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

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

This is a zero-sum game in which the profit of one party is formed at the expense of the other party

I often think about how consumers - whether they live in New York, Hong Kong, Shanghai or elsewhere - make decisions. Obviously, they determine the price for both diamonds and diamonds (indirectly). It is the consumer who decides whether it is possible to offer him a diamond at some price and whether he needs him at all. Each supply chain is assumed to operate in accordance with this assumption. When a consumer decides that he wants or can pay a sticker price for a particular diamond, he thereby sets the price for this diamond. This, in turn, determines the price of the diamond (from which this diamond was made). The difference between these two prices is the gross profit of the supply chain: diamond mining companies, cutters,

In my previous articles, I argued that, in the light of the current crisis, the diamond and diamond sector will never return to its previous structure. Even if we can solve existing problems in the foreseeable future (for example, the issues of high diamond prices, profit margins, stocks, marketing, etc.), these will be only temporary solutions. From my point of view, these same problems will appear again later. All this allows me to conclude that there is a need for a deep, fundamental change in the industry. Only a significant change will stabilize the trade in diamonds and diamonds and make it profitable. This should be a change that benefits all participants of the industry, and a change that primarily focuses on the consumer.

Complex circumstances

But before I move on to what changes are required, we need to consider the circumstances that led the industry into the current situation.

Fragmentation . "Pie" of the diamond sector is divided between a huge number of companies. The small share that each company receives, if it receives it, reduces the profit of the company, hinders the accumulation of capital, makes it difficult to preserve the value of diamonds and undermines the company's ability to effectively trade this luxury product, as it was in the past (see reference). Many of the players in the diamond sector rely on "cheap labor" and seek to compete with each other in order to sell at any price, including making deals without any return on investment (see reference) or even at a loss to themselves, Just to keep the business and maintain its vitality. In this situation, prudent diamond companies would translate their profits into investments in other sectors.

Oligopolistic regime of suppliers of rough diamonds. This situation leads to contradictory methods of work, which completely lead to defeat in the most important struggle: the struggle for the consumer. Such methods of work include: temporary improvement in the coloring of diamonds, including non-documented synthetic diamonds; The use of uncertainty between the estimated demand and the volume of final transactions; Lack of transparency and misleading consumers using the "4 C" characteristics (color, cut, weight, cleanliness), etc.

These methods of work destroy profitability, damage the reputation of the industry, harm the consumer and force financial institutions that could contribute to the growth of the industry, take their business to other areas. These problems are exacerbated by the constant struggle for market share, which makes buying diamonds at any price.

All of the above can be seen on the chart below, prepared by the consulting firm Mercury Diamonds, and he speaks for himself.

The blue line, reflecting the price of diamonds, is almost always above the red line denoting the price of diamonds. All the rest is clear.

The movement of prices for diamonds weighing 0.01 - 2.49 carats and prices for diamonds weighing 0.01 - 0.99 carats

Synthetic diamonds: a hidden advantage

So far we have dealt with the structural aspects of the diamond industry and their impact on the current situation. But there is another aspect: how consumers perceive the value of diamonds, that is, marketing. The industry should wake up and search "non-stereotyped", because the hope for the fantastic slogan of De Beers "The diamond is forever" does not work any more. Industries need to understand what everything is going to. The rapid rise of synthetic (grown in the laboratory) diamonds poses a significant threat to the demand for natural diamonds, and this growth is intensifying.

But this does not necessarily represent a threat to the industry. Conversely, the growth of synthetic diamonds can open a new era for the industry if we manage to work on it and turn it from weakness to strength. But how to do that? It is necessary to realize that we are dealing not only with a luxury and excellent product, but also with a very unique product belonging to a group of products for which the main feature is the "economy of rarity".

What is the "economy of rarity" and how are we associated with it? First, I would like to clarify the terms "scarcity" and "rarity", which some appear in the context of the "rarity economy" and sometimes confusion occurs. Deficit refers to the lack of something that can be filled at the cost of expense or with time, but, ultimately, will be replenished. Unlike the deficit, rarity refers to a commodity that is not often found in nature. These products are available in limited quantities in nature, and their resources can not be reproduced. In other words, the more they are produced, the more their shortage becomes, which can not be filled. This is a zero-sum game in which the profit of one party is formed at the expense of the other party, so that the amount of profit and loss of both sides is zero.

