Exposing the Fraudulent Undisclosed Synthetic Diamond Trail

DIAMOND INTELLIGENCE BRIEFS
A Confidential
Service for
Executives in
the Diamond
and Diamond
Jewelry
Business
EXC
LUSI
30 May 2012 | Vol.27 No.710
VE E
XPO
SÉ
By Chaim Even-Zohar
Exposing the Fraudulent
Undisclosed Synthetic
Diamond Trail
A photograph of the undisclosed synthetic
diamonds submitted to the IGI in Antwerp.
7299 4 CORNERS OF THE GLOBE  7302 DIGGING THE DIRT
7306 BRIEFLY NOTED  7307 OFF THE SHELF
EDITORIAL
S
elling synthetic diamonds as if they were naturally mined
goods is, perhaps, the gravest crime one can commit
within the trust-based diamond community. The (by
now) notorious undisclosed synthetic polished diamond
parcel submitted to the International Gemological Institute (IGI)
laboratory in Antwerp - that Diamond Intelligence Briefs first
revealed last week - has catapulted to the top of the industry’s
concerns – and perhaps its fears.
Among the industry’s leadership in the major centers one
can sense an intense feeling of betrayal. Calls are being made
for emergency meetings to contemplate what to do next. There
seems a resolve that “someone has to pay for this dearly, has
to be held accountable, has to be removed from this industry
forever – or maybe even more infinitely….”
But it is not just anger reverberating through the international
diamond centers – there is a genuine anxiety about the future
of the diamond business.
DIB set out to uncover the transaction trail – finding the sellers
and the source of the undisclosed synthetic diamonds. Chaim
Even-Zohar’s second report on this subject follows:
Pure Synthetic Gemesis Parcel
Reacting to last week’s story, the IGI advised that the parcel
of hundreds of synthetic stones was not “mixed” but made up
entirely of synthetic stones. The buyer of the goods intimated
that he made a selection from a larger assortment –maybe four
or five times larger; he simply took “a cut.” One is talking about
thousands of synthetic stones worth tens of millions of dollars if
sold as naturally mined goods.
We believed last week that the parcel was composed of
Gemesis-created materials. However, in order to allow any of the
parties to come forward, we wrote in our editorial that Gemesis
was the “most probable source.”
Then, we watched how Gemesis President and CEO Stephen
Lux sprang into action. A responsible, concerned, realistic and
humble manager would have responded along the lines of:
“This is very serious. This runs against all our ethics and good
governance principles. I hope these are not our diamonds. In
any event, we shall do everything to assist the industry to get
to the bottom of this.”
Instead, Lux sent e-mails to select trade journalists in which
Comparison : CVD + heated from IGI Parcel versus other CVD
Chemical Vapor Deposition (CVD) synthetics can be grown under a range of growth conditions and chemistries and the spectroscopic
properties of the material will vary according to these differing growth conditions. In addition, these synthetics may be heat treated
after synthesis to improve certain properties and this heat treatment can lead to changes in impurity structures, which can also be
probed using spectroscopic techniques.
Undisclosed CVD synthetic (Image 1): bluish green luminescence dominates as
is often the case for synthetics that have been heat treated after synthesis. This
CVD synthetic shows clear evidence of post synthesis heat treatment.
As grown CVD synthetic (Image 2): orange luminescence from nitrogenvacancy defects dominates as is generally the case for CVD synthetics that have
not been heat treated after synthesis.
Image 1: DiamondView Fluorescence image:
Undisclosed CVD synthetic submitted to IGI
Coarser striations observed in the CVD synthetic in Image 2. These striations
are a result of the “steps” that form during CVD synthesis. The difference in
striations indicates that the CVD growth process was significantly different
resulting in different surface features forming during growth.
Regions of blue luminescence observed in the CVD synthetic in Image 2 are a
result of extended defects called dislocations. For synthetics these are
generally associated with lower quality material.
Image 2: DiamondView Fluorescence image:
Non-heat treated CVD synthetic
The greenish image of one of the stones in the IGI parcel
shows identical characteristics of Gemesis synthetic images
in the professional literature. The second image is of a nonheat treated CVD. The IGI is the lab that has the best
judgment of what is a Gemesis stone, as they do all the
Gemesis certification and know these stones very well.
DIB # 710, May 30, 2012
DIAMOND INTELLIGENCE BRIEFS 7292
EDITORIAL
he implicitly tarnished other
producers who allegedly have
the same synthetic capabilities
and then declared: “Gemesis
can assure the industry with 100
percent certainty it has not been
involved in selling its diamonds
as mined, and the undisclosed
diamonds referenced in the DTC
and IGI alerts are not Gemesis
diamonds.”
Stephen
Lux
We wonder what Stephen
Lux will say after learning that,
beyond any shadow of a doubt, his statement was 100 percent
inaccurate. More about this later.
Synthetic Fingerprints
Synthetic diamonds have a very specific fingerprint; the
composition of the stone will identify its source. An experienced
producer explained it in layman’s terms as follows: “The basic
know-how for growing CVD or HPHT synthetic diamonds is not
so difficult. The technology is widely available on the market.
However, each producer has its own secret ‘recipe’ – what
materials to use, what ‘ingredients to put in it,’ what seeds, what
combination of temperatures, etc. After having acquired the HPHT
diamond growing equipment, it still took Gemesis some seven
years to get its recipe right. Therefore, when one compares several
stones of Gemesis synthetics, one will unmistakably recognize
that these come from one and the same source. The specific
composition is unique to the Gemesis process.”
The DTC Diamond Research Center basically made a
comparison between the goods submitted to the IGI – photos
of which we publish with this article – and other known Gemesis
photos. In a most careful manner, the DTC wrote in its alert
to clients: “The DiamondView and photoluminescence results
indicate that the CVD synthetics have been heat-treated post
synthesis and we note that the combination of characteristics
listed above [in the alert] is strikingly similar to that reported by the
GIA for 16 CVD synthetics received from Gemesis Corporation.”
That being said, the ultimate confirmation comes from finding
the physical source – the office, the inventory – of the synthetic
diamonds that were submitted to the IGI. And indeed, we found it.
The Seller: Su-Raj Diamonds in New York
The trail of invoices covering the purchase of the undisclosed
synthetic diamonds leads to the source – Su-Raj Diamond &
Jewelry USA in New York. This company is ostensibly owned by
a partnership between Ashok Bhansali and Jatin Mehta (the
very same Jatin Mehta who is also the majority shareholder
in Gemesis). More precisely, Jatin’s ownership is through the
publicly listed Su-Raj company in India – at least until recently.
When the buyer of the undisclosed synthetic diamond parcel
discovered that the goods were synthetics, he immediately
called the New York broker who had served as intermediary
between him and Su-Raj. When the broker called Su-Raj’s Ashok
Bhansali, the latter reputedly didn’t sound surprised. Formally,
he has apparently claimed innocence. He reportedly has said
that he “had bought these goods on the New York market.” He
denied knowing that the diamonds sold in
this transaction were synthetics. [DIB was
unable to reach Bhansali before press time;
we have left our phone number with his
secretary.]
