes, that increasingly becomes the norm - or the Arabian face on Dior billboards, all The barriers to Arab women entering the entertainment field remain high, at least in the Gulf countries, where the intention to be on the front cover in an advertising campaign is still taboo and causes a negative attitude towards advertising with participation "Stars" or famous people or events to promote products to the market.
Incompatible strategies and taste
It can not be said that none of the Arabian superstars appears on the red carpet or on billboards. Of course, they do. But their aesthetic views and attractiveness rarely corresponds to the aesthetic views and attractiveness of luxury fashion houses. The entertainment industry in the Middle East and North Africa region, where Egypt is the local response to Hollywood, tends to shift towards low-level celebrities targeted at the mass consumer, or stars from the niche of arthouse production, who often have taste levels suitable for the luxury industry, but There is no significant recognition that such a partnership has become meaningful from a commercial point of view.
Lebanese superstars, for example, Nancy Ajram, Elissa and Haifa Wehbe, have an undeniable appeal, and they have been viewed by 8.1 million people in Instagram. But bright make-up, excessively shiny evening outfits and too lush hairpieces along with cosmetic surgery, which determines the aesthetic views in this group, are unacceptable to the natural elegance that Western luxury brands like. Stars here often require complete control over the wardrobe, hairstyles and makeup, as well as the direction of creativity, which is why it is almost impossible for luxury fashion magazines to negotiate for cutting-edge articles.
Key luxury brands such as Dior, Chanel and Louis Vuitton have no desire to provide temporary models, and it is probably not surprising that the only Arab superstar that appeared on the cover of Harper's Bazaar Arabia is the Lebanese singer Nancy Ajram. Dressed in outfits such as Alessandra Rich, Gucci and Dolce & Gabbana, I think Ajram most met the requirements of sophistication that our readers expected, and matched the Harper's Bazaar brand.
Entertainment industry without embellishment
The matter is complicated by the fact that the search for talent management in Lebanon, the center of the entertainment industry in the Middle East, is like conquering the Wild West, with its agents and impresarios, freely working from accounts on Gmail and making transactions as they please. Lebanese actress Razane Jammal, whose film "Une Histoire De Fou" (Crazy Story), 2015 participated in the film festival in Cannes this summer, works only with the leadership in London, Los Angeles and Paris. Describing the industry in his country as more "carefree", Jammal recalls that she was offered a role in the Middle East without official casting or even a script. "This reflects the level of what they produce," she said.
This lack of strategic management means that talent often prefers to match popular mass-market brands, as for beauty, electronics, cars or drinks, offering profitable advertising deals that further repel future potential buyers.
Manufacturers of luxury goods are constantly looking for Arab women with whom they can cooperate. Every season, I have the same meetings with the same public relations employees of luxury goods manufacturers in an attempt to identify suitable personalities for partnership. In the field of entertainment, Louis Vuitton worked with the Lebanese actress and director Nadine Labaki (Nadine Labaki), and Chanel collaborates with the aforementioned Jammal. Burberry invites Lebanese TV presenter Raya Abirached, whose programs - Scoop With Raya ("Exclusive" for Raya) and Arabs Got Talent (Search for talents among Arabs) - provided her over 370,000 catwalk catwalk shows in Instagram. In addition, TV presenter Diala Makki (Diala Makki) in combination is the representative of the company Pantene
http://www.businessoffashion.com/articles/opinion/op-ed-wanted-arab-brand-ambassadors
Dubai as a diamond center seems to have grown mainly due to the diamond trade in Antwerp
Despite its relatively short history, Dubai is a promising diamond center, which is rapidly becoming an important trading center. Dubai, which offers a modern exchange and has a convenient location, is now an important center for diamond trading.
Dubai, one of the seven emirates of the United Arab Emirates (UAE), is a country rich in gas, and it is an important port in the Persian Gulf. The leadership of the emirate understands that its natural resources in its time will be depleted, and decided to act in advance, developing other economic sectors.
Bright shine among the sands
Earlier long before the discovery of gas in the region, Dubai was an important regional trade center. On this basis, in 2002, a free trade area was created, and Dubai organized a tea trade exchange there. To this area, the Dubai Multi Commodities Center (DMCC), in 2004, a gold exchange and a gold trading center were added, as well as a gemstone trading center and the Dubai Diamond Exchange (DDE). To this end, in 2003 the UAE also became a participant in the Kimberley Process Certification Scheme.