To return to our industry, it is necessary to consider that documented synthetic diamonds belong to a scarce economy, as they can be mass produced, and the capacity of enterprises is not limited. The more these laboratories become and the more complex means of production develop, the lower their price falls. This is not an unlimited resource, but rather an industry.

Conversely, natural diamonds can be considered and are considered a rarity - a product that can be extracted only to a limited extent, and the availability of which is reduced over the years, despite the development of new methods of exploration and large investments. Other factors also affect the rarity and economic value of natural diamonds. These include tightening the regulatory requirements of the Kimberley Process Certification Scheme, state assessment, customs clearance, the short term of raw material conversion to diamonds, and careful documentation of the final product. Natural diamonds are subjected to very strong regulation in order to maintain quality and provide the customer with a system of multiple levels of security when buying these stones.

Diamonds, like fine works of art, rare cars and fine wines, will always have a stable demand curve. Collectors, investors and market participants will always look for special prestigious products - these exclusive, rare precious stones that are not considered a commodity. This situation increases the demand for this product and, therefore, usually should lead eventually to an increase in prices for it and increase its value.

http://www.ehudlaniado.com/home/index.php/news/entry/key-changes-offer-bright-future-for-diamond-industry

Investment demand for gold and diamonds, as people transfer their funds to solid safe haven assets

Do not be surprised if diamantaires suddenly start talking about Zhu Xiaochuan and Janet Yellen. The actions of these two people, who are respectively the leaders of the People's Bank of China and the US Federal Reserve, can create additional pressure on the demand for diamonds and the price of polished diamonds in general.

Simply put, the sudden depreciation of the Chinese yuan and the threateningly sharp increase in interest rates in the US could not have come at a more inopportune time for the diamond market.

Last week, the People's Bank of China, headed by Zhu Xiaochuan, allowed the RMB to drop by almost 3.5 percent, so this currency is currently trading around CNY 6.4 to the US dollar. At first glance, Beijing sought to give the country's economy much-needed momentum, since a cheaper yuan should stimulate exports, making Chinese goods cheaper in foreign markets, especially in the US.

In the diamond industry, the cheaper yuan has had a different effect, as unlike other goods, China is a major consumer of diamonds.

The depreciated yuan makes imports of diamonds to China more expensive for buyers who convert their currency to buy goods in US dollars or sell diamonds in the local market for yuan at the dollar rate. Michael Huang, managing director of the Diamond Index Group, a supplier of expensive diamonds and diamond jewelry in China, told Rapaport News that dealers and wholesalers have already raised prices by almost 5 percent to compensate for their currency losses. Retailers have not adjusted their prices yet, but they are going to do it in the coming weeks, he said.

As a result, Chinese buyers of diamonds that have been cautious during 2015 may begin to seek large discounts to compensate for the weakened currency, Huang said. The mood of buyers at the Hong Kong Jewelery Fair coming in September will be a good barometer of demand from China.

Opposite opinion

Efraim Zion, the managing director of the Hong Kong-based company Dehres Limited, which specializes in large gemstones and diamonds of fantasy shape and color, already now expects little about the exhibition. But he denies that the yuan at the current levels will have a large negative impact on consumption.

"It can affect the market, but only if the yuan will go down to CNY 6.70 or 6.90 - then it will have a real impact," he said. Instead, he notes greater market pressures, such as a general slowdown in China's economic growth and tougher measures to combat corruption and wastefulness.

Undoubtedly, it is expected that the weakened yuan will cause a further decline in consumer demand. In particular, many Chinese tourists traveling abroad to buy luxury goods will now have fewer dollars to buy in stores such as Tiffany, LVMH and Cartier.

In China itself, a new level of the yuan, perhaps, will also reduce the demand for gold jewelry in response to the decline in gold prices in dollars (see chart). Chinese consumers usually rushed after gold, when prices fell. So it was in April 2013, when a sharp drop in gold prices caused a sharp increase in sales of jewelry in China and Hong Kong. Although a weaker gold rush was observed in July of this year, when gold prices sank by 6 percent during this month, consumers were probably more cautious about the market after the ensuing fall of the yuan.

In search of a safer haven

In any case, not everything is so bad in the industry. China's currency and stock market volatility, along with its bursting soap bubble associated with real estate, should increase investment demand for gold and diamonds, as people transfer their funds to solid safe haven assets. This can become even more important, as the Chinese economy is experiencing prolonged growth illness as it moves from an infrastructure-oriented and export-oriented model to an economy driven by consumption.  