This is something the diamond trade
has to come to terms with: when caught
dealing in undisclosed synthetic diamonds
that are being passed off natural, the first
reaction will always be “I didn’t know.” In
some instances this will undoubtedly be true.
Jatin
In this article we are not accusing
Mehta
anyone specifically of committing a crime.
We are not qualified, nor do we have any intention, to do so.
We are just presenting the facts as we have uncovered them.
We do say, however, that clearly a crime was committed by
someone in the transaction chain. Otherwise, no undisclosed
synthetics could have been submitted to the IGI lab. In our
journalistic sleuthing, we didn’t look for people – but rather for
the diamond source.
Gemesis NY Fulfillment Center
in Su-Raj Offices
Now back to Gemesis. In a letter to shareholders in November
2001, Steve Lux reports that “the company has been working
nonstop to properly complete and launch our new e-commerce
website. It was the desire to report that the new Gemesis website,
which would facilitate the sale of our diamonds and jewelry
directly to consumers, was up and running. However, that event
DIAMOND INTELLIGENCE BRIEFS 7293
EDITORIAL
Photos of
"Undisclosed
Synthetic Parcel"
- courtesy IGI,
Antwerp
has yet to occur.” The website has, in the meantime, become
operational.
Writes Lux: “Gemesis has established its order fulfillment center
in New York to appropriately handle the web-based sales.” Lux,
who had told us previously that he is the CEO in charge of all
Gemesis global sales – both from Singapore CVD facilities and
from those produced by the HPHT process in Malaysia – has
in fact moved the firm’s diamond inventory to New York. This
transfer was completed around the end of 2011.
To make a long story short: the Gemesis New York fulfillment
center, i.e. the Gemesis inventory, is housed in the very same Su-Raj
Diamond & Jewelry USA offices from which the sale of undisclosed
synthetic diamonds was made. Is this just a coincidence? Maybe.
Gemesis has hired an experienced New York diamond
salesman, Michael Chernick, to manage its fulfillment center.
Chernick has a sterling reputation. He left a position as head of
diamond buying at Kaprielian Enterprises, Inc. to work for Gemesis.
After Lux made his statement about being “100% certain that
the [undisclosed] diamonds were not Gemesis diamonds,” we
queried “How would you explain that a huge amount of pure
synthetic stones would be available at your own fulfillment center,
under the eyes of a Gemesis employee, in premises owned by
the majority shareholder of Gemesis (both USA/Malaysia and
Singapore) and that these synthetics would – as you suggest –
100% originate from NON-Gemesis sources?”
Lux responded: “there is no common ownership between
Su-Raj NY and Gemesis USA. It is true that we have rented space
in NYC but this space is independent of any other company,
has its own entrance, staff, safe and pays fair market rent for
its use. The owner of the premises happens to be Su-Raj NY.”
The undisclosed synthetic sale was made by Su-Raj Diamond
& Jewelry USA – not by Gemesis. The paper trail shows that SuRaj invoiced a local broker, and the local broker invoiced the
Indian buyer in Antwerp.
CVD synthetic
0.52ct VS1
CVD synthetic
0.58ct VS1
CVD synthetic
0.56ct VS1
An Equation That Does Not Add Up
Somewhere, somehow, there is still something that doesn’t
make sense. Jatin Mehta has invested tens of millions of dollars in
acquiring or developing Gemesis synthetic gem-quality diamond
technologies. He is probably one of the two or three largest firms
in the gem-synthetics world. Why would he risk his investments,
his reputation, and his other diamond and jewelry enterprises
by allowing a company under his ownership to engage in what
appears to be unscrupulous activities? Might it have been “an
accident?”
One might possibly argue about business ethics – Jatin is
a shrewd and occasionally controversial businessman having
created a billion-dollar diamond and jewelry empire. He has
also had his share of legal challenges. But even his (many)
detractors will agree that he has a brilliant mind, bordering on
genius. Willfully doing something so stupid would be totally out
of character for him. Drawing Su-Raj into a possible criminal
investigation would immediately impact his company’s share
price and would draw in stock exchange investigators. With the
trail now clear, it was time for Su-Raj Chairman Jatin Mehta to
give some answers.
Su-Raj New York is NOT Su-Raj India
We caught Jatin on the phone while he was on his way from
Dubai to New Delhi. He was eager to give explanations and to
answer questions. The first thing he stressed was that on the 14th
of February 2012, the Su-Raj mother company in India formally
adopted a board resolution to disinvest from Su-Raj Diamonds
& Jewelry USA, Inc. (in New York), from Su-Raj Diamonds NV
(in Belgium), and from Su-Raj Diamonds (HK) Ltd. The board
authorized Jatin Mehta “to execute the necessary transfer forms
DIAMOND INTELLIGENCE BRIEFS 7294
EDITORIAL
and/or other documents and to do all necessary acts, deeds and
things as may be required to carry out the aforesaid disinvestment
of the subsidiary companies.”
Thus, while the name Su-Raj still appeared on the doors in
New York, Belgium and Hong Kong, and the businesses were
still operating as Su-Raj, Jatin Mehta made it clear that he was
not involved with them anymore. The business in New York
continued with his former partner, Ashok Bhansali. Though this
may appropriately reflect the legal situation, it still raises many
questions.
Clearly, Jatin Mehta went out of his way to disassociate
himself with the undisclosed synthetic sale that had taken place
in his offices. However, he remained very vague as to whom the
shares of these subsidiaries were sold and for how much, and
what has happened with their diamond stocks. The “effective
implementation” date is not known as well.
Su-Raj (India) Company Secretary Asish Narayan confirms
that the U.S. company "has not been privatized and its shares
have not been sold to [Jatin's son] Mr. Suraj Mehta. Information
on the sale of the shares will get reflected in our Annual Report
to the shareholders and Statutory Authorities as per the legal
requirements of ouyr country."
The New York Inventory of Su-Raj
In the diamond business, when a partnership is being dissolved,
one of the partners (usually the financially stronger one) will
post a notice in the diamond bourses announcing that from
a certain date, one partner ceases to assume responsibility for
the debts, obligations and actions of the other partner. Under
New York law, if at the time the transaction took place, Jatin
was neither a shareholder nor a director, he, indeed, cannot
be held responsible for the company’s actions.
The nature of the “partnership” with Ashok Bhansali may well
become a potent issue as this saga evolves. According the SuRaj India Company Secretary Asish Narayan, “the question of
breaking the partnership does not arise as the above [disinvested
companies] are 100% subsidiaries and separate legal entities
duly registered under the relevant corporate laws of respective
countries.” According to the records of the New York Department
of State, as of May 25, 2012, no name change had been filed
for Su-Raj Diamonds & Jewelry USA, Inc. So why would Su-Raj
India disinvest in its subsidiary but allow new shareholders to
continue to use its name?