By offering a tax amnesty for 50 years, DDE has become an attractive option for diamond-diamond firms, especially for diamond manufacturers looking for ways to increase their small net income. Companies headquartered in India, Belgium and other countries opened offices on the Dubai Diamond Exchange and started trading.
The main part for organizing this trade was the construction of the tower of Almas. The diamond was organized according to the model of the Israeli Diamond Exchange and the Bharat Diamond Bourse, which was still under construction at that time. It provides a safe and closed complex, which includes under one roof all the necessary for traders with diamonds. It has a floor trading on DDE, a premise for diamond auctions, for services related to diamonds, a shipping service, storage facilities, banks, as well as restaurants and shops for customer service.
Great geographical advantages
The geographic location of Dubai enhances its attractiveness as a center for trade in diamonds. For the first time, a large diamond center appeared in the heart of an important diamond market, the Arab region of the Persian Gulf. In fact, it serves consumers in Saudi Arabia, Bahrain and other UAE countries, which in 2014 bought diamond jewelry worth $ 4 billion, which is 2% higher compared to the previous year.
Dubai is also conveniently located at the crossroads between Africa, the leading diamond supplier, and India, the leading diamond cutter and polisher. This position at the crossroads was another attractive feature for Indian companies that quickly became members of DDE.
The most pleasant thing to top it all off
Finally, in response to the recent decline in the availability of funding in the diamond veteran centers, local banks began to offer higher levels of funding to diamond-diamond companies in Dubai. These banks include Emirates NBD, Mashreqbank and National Bank of Fujairah (National Bank of Fujairah). This additional financing was the most pleasant, especially after the Antwerp Diamond Bank announced its closure, and ABN Amro announced a toughening of the requirements for providing financing.
The combination of safe and modern retail spaces, a very convenient geographical location and greater access to finance have made Dubai an important trading center, especially for diamonds.
Dubai - rising star
Showing the rapid development of Dubai as a diamond trading center, one should take into account the growth of the total volume of trade for a period of less than 10 years. In 2011, a year before the formation of the trade zone, Dubai's total trade volume was only $ 5 million. From the point of view of the diamond and diamond industry, this is not business.
By 2010, diamonds and diamonds traded through the Dubai Diamond Exchange reached 286.7 million carats worth $ 35.1 billion, according to the DDE. It was a record year, the volume of trade increased by 50% compared to 2009, and the value of traded diamonds doubled.
In November 2011, DDE reported a new record in the diamond trade - 206.1 million carats for the first half of 2011, which is 35% higher than the 131 million carats sold in the first half of 2010. The volume of trade for this period was $ 25.3 billion, which is 55% higher than the trade volume of $ 16.3 billion in the first half of 2010.
The role of Dubai as a diamond center seems to have grown mainly due to the diamond trade in Antwerp. The Belgian center at that time was suffering from high taxation and a regime that made tax expenses unclear until the end of the year. In addition, there was a series of raids by the Belgian police and tax authorities on many Antwerp diamond companies. This caused fear and created an unpleasant environment for doing business. Compared with the economic climate in Dubai, Antwerp seemed less favorable, which led to the transfer of trade from the traditional center to the new one.
Dubai Diamonds Today
This move seems to have slowed in recent years. In 2013 and 2014, the size of the Dubai industry remained at around $ 35 billion. Of this total trade, in 2014, Dubai exported $ 8.3 billion worth of diamonds.
Dubai's growth has attracted not only diamond trade, diamond production and banks. In 2011, De Beers Auction Sales opened an office in Dubai to serve its ordinary customers: Indian small and medium-sized businesses. For such firms it is too expensive to make regular trips for diamonds from Mumbai to Antwerp or Tel Aviv.
http://www.ehudlaniado.com/home/index.php/news/entry/diamond-centers-dubai
Dubai, one of the seven emirates of the United Arab Emirates (UAE), is a country rich in gas, and it is an important port in the Persian Gulf. The leadership of the emirate understands that its natural resources in its time will be depleted, and decided to act in advance, developing other economic sectors.
Bright shine among the sands
Earlier long before the discovery of gas in the region, Dubai was an important regional trade center. On this basis, in 2002, a free trade area was created, and Dubai organized a tea trade exchange there. To this area, the Dubai Multi Commodities Center (DMCC), in 2004, a gold exchange and a gold trading center were added, as well as a gemstone trading center and the Dubai Diamond Exchange (DDE). To this end, in 2003 the UAE also became a participant in the Kimberley Process Certification Scheme.