But now people calculate their losses. A lot of money was sent to the stock markets during the boom in the last few years. Most of this money was lost in the last two months.

Juan sees a ray of hope among the clouds that hang over the diamond industry. "People in the short term will be upset because they do not have the money to spend," he explained. "But in the long run, recent declines have shown that stock markets and other investments are volatile. They need assets that demonstrate fair value and are sustainable, and diamonds are so. Therefore, I believe that in the long run people will return to diamonds. "

Zion agrees that at the moment consumers do not think about diamonds. He would like to see that the government is taking measures to restore confidence, for example, continues to lower interest rates further - well below the current record low of 4.85 percent.

Observers believe that the recent weakening of the currency was an attempt by the authorities to reduce the supply of money as it directs its economic transition along with a change in the dynamics of global development. Analysts at VTB Capital explain that China's monetary policy potentially follows US policy, as it has a "creeping" peg to the dollar.

http://www.diamonds.net/News/NewsItem.aspx?ArticleID=53181&ArticleTitle=%2bIs%2bDiamond%2bDemand%2bDetermined%2bin%2bBeijing%2band%2bWashington%253f

Concession area in accordance with a time resolution

Zimbabwean diamond company Zimbabwe Consolidated Diamond Company (ZCDC) lost to the cause of getting the possibility of extraction of diamonds from the country's High Court tailings concession Mbada Diamonds, reported in the local media. Last year Mbada Diamond miners and others were expelled from their concessions.
Earlier ZCDC not responsible for the corresponding order of the High Court, published in February.
According Zimbabwe Independent, belonging to Mbada concession is 150,000 tons of diamond ore ready for processing.
"In anticipation of an appeal filed by the first respondent in the case, the first and second defendant and those who act on their behalf, are hereby prohibited from collecting from the territory of the concession of the third defendant diamond-bearing ore mined third defendant, access to protected members of the third defendant security objects, or otherwise interfere in any way in the activities of the said concession area in accordance with a time resolution given by this court February 24, 2017 ", - stated in the acting Court SRI.
ZCDC was formed last year after the government refused to renew the license for production of diamond companies that have worked in Chiadzwa (Chiadzwa).
However Mbada Diamonds, Anjin and Jinan are suing the government, while the Marange Resources, Diamond Mining Company, Gye Nyame, Kusena and Rera Diamonds obeyed the decision.
Anjin and Jinan reached out of court agreement with Harare, while Mbada equipment has been sold for the payment of its debts.

Demand for gold recorded a significant increase in the annual rate

Retail sale of gold and silver jewelry in China rose 7.8% in the first four months of this year, indicating further signs of improvement in the market, according to data released by China's National Bureau of Statistics.
Sales rose to about $ 15 billion from January to April compared with the same period last year. Retail sales in April also recorded growth year on year by 7.5% to $ 3.32 billion.
China's jewelry industry has started to recover in December 2016, when sales recorded a 4.8 percent increase to $ 4.7 billion. Sales in Globally, in 2016 we recorded a steady growth of about $ 43.68 billion on an annualized basis, which indicates an improvement after almost continuous decline in sales since the beginning of 2016.
China Gold Association has previously said that gold consumption in China remained high in the first quarter of 2017, mainly due to strong demand for gold jewelry in the Chinese New Year, it said in its report.
In addition to gold jewelry demand for gold bars recorded a significant increase in the annual rate of 60.18% to 101.19 tons. Currently, gold bars are becoming more popular in China as a hedge, the association said in a report.