In India, Su-Raj (the mother company) is a member of the
diamond bourse. The question thus arises as to whether such an
announcement of ownership change to the bourses needed to
be made. Narayan assures us that “our Company has not violated
any statutory or customary laws of the Bharat Diamond Bourse.”
In any event, the New York diamond market was apparently
not aware of the separation. But the essence – to me – was the
synthetic diamond stocks. How is it that whoever made the sale
DIAMOND INTELLIGENCE BRIEFS 7295
EDITORIAL
Bharat
Diamond
Bourse
originated from some [unnamed] Chinese producer who also
sells massive amounts of gem-quality synthetics on the market.”
When I countered that the synthetics submitted to the IGI
had the specific Gemesis fingerprint, the implications of which
Jatin Mehta clearly comprehended, he offered another scenario:
“There were some people who had left Gemesis before I assumed
control; they might have stolen our technology and are thus
producing our typical characteristic Gemesis goods,” he suggested.
Neither answer is satisfying. Gemesis didn’t have CVD
technology before Jatin Mehta became the controlling shareholder.
So it seems implausible that the technology was stolen; and even if
this was the case, it would have taken years to get to any production
on a meaningful scale. Again, something doesn’t add up.
The Ashok Bhansali Factor
at Su-Raj Diamonds & Jewelry USA in New York had access to
these un-inscribed synthetic diamond stocks?
Jatin Mehta Explains
Jatin Mehta had no clear answers. He alluded that it was
possible that the seller of the undisclosed synthetics (i.e. his former
partner) “had misappropriated stocks held previously by the
partnership.” It was also possible, he suggested, that “these stocks
Jatin Mehta suggested that at the relevant time, the Su-Raj
office in New York was managed and owned by Ashok Bhansali.
Irrespective of the kind of involvement in the specific transaction
– on which we don’t want to comment – there remains the
general question of overall legal responsibility. If Bhansali is a
member of the Diamond Dealers Club of New York, this may
also have ramifications.
Most of our contacts say that Bhansali is an employee and
not a principal of Su-Raj Diamond & Jewelry USA, and if he
THE GEMESIS BOARD OF DIRECTORS: COUNCIL OF SAGES
W
ho runs the U.S. Gemesis Corporation? Its Board of Directors that counts only three individuals: Chairman (and
company founder) Carter W. Clarke, Gene Josephs and Stephen Lux. The company has probably more than 100
shareholders, but the reality is that the bulk of the shares (next to the 50.1 percent that is held by Jatin Mehta or his
assignee) are held by a gentleman, now well over 80 years old, named Dwaine Willett.
When Gemesis was about to go bankrupt, around 2006, Willett came to the rescue investing US$20 million in the company.
When Willett joined, virtually all of the company’s original shareholders saw their holdings diluted to next to nothing. One of
those shareholders is Grace Venture Capital, an early supporter of Gemesis.
Willett comes from car dealerships. His background includes positions with A Betterway Rent-A-Car Inc., Willet Toyota Inc.,
and a Honda dealership in the Atlanta region. Since 1969, he has owned and operated up to seven auto dealerships in the
Atlanta, Georgia, and Orlando, Florida, regions. He has been a majority shareholder in seven Budget-Rent-A-Car franchises
operating in the Southeast and Midwest of the United States.
From the car rental business Willet drove straight into Gemesis through a company called Investment Partners of Orlando
in which he is a partner. He appointed the president of this investment company, Gene Josephs, as his representative on the
board of Gemesis. What background does Josephs bring to the table?
Josephs, now in his early 70s, worked for IBM Corporation for 31 years holding various positions including systems engineer,
marketing representative, financial programs manager within state/local government, product staff and field marketing
management. In 1998, he assumed the helm of Investment Partners of Orlando (IPO), a venture capital firm with investments
primarily in high technology companies. He sits on the boards of a range of companies in the software, high-tech and
banking sector.
Carter W. Clarke, now deep in his 80s as well, founded and served as the first CEO of Gemesis. He spent 26 years in the
U.S. Army in a variety of command and staff positions, attaining the rank of Brigadier General in 1970. Clarke retired from
the Army in 1973 to pursue business interests. From 1975 to 1980, he founded several electronic security companies. He is the
last remaining member of the old guard.
Jatin Mehta is not represented on the board. Maybe he doesn’t need it.
DIAMOND INTELLIGENCE BRIEFS 7296
EDITORIAL
is a principal, it would only be a few percentages, perhaps
signifying more of a profit-sharing arrangement rather than a
formal ownership. The 44-year-old Bhansali has a long history
with Su-Raj, actually all of his working life has been tied to the
company. As a teenager, he started to work for the company
in Mumbai. He soon moved to what was then called Alma
Diamond in New York, which was a partnership between Jatin
Mehta and a now retired brother-in-law.
Bhansali has been associated with a number of companies,
such as ASB International, Inc. (in New Jersey), Su-Raj Diamonds
Industries PVT Ltd. (in New York) and others. More recently, he
also seems to be a shareholder in Shine Diamonds & Jewelry LLC,
a company established in 2007 in New York. Another company is
VJM Jewelry, LLC, in New York, which closed its doors in mid-2011.
His status at Su-Raj Diamond & Jewelry USA is formally that of
Company Secretary and Treasurer, while Jatin Mehta is Chairman.
To what extent any of this makes Bhansali owner or responsible
director is not for us to determine. Clearly, Bhansali is a core
factor in this story.
Where is the Gemesis Rough Production?
The interview with Jatin Mehta was extremely frank. Moving
to the subject of rough synthetic production, we noted that
based on publicly available information, there seems to be a
lot of synthetic rough unaccounted for. Where is the missing
synthetic rough, we queried. Jatin countered that there had
never been much production – and the figures quoted in the
market are greatly exaggerated.
Our figures are based on a variety of sources. There was
a 2007 interview (by Danielle Rossingh of the National Post),
where Gemesis CEO Steve Lux stressed his “aim is to take 10%
of the rough market, in value terms, in five years.” That would
put synthetic rough sales at a US$1.7 billion annual level, which
is clearly not remotely the case – and certainly not for Gemesis.
Focusing specifically on his company, Stephen Lux (in a 2009
interview with David Finlayson, a journalist with “The Gazette”) said:
“Four years ago, Gemesis had 24 diamond-producing machines.
Now it has several hundred producing hundreds of millions of
dollars revenue at the wholesale level.” Hundreds of millions?
In 2011, according to the Gemesis financial reports submitted
to shareholders, Gemesis’s gross revenues were running at a
level of about US$250,000 per month. That comes to about
US$3 million a year (three single millions). We know that a few
years ago, the company was selling synthetic rough at a level
of some US$2-US$3 million a month. Thus, we have now the
rather perplexing and incomprehensible situation in which the
company is obviously growing – but its revenues are plunging
to near nothing. The hundreds of millions of dollars in revenues
on the wholesale level seem, to paraphrase a term used by Lux,
“close to 100% a distant pipe-dream.”