By offering a tax amnesty for 50 years, DDE has become an attractive option for diamond-diamond firms, especially for diamond manufacturers looking for ways to increase their small net income. Companies headquartered in India, Belgium and other countries opened offices on the Dubai Diamond Exchange and started trading.
The main part for organizing this trade was the construction of the tower of Almas. The diamond was organized according to the model of the Israeli Diamond Exchange and the Bharat Diamond Bourse, which was still under construction at that time. It provides a safe and closed complex, which includes under one roof all the necessary for traders with diamonds. It has a floor trading on DDE, a premise for diamond auctions, for services related to diamonds, a shipping service, storage facilities, banks, as well as restaurants and shops for customer service.
Great geographical advantages
The geographic location of Dubai enhances its attractiveness as a center for trade in diamonds. For the first time, a large diamond center appeared in the heart of an important diamond market, the Arab region of the Persian Gulf. In fact, it serves consumers in Saudi Arabia, Bahrain and other UAE countries, which in 2014 bought diamond jewelry worth $ 4 billion, which is 2% higher compared to the previous year.
Dubai is also conveniently located at the crossroads between Africa, the leading diamond supplier, and India, the leading diamond cutter and polisher. This position at the crossroads was another attractive feature for Indian companies that quickly became members of DDE.
The most pleasant thing to top it all off
Finally, in response to the recent decline in the availability of funding in the diamond veteran centers, local banks began to offer higher levels of funding to diamond-diamond companies in Dubai. These banks include Emirates NBD, Mashreqbank and National Bank of Fujairah (National Bank of Fujairah). This additional financing was the most pleasant, especially after the Antwerp Diamond Bank announced its closure, and ABN Amro announced a toughening of the requirements for providing financing.
The combination of safe and modern retail spaces, a very convenient geographical location and greater access to finance have made Dubai an important trading center, especially for diamonds.
Dubai - rising star
Showing the rapid development of Dubai as a diamond trading center, one should take into account the growth of the total volume of trade for a period of less than 10 years. In 2011, a year before the formation of the trade zone, Dubai's total trade volume was only $ 5 million. From the point of view of the diamond and diamond industry, this is not business.
By 2010, diamonds and diamonds traded through the Dubai Diamond Exchange reached 286.7 million carats worth $ 35.1 billion, according to the DDE. It was a record year, the volume of trade increased by 50% compared to 2009, and the value of traded diamonds doubled.
In November 2011, DDE reported a new record in the diamond trade - 206.1 million carats for the first half of 2011, which is 35% higher than the 131 million carats sold in the first half of 2010. The volume of trade for this period was $ 25.3 billion, which is 55% higher than the trade volume of $ 16.3 billion in the first half of 2010.
The role of Dubai as a diamond center seems to have grown mainly due to the diamond trade in Antwerp. The Belgian center at that time was suffering from high taxation and a regime that made tax expenses unclear until the end of the year. In addition, there was a series of raids by the Belgian police and tax authorities on many Antwerp diamond companies. This caused fear and created an unpleasant environment for doing business. Compared with the economic climate in Dubai, Antwerp seemed less favorable, which led to the transfer of trade from the traditional center to the new one.
Dubai Diamonds Today
This move seems to have slowed in recent years. In 2013 and 2014, the size of the Dubai industry remained at around $ 35 billion. Of this total trade, in 2014, Dubai exported $ 8.3 billion worth of diamonds.
Dubai's growth has attracted not only diamond trade, diamond production and banks. In 2011, De Beers Auction Sales opened an office in Dubai to serve its ordinary customers: Indian small and medium-sized businesses. For such firms it is too expensive to make regular trips for diamonds from Mumbai to Antwerp or Tel Aviv.
http://www.ehudlaniado.com/home/index.php/news/entry/diamond-centers-dubai
Growth in terms of value may reflect a higher proportion of more expensive diamonds
Return after the summer break was far from calm. Although the focus was on the sites, there are other issues, for example, long-term trends, which are becoming more noticeable as we plunge deeper into the current crisis.
After the initial publication of the erroneous data, the Kimberley Process Certification Scheme (Kimberley Process Certification Scheme) published its diamond production figures, imports and exports for 2014. These figures are full of surprises, highlighting some of the changes that the global diamond market is undergoing. They indicate a change in the importance of certain diamond centers, and this affects the entire diamond pipeline.
RUSSIA RISES TO FIRST PLACE
In May 2013, Igor Sobolev, then the first vice president and executive director of ALROSA, told me during a trip to their mine in Mirny that by 2018 ALROSA will be the world's largest diamond mining company. It was a clear goal that the company set for itself. Although until three years before 2018, and the economic situation today is very different from that which was in 2013, there are indications that ALROSA may soon achieve this goal.