Maximum realization of revenue from diamonds

Zimbabwe's Ministry of Finance announced that it would take control of the diamonds produced in Marange (Marange) and Chimanimani (Chimanimani) after capitalization Zimbabwe Consolidated Diamond Company (ZCDC) in the amount of $ 80 million through the country's central bank.
ZCDC was created last year through the merger of Marange Resources, Gye Nyame, Diamond Mining Corporation and Kusena.
"There are two kinds of minerals that disappoint us -. It's diamonds and coal We capitalized ZCDC in the amount of $ 80 million, and there is a new agreement with ZCDC, according to which, after the company's capitalization diamonds automatically go into the treasury" - quoted by The Herald Finance Minister of Zimbabwe Patrick Chinamasa (Patrick Chinamasa).
"Thus, each mined diamonds will flow into the coffers through the Reserve Bank of Zimbabwe, and we think that this will improve transparency and ensure the maximum realization of revenue from diamonds," - the minister added.
Diamond companies operating in Marange concession had to leave because of the revocation of their licenses by the government.
Also demanded from them to become part of ZCDC, but Mbada Diamonds and Chinese holding OFECC, which controls the company and Jinan You Anjin, refused and filed a lawsuit against the authorities.
In February Chidakva Walter (Walter Chidhakwa), Zimbabwe's minister of mining, told Rough & Polished, that Harare has reached out of court settlement with the Chinese.
ZCDC lost in the High Court of the country a case of getting the possibility of extraction of diamonds from tailings concession Mbada Diamonds.
According Zimbabwe Independent, belonging to Mbada concession is 150,000 tons of diamond ore ready for processing.
In addition, Zimbabwe has recently paid $ 5.4 million for the Russian diamond company DTZ-OZGEO, acting in the African country to obtain its concession in the Chimanimani district.
State media claimed that ZCDC currently produces 200,000 carats per month.
Last year ZCDC produced about 900,000 carats against the peak performance of 12 million carats per year.

Cooperation in the field of diamond production

Alrosa will take part in the development of a new diamond deposit Luashe (Luaxe) in Angola.
Within the framework of signed constituent documents on establishment "Luashe" international enterprise visit of the Russian official delegation of ALROSA President Sergey Ivanov and the president of the national diamond company Endiama Sumbula Carlos (Carlos Sumbula) May 23, 2017.
In particular, the signing of three documents: a memorandum of understanding between Endiama and Alrosa companies, international investment contract "Luashe" and the notarial record of establishment of the enterprise "Luashe".
Russian Deputy Prime Minister Yuri Trutnev, who also took part in the visit, stressed that cooperation in the field of diamond production, and, in particular, between Alrosa and Endiama, is an important component of Russia and Angola Economic Cooperation. He also noted that the development of new projects, active exploration and the search for new deposits positively affects the development of the Angolan economy and the partnership between the two countries.
In 2013 kimberlite pipe was discovered in the course of exploration work on the concession Luashe, dubbed "Luele".
Alrosa will take part in the project through its subsidiary "Catoca", which will receive a new structure of a stake of 50.5%. Furthermore, Alrosa will soon submit for the Supervisory Board of the company offer to acquire an additional 8% "Luashe" directly.
Given the size of the ore body and the preliminary data exploration, "Luele" working out of the tube is of considerable economic interest for the project participants.

Ensure equal access to raw materials for all of its participants

The foreign diamond manufacturers who are customers of ALROSA and offer cutting and polishing plants in Russia, should be given preference in the purchases of rough diamonds from the Russian diamond miner, said Deputy Prime Minister Yuri Trutnev.
This issue was discussed with the new president of Alrosa Sergeem Ivanovym, who "understands that if companies come to Russia for them is necessary to create favorable conditions for the purchase of stones," Trutnev told reporters, who is also the representative of the Russian President in the Far East.
"What this will lead to ALROSA sales policies in some changes It will not happen instantly?." - Trutnev said.
ALROSA opened "Eurasian Diamond Center» (EDC) in Vladivostok, which in September 2016 was granted the status of a free port, in the framework of policies to strengthen market presence in the Asia-Pacific region and the increase in diamond production volumes in Russia.
EDC was the first resident Indian KGK Group, which, according to representatives of the Corporation's development of the Far East, is ready to invest about 500 million rubles in the cutting and polishing factory in Primorye. It is expected that the plant will be established within four years, and the production capacity will reach at least 15 million carats. KGK, one of the largest customers of the company ALROSA on a long term basis, operates directly and through two subsidiaries, registered in Yakutia: DDK LLC and SD Diamonds LLC.
KGK, according to market participants, ALROSA may ask some of the favorable conditions for the purchase of rough diamonds, although the provisions of Alrosa Alliance, the association of long-term clients of the company, ensure equal access to raw materials for all of its participants. ALROSA also held talks with other customers for the construction of cutting and polishing enterprises in Primorye, but details were not disclosed.
Trutnev said that KGK has brought to the country the equipment for the new plant. "There is a complex personnel training scheme first in the enterprise will be a lot of them (KGK) workers, but they will teach (Russian personnel) and to change the proportion of employment in our favor." - he said.