A close-up of the
boxes of undisclosed
synthetic diamonds
that were submitted to
the IGI in Antwerp.
GEMESIS SYNTHETICS
ARE UNIQUE AND IDENTIFIABLE
The individual characteristics (or “recipe”) of each
CVD synthetic diamond is also the result of the specific
technologies derived from unique patents. This week,
another Gemesis-Singapore patent was published as
described below. Producers using patents held by other
producers sooner or later will find themselves in court.
LATEST GEMESIS SINGAPORE PATENT DETAILS:
Method for growing white color diamonds by using diborane
and nitrogen in combination in a microwave plasma
chemical vapor deposition system
Applicant:
Publication:
Filed:
Status:
The Gemesis Company, Singapore
2012-04-05
2010-10-11
application
Scientific Description: The present application discloses the
details of a microwave plasma chemical vapor deposition
process that uses Nitrogen and Diborane simultaneously in
combination along with the Methane and Hydrogen gases
to grow white color diamonds. The invention embodies
using nitrogen to avoid inclusions and impurities in the CVD
diamond samples and Diborane for the color enhancement
during the growth of diamond. It is also found that heating
of the so grown diamonds to 2000 C results in significant
color enhancement due to the compensation of Nitrogen
and Boron centers in the samples. The origin of the various
colors in diamond is explained on the basis of the band
diagram of CVD diamond.
DIAMOND INTELLIGENCE BRIEFS 7297
EDITORIAL
New Synthetic Marketing Strategy
in the Making?
Why would the Su-Raj mother company disinvest from Su-Raj
offices in such important countries such as USA, Belgium and Hong
Kong? According to one source close to the situation, “Jatin
Mehta will walk the extra mile to keep the synthetics business
out of the Su-Raj public company. He is most likely to register
these companies in the names of his children and wife Sonia and
then turn these venues into marketing offices of synthetics. For
this very same reason one can soon expect the disinvestment
from the Dubai-based subsidiary Su-Raj Diamonds and Jewellery
DMCC as well,” predicts my source. [By the way: Su-Raj in India is
going to change its name in the near future – it will be renamed
“Winsome Diamonds and Jewellery Limited.”]
“It seems quite likely that much of the Singapore CVD synthetic
production, annealed by the Gemesis Malaysia operations, is
already channeled through the New York office. This would
certainly explain the undisclosed synthetic diamond sale,”
concludes the insider.
This could be reason for the minimal sales level of Gemesis
USA – to the detriment of its American shareholders. Since the
creation of Gemesis, some US$50-US$60 million has been poured
into it, says one shareholder. This begs the questions: Where is the
money? Where is the rough? Was Su-Raj “bypassing” Gemesis
in its sales, as the New York incident might imply?
Anyone Invited to Inspect Su-Raj Jewelry
Su-Raj mostly sells its products to jewelry wholesalers in New
York, Antwerp, Hong Kong and Dubai with whom it has long
established relationships. “Is it possible,” I asked Jatin Mehta
almost hesitatingly, “that if we would take a tour of jewelry
stores selling your products we might find undisclosed synthetics
diamonds set in jewelry?”
Jatin became upset. “I invite any industry body, the DTC, the
labs, yourself, to come immediately to India and I will facilitate
visits to every place where we have diamond jewelry for you
to inspect,” he answered. “I am running a transparent business
on the highest ethical standards.”
Then I asked if, likewise, he would cooperate – and have his
people cooperate, including those at Gemesis – in giving all
information and every assistance to investigate the New York
undisclosed synthetic diamond sale. To this, he answered, “of
course! That goes without saying.” I believe his response was
uttered with the utmost sincerity.
What Next? A Sigh of Relief!
On the eve of the Las Vegas show, the greater understanding
of the source of the undisclosed synthetic diamond transaction
trail will give many dealers a sigh of relief. They can be confident
about their own stocks, as they know where they bought their own
goods. The “witch hunt” that was going on, easily representing
the loudest whisper in the diamond pipeline, is over. What remains
is that the industry and the authorities will have to decide what
to do with the players in the fraudulent transaction trail.
Clearly, something happened in a New York partnership
that had been dissolved. The main ex-partner, Jatin Mehta, has
unequivocally pledged his cooperation in getting to the bottom
of this. Ashok Bhansali has still not returned our phone calls.
No, we still don’t know everything yet – but we know enough
to conclude that there is no reason for a clash between the
synthetic producers and the natural diamond industry. Both sides
seem committed to take all the necessary measures to avoid
recurrence. And, most importantly, the main players involved are
engaged – and will be engaged – in a dialogue. This certainly will
restore the confidence that had been shaken by this unfortunate
Antwerp/New York incident. ♦
Chaim Even-Zohar
HRD Antwerp among the Diamond Labs with Synthetic-Detection Technology
I
HRD
Antwerp's
D-Screen
Technology
n this editorial, we have mentioned the IGI and De Beers as having technology to distinguish synthetic
diamonds from naturally mined ones. The HRD Antwerp diamond lab has also developed a compact
screening device, called the “D-Screen,” which differentiates natural from potentially synthetic colorless
or near-colorless polished diamonds.
“For the large majority of near colourless polished diamonds on the market, D-Screen guarantees that
the diamond is not-synthetic and not-HPHT treated. For the number of stones that are referred for further
examination, an additional investigation in a reliable laboratory is necessary,” reports the HRD Antwerp.
The diamond-grading lab says that it has also developed a compact screening device for traders
to use in their office or elsewhere that will conclusively identify synthetic diamonds. “By screening the
diamonds, ‘D-Screen’ can distinguish between natural diamonds and potentially synthetic or treated
ones. The instrument tells whether a diamond passes the test or is recommended for further examination
in the diamond lab.”
DIAMOND INTELLIGENCE BRIEFS 7298
ZIMBABWE
Alrosa and its subsidiaries AlrosaNyurba, Almazy Anabara and
Severalmaz could supply up to 4 billion
rubles (US$124.5 million) worth of rough
diamonds to the State Precious Metals and
Gemstones Repository (Gokhran) in 2012,
reports Interfax, citing an Alrosa statement.
Alrosa did not sell diamonds to the
Gokhran in 2011. The repository bought
US$1 billion in rough from Alrosa in 2009.
According to Interfax, Alrosa thought
about selling US$300 million worth of
diamonds to the Gokhran in 2011, but
changed its mind after market prices
increased last year by, on average, 53
percent to US$129.5 per carat. Instead,
the Gokhran reportedly bought diamonds
from OJSC Nizhne-Lenskoye and OJSC
Uralmaz, neither of which is a member of
the Alrosa group.
The Gokhran can spend up to 9.95
billion rubles (US$309.8 million) on precious
metals and gemstones this year, compared
with a budget of 10.45 billion rubles
(US$325.4 million) in 2011, notes Interfax.
Report: Mbada Diamonds Injects $300 Million
into National Coffers
Marange diamond miner Mbada Diamonds has contributed approximately
US$300 million in revenue to the Zimbabwe government over the past two years,
according to Mbada Chairman, Dr. Robert Mhlanga.