[De Beers reports a higher volume of production than the one indicated by the Kimberley Process, the discrepancies are 13.8% in volume and 33% in value. Is it possible for the KP to make a mistake about 14% in the volume of products produced worldwide?]
In addition to the mines in Russia, ALROSA owns a stake in one mine outside the country - the Catoca mine in Angola. Except for this, the company's activities in mining are conducted in Russia, and almost without exception, 94.5% of Russian production belongs to ALROSA.
In 2014, Russia produced 38.3 million carats at an announced price of $ 3.73 billion, becoming the world's largest diamond producer by value and volume, according to KP data. Until 2014, for many years, it was the largest producer in terms of carat volume. The increase in production by 19.9% in value compared to 2013 can be an increase only in accounting books (by volume, growth was only 1.1%) or it may be an accidental improvement in the volumes extracted from the bowels, but how can declare ALROSA, there is no accident or game. Russia / ALROSA as a whole simply continues to move along a predetermined path to achieve the goal.
BOTSWANA HAS BROUGHT TO THE 2 nd PLACE
In retrospect, the growth in ALROSA's production volumes may simply be the difference between a diamond mining company supported by the government and a company owned by a shareholder group motivated to generate profits every quarter. When ALROSA encounters difficulties in selling diamonds, it has the support of Gokhran, the state institution for the formation of the State Fund for Precious Metals and Precious Stones of the Russian Federation.
[In total, in 2014, prices at the level of production rose by 7.6 percent].
Gokhran has an annual budget for the purchase of diamonds from ALROSA. This allows the company to keep mining even in the most difficult times. To secure the proceeds, she sells diamonds to Gokhran, which, in turn, only needs to wait until better times to sell the product to the market. Thus, the Russian government protects ALROSA.
In 2014, Botswana produced 24.7 million carats for the announced value of $ 3.65 billion, which is 6.4% more in volume, but only 0.6% more in value. De Beers produced 98.3% of Botswana's production in 2014, making it an important company for the diamond mining industry in Botswana, like ALROSA for the Russian diamond mining industry.
But in terms of De Beers, in 2014, Botswana's share is 74.3% of its global output, as this company has a wide geography of operations. When customers do not buy so much (as is now the case), De Beers cuts production (as it does now). And this explains why the KP figures for 2015, when released in the third quarter of 2016, may show that Russia has even bypassed Botswana.
GROWTH OF GLOBAL VOLUME OF PRODUCTION FROM THE POINT OF VIEW OF VALUE, LEADING TO INCREASING PRICES
According to the KP, the global production in 2014 amounted to 124.8 million carats worth $ 14.5 billion, which is 4.4% less in volume and 2.9% more than in 2013.
This bodes well for what the diamonds diamond production sector has warned throughout the year - that there will be a deficit of a certain commodity and prices will rise. In general, according to these data, in 2014 prices at the level of mining increased by 7.6%.
Open KP data are broken according to the volume of production, the volume of imports and the volume of exports of diamonds that are tracked when they cross the border. The declared value of diamonds at the mining level (and registered KP) is not necessarily the one that diamond buyers pay to diamond mining companies. Nothing reflects this better than the growth in the average value of diamond imports.
According to the KP, 409 million carats worth $ 56.6 billion were imported by 36 countries, which is 5.7% less in volume and 5.3% higher in value.
[The average cost of imports was $ 138.42 per carat, which is higher by as much as 11.7% year-on-year].
Again, this growth in terms of value may reflect a higher proportion of more expensive diamonds that were accidentally mined this year. This may be unreliable due to a wide variety of sources. In addition, this will also be reflected in the output figures.
It is likely that this double-digit increase in value shows what happened in the trade - diamond mining companies take more for their goods, and first-hand buyers (sightholders and ALROSA counterparties) take greater premiums when selling to the secondary market. These are some of the issues related to the current crisis in the diamond pipeline.
http://edahngolan.com/has-de-beers-unveiled-deep-kp-mistake-russia-dubai-on-the-rise/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=8df1ca40a2-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-8df1ca40a2-319355397
After the initial publication of the erroneous data, the Kimberley Process Certification Scheme (Kimberley Process Certification Scheme) published its diamond production figures, imports and exports for 2014. These figures are full of surprises, highlighting some of the changes that the global diamond market is undergoing. They indicate a change in the importance of certain diamond centers, and this affects the entire diamond pipeline.