To stimulate consumer demand for diamonds and diamond jewelry

Foundation of the World Diamond brand (World Diamond Mark Foundation, WDM) will hold a presentation of a consumer-oriented campaign "Part of you» (Part of You) at JCK LUXURY exhibition on June 4 in Las Vegas, as well as introduce a website for its new brand B2C ( business to consumer) - www.passion.diamonds .
The event exclusively focused on retail jewelers who want to understand why the story of the diamond is important for the successful promotion and sales, including diamond jewelry.
Of WDM at breakfast perform Kalman-Christine Schuler (Krisztina Kalman-Schueler), director of the program, and Yaakov Almor (Ya'akov Almor), communications director and chief editor of World Diamond Magazine. For questions will also be available WDM President Alex Popov (Alex Popov).
WDM team will present an explanation, why the story of the diamond is key to its promotion, and will hold a presentation of the campaign "A part of you" through its demonstration on a separate website, as well as the format of digital marketing and social media channels. Campaign "Part of you" is designed to captivate prospective buyers of diamonds by acquaintance with the history of the appearance of diamond jewelry, as well as to orient them to the trusted retailers that are members of WDM program - "Authorized diamond dealers."
Foundation of the World Diamond brand was founded on the premise that diamonds and diamond jewelry can and should play a greater role in the market class "luxury" goods. To achieve this, the industry entities - from manufacturers to retail diamond jewelers marketers - need to communicate more effectively promote, advertise and sell to the final consumer of polished diamonds and diamond jewelry.
The overall aim of WDM, established in 2012 by the World Federation of Diamond Bourses (World Federation of Diamond Bourses), is to stimulate consumer demand for diamonds and diamond jewelry.

Largest and oldest organization of the diamond trade in the United States

Diamond Dealers Club of New York (Diamond Dealers Club of New York, DDC) has gained its new headquarters in the International Diamond Tower (International Gem Tower, IGT) in Manhattan.
The DDC, the largest and oldest organization of the diamond trade in the United States, will take their offices in June this year.
"Being the anchor of the diamond district of New York, DDC and its members will be able to conduct their business in a beautifully designed open retail space with the most modern technical facilities, a cafeteria relaxing, sitting area and stunning views from the panoramic windows," - said in a statement DDC.
"IGT is crucial to the future success and stability of the diamond industry on 47th Street in New York, - said the President of DDC Reuven Kaufman (Reuven Kaufman) -. I believe that this new facility and the marketplace will bring incredible benefits to our members ".
IGT has been specifically designed for the needs of the global industry of gems and jewelry. In addition to the latest security system, which includes the iris recognition scanners at the turnstiles lobby, owners also benefit from underground parking on site, and private health and fitness center.

They also underestimate the actual content of gold

According to media reports, Tanzanian President John Magufuli fired the minister of mining and the head of the State Agency for Audit of Mineral Resources.
Reuters reported that they were relieved of their duties after an investigation of possible undeclared export of natural resources, mining companies, and tax evasion.
The investigation report showed that mining company Acacia Mining announced the availability of gold, copper and silver for export of mineral sands, but has not announced the content of other precious metals in these parties.
"The Committee (investigating export) found that in the shipping containers that have not been announced, there were many other minerals, such as sulfur, iron, indium, titanium and zinc," - said Magufuli.
"They also underestimate the actual content of gold, copper and silver in these transport containers", - he added.
Nevertheless, of Acacia he stated that it is fully declared the commercial value of the produced batches, and paid all relevant royalties and taxes.
Meanwhile Magufuli said the Minister of Mining and Minerals Sospeter Muhongo (Sospeter Muhongo), as well as the Director of the State Agency for the Audit of Mineral Resources of Tanzania (Tanzania Minerals Audit Agency, TMAA) Dominique Rvekaza (Dominic Rwekaza) were found guilty of insufficient export monitoring gold and copper concentrate from the country.
"I really like Professor Muhongo ... he is my friend, but I would like to he assessed his actions in this matter and to immediately vacate the position," - said Magufuli after receiving the report on the study of more than 250 confiscated containers containing gold and copper concentrate.
It is alleged that the president also dismissed TMAA board, saying that it could not properly control exports.
By Reuters data, the share of the mining industry accounts for about 4% of GDP Tanzania.