Recently appearing before the government’s Portfolio Committee on Mines
and Energy, Mhlanga said his company had earned a total of US$592.5 million
since commencing operations in 2009,
reports the state-run Herald. He said
of that amount, US$76.2 million had
been paid to government as royalties,
US$33.9 million for resource depletion,
and US$5.96 million had been paid
as marketing fees, according to the
news source. He added that a further
US$117.2 million had been paid to
government as dividend, US$42.5
million as corporate tax and US$17.8
million had been paid as withholding
Robert
Mhlanga
tax.
“In total we have paid a total of
US$293,549,914 to Government and this constitute nearly 50 percent of the gross we
generate with 26 percent going to working capital while 24 percent went to the other
shareholder (Reclamation),” Mhlanga said, as quoted by the Herald. He added that
the company’s accounts are audited by KPMG.
During his presentation, he reportedly raised the issue that U.S. and EU sanctions
against the diamond mining companies operating in Chiadzwa were hindering them
from competing on a level playing field.
A Second Chinese Firm May Start Mining
Marange Diamonds
Another Chinese firm may soon join Anjin in its diamond mining
operations in Zimbabwe’s Marange diamond area. As part of
its diversification strategy, China-based Tiens, an international
company involved in marketing Chinese traditional medicines
and supplemental health food products, is planning to send a
special delegation to Zimbabwe to meet with President Mugabe and
to formalize plans to venture into diamond and platinum mining, reports
the state-run Herald.
Speaking shortly after his arrival at Harare International Airport last week,
Tien President Kevin Hou confirmed that in the following month a special
delegation from Tiens headquarters will meet Zimbabwe government
officials over their proposal, reports the news source, which adds that
the Tien president was welcomed by Zanu-PF Politburo member Cde
Kumbirai Kangai and his wife.
“We are hoping to co-operate with Zimbabwe companies in this
huge business plan. Zimbabwe has vast business opportunities and a
good market hence we are looking forward to expand our activities in
this country,” Hou said, as quoted by the Herald.
Country manager Lei Li said there are about 100,000 Tiens distributors
currently in Zimbabwe.
ANGOLA
Alrosa Mulls
Rough Supply
to Gokhran in 2012
ZIMBABWE
RUSSIA
4 CORNERS OF THE GLOBE
KP Chairwoman
Visits Angola
The Chairwoman of the Kimberley
Process Certification Scheme (KPCS), U.S.
Ambassador Gillian Milovanovic, was in
Angola last week for a two-day working
visit, reports the Angola Press. Citing a statement
released by the U.S. embassy in Angola, the
press service notes that the main purpose of
the ambassador’s visit was to meet with local
authorities interested in diamond mining.
During her visit, the KPCS Chair was to hold talks
with Angolan officials of the Ministries of Foreign
Affairs and Geology, Mining and Industry, as well as
with representatives of the state-owned diamond
company Endiama and the African Diamond
Producers Association (ADPA), to discuss the KPCSrelated issues, reports the Angola Press. This was
the ambassador’s first visit to Angola since her
appointment as chair of the KPCS in 2012.
DIAMOND INTELLIGENCE BRIEFS 7299
10 Illegal Diggers Killed
in South African Diamond Mine
Search and rescue teams have recovered the bodies of 10 illegal diamond
diggers who were killed last week in a collapsed tunnel at De Beers’ deserted
Namaqualand diamond mines in South Africa’s Northern Cape Province,
according to media reports.
While 11 diggers escaped from the collapsing tunnels last Tuesday, May
22, and one survivor was rescued, De Beers believes that an additional 11
diggers remain trapped in what it calls the “illicit diamond digging operation”
at Bontekoe, the site which forms part of the illegally excavated tunnels.
Rescue Efforts
De Beers Consolidated Mines (DBCM) officials and representatives from its mining
and support team have been at the site of the accident since last Tuesday as part of
the rescue team, which also includes Proto Teams and
the South African Police Services Disaster Recovery
Phillip
Barton
Unit. According to DBCM, three of the 11 diggers who
had escaped harm returned to the site to assist the
recovery team to try and map where the tunnels and
trapped diggers might be. The rescue team has also
deployed a Trapped Persons Location Device above
grown and in the collapsed tunnels where people
may be trapped.
“We express our condolences to the relatives of
the deceased recovered from the Bontekoe site.
We continue to have one priority and it remains
single-mindedly to search for survivors and enable the safe recovery of all trapped
diggers,” said Phillip Barton, DBCM Chief Executive Officer, in a statement released
over the weekend. “We will continue to deploy our Company resources at the site
until the tunnels are found and safely cleared in the coordinated effort to, hopefully,
recover any survivors still trapped at the site.”
Barton added: “Our mission is to safely find any survivors of the collapse. We are
focused on a human tragedy not on other matters. We again urge, personally, all
those directing, encouraging and participating in illegal mining to put safety first and
to cease their activities and to cooperate with the authorities in the region before
another person is injured of loses their life.”
Namaqualand
DBCM stopped operations in Namaqualand around three years ago pending the
mines’ sale to fellow miner Trans Hex, which signed a US$27 million (225 million rand)
acquisition deal last year. The miner reportedly closed down access to the mines in
April when it discovered illegal miners from the area had started work in the tunnels.
Namaqualand Mines in South
Africa's Northern Cape Province
INDIA
SOUTH AFRICA
4 CORNERS OF THE GLOBE
SDA Calls on Indian
Institutes to Offer
Diamond, Jewelry
Courses
India’s Surat Diamond Association
(SDA) is proposing that state-run industrial
training institutes (ITIs) as well as other
universities associated with the diamond
industry start offering diamond polishing
and jewelry manufacturing courses to help
fill the vacuum of skilled manpower trained
in modern technology used in the trade.
According to the Business Standard,
in coming years, an estimated one million
trained workers will be required for
India’s domestic diamond and
jewelry manufacturing needs.
“About 20 per cent of the
workforce migrated during the
slowdown in 2008, of which only
10 per cent are back. So there
is already a deficit. Plus there
is only one institute, the Indian
Diamond Institute, (IDI) which
provides training of using modern
technology in diamond polishing,”
SDA President Dinesh Navadia said, as
quoted by the news source.
Citing the big gap in supply and
demand of workers trained in modern
technology of diamond polishing and
jewelry fabrication, former SDA President
Rohit Mehta estimates that the industry
needs at least 200,000 trained workers
every year.
“It is estimated that we require 10 lakh
[1 million] workers in jewellery fabrication
units in the next couple of years. The GJEPC
and other jewellery associations believe
that full-time courses in jewellery should
be introduced by universities. We need
many more institutes like IDI to impart
education and degree courses in the
gem and jewellery field,” Chandrakant
Sanghvi, regional Chairman of the Gems
and Jewellery Export Promotion Council
(GJEPC) and President of the Gujarat Hira
Bourse, told Business Standard.