RUSSIA RISES TO FIRST PLACE
In May 2013, Igor Sobolev, then the first vice president and executive director of ALROSA, told me during a trip to their mine in Mirny that by 2018 ALROSA will be the world's largest diamond mining company. It was a clear goal that the company set for itself. Although until three years before 2018, and the economic situation today is very different from that which was in 2013, there are indications that ALROSA may soon achieve this goal.
[De Beers reports a higher volume of production than the one indicated by the Kimberley Process, the discrepancies are 13.8% in volume and 33% in value. Is it possible for the KP to make a mistake about 14% in the volume of products produced worldwide?]
In addition to the mines in Russia, ALROSA owns a stake in one mine outside the country - the Catoca mine in Angola. Except for this, the company's activities in mining are conducted in Russia, and almost without exception, 94.5% of Russian production belongs to ALROSA.
In 2014, Russia produced 38.3 million carats at an announced price of $ 3.73 billion, becoming the world's largest diamond producer by value and volume, according to KP data. Until 2014, for many years, it was the largest producer in terms of carat volume. The increase in production by 19.9% in value compared to 2013 can be an increase only in accounting books (by volume, growth was only 1.1%) or it may be an accidental improvement in the volumes extracted from the bowels, but how can declare ALROSA, there is no accident or game. Russia / ALROSA as a whole simply continues to move along a predetermined path to achieve the goal.
BOTSWANA HAS BROUGHT TO THE 2 nd PLACE
In retrospect, the growth in ALROSA's production volumes may simply be the difference between a diamond mining company supported by the government and a company owned by a shareholder group motivated to generate profits every quarter. When ALROSA encounters difficulties in selling diamonds, it has the support of Gokhran, the state institution for the formation of the State Fund for Precious Metals and Precious Stones of the Russian Federation.
[In total, in 2014, prices at the level of production rose by 7.6 percent].
Gokhran has an annual budget for the purchase of diamonds from ALROSA. This allows the company to keep mining even in the most difficult times. To secure the proceeds, she sells diamonds to Gokhran, which, in turn, only needs to wait until better times to sell the product to the market. Thus, the Russian government protects ALROSA.
In 2014, Botswana produced 24.7 million carats for the announced value of $ 3.65 billion, which is 6.4% more in volume, but only 0.6% more in value. De Beers produced 98.3% of Botswana's production in 2014, making it an important company for the diamond mining industry in Botswana, like ALROSA for the Russian diamond mining industry.
But in terms of De Beers, in 2014, Botswana's share is 74.3% of its global output, as this company has a wide geography of operations. When customers do not buy so much (as is now the case), De Beers cuts production (as it does now). And this explains why the KP figures for 2015, when released in the third quarter of 2016, may show that Russia has even bypassed Botswana.
GROWTH OF GLOBAL VOLUME OF PRODUCTION FROM THE POINT OF VIEW OF VALUE, LEADING TO INCREASING PRICES
According to the KP, the global production in 2014 amounted to 124.8 million carats worth $ 14.5 billion, which is 4.4% less in volume and 2.9% more than in 2013.
This bodes well for what the diamonds diamond production sector has warned throughout the year - that there will be a deficit of a certain commodity and prices will rise. In general, according to these data, in 2014 prices at the level of mining increased by 7.6%.
Open KP data are broken according to the volume of production, the volume of imports and the volume of exports of diamonds that are tracked when they cross the border. The declared value of diamonds at the mining level (and registered KP) is not necessarily the one that diamond buyers pay to diamond mining companies. Nothing reflects this better than the growth in the average value of diamond imports.
According to the KP, 409 million carats worth $ 56.6 billion were imported by 36 countries, which is 5.7% less in volume and 5.3% higher in value.
[The average cost of imports was $ 138.42 per carat, which is higher by as much as 11.7% year-on-year].
Again, this growth in terms of value may reflect a higher proportion of more expensive diamonds that were accidentally mined this year. This may be unreliable due to a wide variety of sources. In addition, this will also be reflected in the output figures.
It is likely that this double-digit increase in value shows what happened in the trade - diamond mining companies take more for their goods, and first-hand buyers (sightholders and ALROSA counterparties) take greater premiums when selling to the secondary market. These are some of the issues related to the current crisis in the diamond pipeline.
http://edahngolan.com/has-de-beers-unveiled-deep-kp-mistake-russia-dubai-on-the-rise/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=8df1ca40a2-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-8df1ca40a2-319355397
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