DIAMOND INTELLIGENCE BRIEFS 7300
Element Six
Announces Its First U.S.
Synthetic Diamond
Manufacturing Facility
in Silicon Valley
Synthetic diamond supermaterials company Element Six
reports that it is opening its first U.S.
manufacturing facility in Silicon
Valley. The facility will house employees
in the production, technical and customer
service fields, and will serve to establish
a direct connection to Element Six Technologies Division’s customers and partners
in the U.S.
The company, part of the De Beers
Family of Companies and co-owned by
Belgian materials group Umicore, says
that its continued expansion into the
U.S. market is in direct response to the
growing demand and interest in synthetic
diamonds for commercial use in advanced
technology applications.
“As the pioneers of the commercial CVD
diamond markets, we have the technical
excellence, capabilities and track record
to develop entirely new applications
for synthetic diamond,” says Cyrus Jilla,
Element Six Chief Executive Officer. “With
our new Santa Clara facility, we will build
on our 25% year on year growth, and
deliver innovative products which enhance
productivity, reduce energy consumption
and lower operational costs.”
The company has also recently
announced the construction of a US$32
million synthetic diamond supermaterials
research and development facility in
Oxford in the UK. To read more details of
this UK facility, click here:
http://tinyurl.com/cyfd4fq
INDIA
UNITED STATES
4 CORNERS OF THE GLOBE
Former Botswana President Joins Shrenuj Board
Integrated diamond firm Shrenuj & Company Limited reports that Festus G.
Mogae, former President of the Republic of Botswana, has joined the company’s
Board of Directors as an independent director.
Mogae, who worked at the International Monetary Fund and the Bank of Botswana
before serving as the country’s Vice-President from 1992 to 1998, rose to the post of
President in 1998 and served two full terms of presidency, the maximum allowed by
the constitution of Botswana, till 2008. Mogae currently serves as Special Envoy of
the United Nations Secretary-General on Climate Change. In 2010, he also joined the
Advisory Board of U.S. Nonprofit TeachAIDS.
Among his other internationally recognized achievements, Mogae was awarded
the Grand Cross of the Légion d’honneur by former French President Nicolas Sarkozy
in 2008 for his “exemplary leadership” in making Botswana a “model” of democracy
and good governance.
Festus
“Mr. Mogae brings a great wealth of
Mogae
knowledge in areas including finance,
economics, corporate governance, and
leadership. He has been an exceptional
role model in leadership and has in-depth
understanding of diamond-economics,”
says Shreyas Doshi, Chairman and
Managing Director of Shrenuj & Co.
“A significant part of our growth is
expected from diamond producing
countries. We have fairly large manufacturing operations in Botswana and South Africa. The insight of Mr. Mogae into
these producing centers will help us achieve our ambitious targets,” adds Doshi.
Financial Results
In other company news, the integrated gem and jewelry manufacturer and retailer
has recorded a 28 percent increase in revenue for fiscal 2011-2012 to US$560.3 million
(INR 31.5 billion). The DTC sightholder’s profit for the year, totaling US$12.5 million (INR
703.4 million), also showed a double-digit growth of 24 percent.
During the year, Shrenuj commissioned a jewelry-manufacturing unit in Botswana
and a diamond-polishing unit in South Africa. It also proposes to augment its diamond
polishing manufacturing by commissioning another large-scale factory in India later
this year.
The company reports that it secured a “significantly large” supply contract for
2012-15 from the DTC London and DTC Botswana.
“We are pleased with the performance of the company, especially since the
year 2011-12 was particularly challenging. The input prices of raw material, [namely]
diamonds and gold were on the rise. The economic uncertainty added to lowered sales
revenues in Euro zone. The rise in US demand was compensated by slightly subdued
growth rates in China. In this scenario, our focus was on preventing credit risk while
sustaining growth,” says company Chairman and Managing Director Shreyas Doshi.
Continues Doshi: “The rise in revenue is a result of further broad-basing our customer
base and extending our footprint to new markets. This is a long-term strategy and we
will see its impact on our bottomline in the coming four to five years. The fact that we
have been able to protect our margins despite a falling rupee is evidence that our
systems and operational efficiencies have improved during the year.”
Synthetic Diamond in semiconductors provides superior thermal management of
high power devices; lowering device operating temperatures resulting in system
size reduction and improved reliability (Photo: Business Wire)
DIAMOND INTELLIGENCE BRIEFS 7301
DIGGING THE DIRT
Alrosa’s 2011 Diamond Sales
Grow 24% in Value
Russian mining conglomerate Alrosa reports that
it produced 34.6 million carats in 2011, up 1 percent
from the 34.3 million carats produced in 2010.
Total revenue for the year grew 21 percent
to US$4.4 billion (137.7 billion rubles), which the
Yakutia-based miner attributes to “solid” diamond
sales and strong prices. Net profit for Alrosa more
than doubled in 2011 to US$853.9 million (26.7
billion rubles).
Alrosa’s debt declined 6 percent to US$3 billion
(95.5 billion rubles).
Diamond Sales
In 2011, Alrosa sold 32.9 million carats, down
17 percent in volume from 39.5 million carats sold
in 2010, when the miner says it sold diamonds
from inventories accumulated in 2009. Despite the
decrease in sales volume, a continuous increase in
diamond prices drove Alrosa’s diamond revenue
for 2011 up 24 percent in value to US$4 billion (125.3
billion rubles). According to Alrosa, the average
diamond price per carat increased 53 percent
year over year to US$129.5 per carat in 2011.
Alrosa reports that in 2011, prices for its gemquality diamonds reached US$196.9 per carat, up
60 percent from US$123.3 per carat in 2010. The
price per carat for non-gem-quality diamonds also
rose 60 percent year over year, from US$4.8 per
carat in 2010 to US$7.7 per carat in 2011.
2011
The miner says that 2011 was characterized
by strong demand in the first nine months and
a period of lower demand in 4Q. “To sustain
average selling prices in 4Q 2011, Alrosa reduced
auction sales and offered diamonds of better
quality to its clients under long-term agreements.
These measures resulted in an increase in Alrosa’s
average selling prices in 4Q 2011 and helped to
partially compensate for lower sales volumes,”
explains the miner in its 2011 financial results.
Q1 2012
In a recently published statement summarizing
a meeting of its Executive Committee, which met
on May 25, Alrosa reports that it produced 8.1 million
carats during the first quarter of 2012, down 19
percent year over year from the 10 million carats
produced in the first quarter of 2011.
DIAMOND INTELLIGENCE BRIEFS 7302
DIGGING THE DIRT
Rockwell Completes Two Strategic Projects at Saxendrift
the technology will be incorporated into
the mines which we are planning to build
at our Middle Orange River projects to
grow our production profile.”
Bulk X-Ray System
South Africa's Saxendrift Mine
Rockwell Diamonds Inc. has
completed two strategic projects at its
Saxendrift mine in South Africa’s Northern
Cape Province. The new in-field screen
and the bulk x-ray and single particle
sorter plant were the first capital projects
approved by Rockwell’s board for
implementation by the company’s new
management team.
In-Field Screen
The new in-field screen was
commissioned to address the high
sand content in the gravel that was
impacting the mine’s ability to achieve
its productions targets.
The new 3.0m x 8.0m Dabmar Bivitec
screen is designed to treat gravels with
a high sand and moisture content at the
required processing rates. The project,
which included a magnetic scalping
plant, came in under budget and has
been delivering the anticipated benefits
for the past four months, notes Rockwell.
The screen is running in excess of 95
percent efficiency notwithstanding the
fact that it is operating at 17 percent
above its design throughput.
“Another meaningful positive impact
of the new in-field screen is enhanced
pan plant efficiency. This is due to the
higher quality gravels, cleared of excess
sand and small particles being fed into
the plant,” explains James Campbell,
Rockwell Chief Executive Officer. “We
are now also in a position to consider
mining certain blocks that have a higher
sand content, that could previously not
be processed and have the potential to
increase the life of mine at Saxendrift.”
Campbell adds that: “The new in-field
screen, along with contops and a change
in the bottom cut-off has enabled us to
increase our monthly volume throughput
by over 30% whilst maintaining our
operating costs at the same level as a year
ago… Based on the results of this project,
The commissioning of the bulk x-ray
technology that was approved by the
Board in September 2011 was completed
to scope and on budget in mid April 2012
with very encouraging results so far. This
strategic initiative is based on a high
throughput Bourevestnik (BV) sorter and
one BV single particle sorter and is aimed
at improving concentrate efficiency and
final sorting of diamond-bearing ore with
a total capital cost of $1.5 million, reports
Rockwell. Having started processing old
recovery tailings at Saxendrift in April,
316 stones totaling 1,109 carats have
been recovered in the first four weeks
of production. This includes 14 stones
exceeding 10 carats with the largest
weighing 52.67 carats.
This project has been viewed as a
“Proof of Concept” test plan, which, if
successful, could be applied to Rockwell’s
other, as yet undeveloped, Middle
Orange properties, says the miner.
The project program includes
sampling of recovery and pan plant
tailings. Once complete, the 100 tonnes
per hour plant will be used to bulk sample
the gravels from the Jasper Mine, subject
to the acquisition proceeding as planned.
Saxendrift In-Field Screen
DIAMOND INTELLIGENCE BRIEFS 7303
DIGGING THE DIRT
RioZim in Talks with
Rio Tinto for Full Control of
Murowa Diamond Mine
Independent Zimbabwean owned and
listed miner RioZim Limited has engaged
Rio Tinto in talks to take full control of the
Murowa diamond mine in South Central
Zimbabwe following the global miner’s
intention to leave the diamond business,
reports Reuters, citing a key shareholder
in RioZim.
Currently, Rio Tinto holds a 78 percent
stake in Murowa, which produced 367,000
carats in 2011, while RioZim controls 22
percent of the mine. RioZim was created in
2004 when Rio Tinto largely left Zimbabwe
while retaining its diamond interest.
“We’re now in discussions with Rio Tinto
Plc to acquire the 78 percent of Murowa
that they want to offload,” reports Reuters,
quoting Harpal Randhawa, whose private
equity group Global Emerging Markets
(GEM) recently bought 25 percent of the
Zimbabwean firm.
Rio Tinto announced in March its
intention to leave the diamond industry,
effectively inviting bids for its diamond
operations, including the Argyle mine in
Australia and its 60 percent share in the
Diavik mine in Canada.
Randhawa, who said only time would
tell if his group’s decision to invest in
RioZim was “either brave or stupid,” said
the firm was compliant with Zimbabwe’s
empowerment law as it was 54 percent
controlled by locals, according to Reuters.
Under Zimbabwe’s current indeginization law, the government seeks to transfer
at least 51 percent shareholding in foreign
firms, including mines and banks, to locals.
According to the news source, RioZim,
which is battling to clear a US$50 million
debt owed to local banks, badly needs to
recapitalize its gold mines and develop its
substantial coal and chrome concessions.
Murowa Processing
Aerial View of Ekati’s Koala Pit
Report: KKR No Longer Interested in Ekati Sale
KKR & Co. L.P. has backed away from the sale of BHP Billiton’s Ekati diamond mine
in Canada’s Northwest Territories, the Financial Times reports, citing unnamed sources.
The New York-based private equity house was initially named as a potential bidder
for the mine back in March, following BHP Billiton’s November announcement that it
was reviewing its diamonds business and its future in it. The sale of the Ekati mine, which
industry participants say is worth between US$750 million and US$1.2 billion, had also
attracted initial interest from private equity firm Apollo Global Management, among
others, according to the Financial Times.
While KKR could still renew its interest in Ekati, the firm’s turnaround raises questions
about demand for such assets, the newspaper reports. Meanwhile, Rio Tinto, who
announced a similar strategic review of its diamond business in March, has appointed
Morgan Stanley to assess options for its diamond mines in Australia, Canada and Zimbabwe,
which, all together, could be worth as much as US$2 billion, writes the Financial Times.
BHP Billiton has maintained that it could hold on to Ekati, though the auction is still
ongoing. The news report also notes that sources have observed in recent days an
interest from De Beers in buying the mine despite concerns of potential antitrust issues.
While BHP Billiton still holds an 80 percent interest in Ekati, in early February, it
completed the sale of its 51 percent interest in the Chidliak diamond exploration
project in Canada’s Nunavut province to project operator Peregrine Diamonds Ltd.
Afri-Can Completes Geophysical Survey
on EPL 3403 Marine Diamond Concession
Afri-Can Marine Minerals Corporation reports that it has completed its geophysical
survey on Exclusive Prospecting License (EPL) 3403 marine diamond concession in
Namibia.
According to the Canadian diamond exploration company, the geophysical
survey covered 1,251 line-kilometers over an area of 90 square kilometers in the
south end of EPL 3403. The survey also included Depositional Areas 1, 2 and 3 already
delineated by previous sampling programs.
The survey data were “consistently of very high resolution and quality” and will
enable Afri-Can to develop cross-section maps and three-dimensional models of
the Depositional Areas. The geology, morphology and stratigraphy of the south end
of EPL 3403 will be analyzed in preparation for the second sampling phase, notes
the company. The goal of the geophysical survey and second sampling
phase is to start delineating resources on Depositional Areas 1 and 2 in
anticipation of trial mining.
EPL 3403 covers approximately 800 square kilometers and is adjacent to
and contiguous with Namdeb’s Atlantic One Mining Lease (ML) 47, which
currently produces in excess of 1,100,000 carats per year.
DIAMOND INTELLIGENCE BRIEFS 7304
DIGGING THE DIRT
Mountain Province Diamonds
Approves C$31.3M Initial Gahcho Kué
Capital Program
Mountain Province Diamonds Inc. and its Gahcho Kué Joint
Venture partner, De Beers Canada Inc., have approved the
initial capital to advance the Gahcho Kué diamond mine at
Kennady Lake in Canada’s Northwest Territories in preparation
for development.
The US$30.5 million (C$31.3 million) budget [US$20.8 million
(C$21.3 million) for 2012 and US$9.8 million (C$10 million) for
Q1, 2013] will focus on advancing: preparation work for the
construction and operating permit applications; front-end
engineering and design (FEED); preparations and procurement
for the 2013 winter road; detailed engineering; purchase of
critical long-lead equipment; and the feasibility study update.
The Gahcho Kué Project consists of a cluster of four
diamondiferous kimberlites, three of which have a probable
mineral reserve of 31.3 million tonnes grading 1.57 carats per
tonne for total diamond content of 49 million carats.
In related news, the technical sessions of the Environmental
Impact Review (EIR), which were intended to resolve as many
technical issues as possible prior to the public hearings, took place
in Yellowknife from May 22 to May 25, 2012, and concluded
successfully, reports the miner. The EIR continues to progress in
accordance with the work plan established by the Mackenzie
Valley Environmental Impact Review Board (MVEIRB) with the
closure of the public record under the EIR expected prior to
the end of 2012.
Additionally, Mountain Province Diamonds reports that an
updated independent valuation of the diamonds recovered
from the Gahcho Kué project, conducted by WWW International
Diamonds Consultants Ltd. and based on the WWW Price Book
as of March 7, 2012, indicates that the valuation of the Gahcho
Kué diamonds increased marginally from April 2011 to March
2012 with the actual value per carat increasing by approximately
1 percent from US$185 to US$186. The modeled values also
remained essentially unchanged.
Mountain Province, which holds a 49 percent share in Gahcho
Kué, also controls 100% of the Kennady North Diamond Project
comprising thirteen leases and claims immediately to adjacent
to the De Beers JV property.
Gahcho
Kue
aerial
view
Kao Project in Phase 1 Production
Namakwa Diamonds’ First Auction
of Kao Diamonds Nets $6.47 Million
in Revenue
Namakwa Diamonds Ltd’s first sale of diamonds from the Kao
diamond mine in Lesotho realized revenues of US$6.47 million,
with achieved prices 17 percent higher than initial estimates. The
recent auction took place in Antwerp through Fusion Alternatives,
tender partner of I Hennig & Co. According to Namakwa, sales
will continue through Fusion Alternatives for at least the next
six months.
During the auction, 16,388 carats were sold at an average
selling price of US$395 per carat, with an average diamond size
of 0.36 carats. The largest diamond sold was 38 carats at US$6,668
per carat, with an 11-carat diamond selling for US$15,020 per
carat and four diamonds with sizes varying between 6 and 14
carats selling for an average of US$7,100 per carat.
The diamonds sold were sourced predominately from the
mine’s hardrock kimberlite ores. Namakwa Diamonds holds a
62.5 percent interest in Kao, with the government of Lesotho and
Kimberlite Investments Lesotho Limited holding the remaining
25 percent and 12.5 percent, respectively.
“We are delighted with the outcome of our first tender sale
in Antwerp of [Kao mine operator] Storm Mountain Diamonds’
production from the Kao Mine. Achieved prices were 17%
higher than anticipated resulting in an additional US$1m in sales
income. The significant improvement in achieved price reflects
both the increased parcel size on comparative diamond sales
in Johannesburg, as production ramps-up at the Kao Mine,
and the international exposure provided by our tender partner,
Fusion Alternatives. We look forward to regular monthly sales
in Antwerp for the foreseeable future,” says Richard Collocott,
Chief Executive Officer of Namakwa Diamonds.
Since January 2012, Namakwa has sold 49,771 carats from
the Kao mine, achieving US$13.76 million in revenue.
DIAMOND INTELLIGENCE BRIEFS 7305
BRIEFLY NOTED
Gem-A to Hold International Gemmology
Conference in November 2012
The Gemmological Association of Great Britain (Gem-A) has announced that it is
holding an international gemological conference in London scheduled for November
3-5, 2012.
The conference, to take place in the Hotel Russell, Bloomsbury, aims to bring together
a range of globally renowned speakers and international delegates to discuss a variety
of relevant issues pertaining to the international gem and jewelry trade.
According to Gem-A, this year’s speakers include:
• Dr. Hanco Zwaan from the Netherlands Gemmological Laboratory, who will talk about
new sources of emeralds from Brazil.
• Thomas Hainschwang from GEMLAB, Liechtenstein, who will cover the challenge of
identifying recent generations of melee-sized synthetic diamonds.
• Bear Williams of Stone Group Laboratories, USA, who will give a report on advanced
instruments for the smaller labs.
• Lore Kiefert from Gübelin Gem Lab, Switzerland, who will focus on gems from Guinea,
Sierra Leone, and Liberia.
• Also speaking are Richard Hughes, author of Ruby & Sapphire, Joanna Whalley from
the Victoria & Albert Museum, and Jerry Sisk from JTV, Jewelry Television.
Seminars and talks have been arranged for Saturday, November 3rd and Monday,
November 5th to coincide with the conference. Tuesday, November 6th will be dedicated
to visits to the Crown Jewels and the Natural History Museum in London.
NY Giants Unveil Tiffany &Co.-Designed
Super Bowl Ring
Professional American football team the New York Giants recently unveiled their
commemorative championship ring for winning Super Bowl XLVI at Tiffany & Co.’s
flagship store in New York. The white gold ring was designed by Tiffany & Co. with input
from the team’s ownership, General Manager Jerry Reese, Coach Tom Coughlin and
players – notably captains Eli Manning, Justin Tuck and Zak DeOssie.
“We feel especially honored to craft the trophy and commemorative rings for Super
Bowl XLVI, because both are in celebration of our own New York Giants, who gave us
yet another performance on the field that no Giants fan will ever forget,” said Michael
J. Kowalski, chairman and CEO of Tiffany & Co.
The top of the ring is covered in round brilliant diamonds that are
pave set. There are also four Vince Lombardi trophies on the ring top,
commemorating the four Giants’ Super Bowl wins, and each set with
a marquis diamond representing the football. The trophies surround
the Giants’ iconic NY logo, which is set with round brilliant diamonds
on an outline of blue enamel. The top of the ring also includes 37 blue
sapphires channel set on the outer bezel. The text around the bezel reads
“2011 World Champions New York Giants.” The team’s 2007 ring was white
gold and featured diamonds without additional color.
The rings shank tells the story of this season’s championship team and honors The
Giants legacy. One shank of the ring has the Giants logo, the Lombardi Trophy, the NFL
shield, the words “Super Bowl XLVI” and the final score – NYG 21 NE 17. The opposite
shank has the recipient’s name, the Giants circular logo with the player’s number in
the center and EST. 1925 (the year the franchise was founded). The lower palm side of
shanks list the four seasons the Giants won the Super Bowl: 1986, 1990, 2007 and 2011.
Additionally, engraved inside the ring are the words “Finish” and “All In” two phrases
that reportedly rallied the Giants throughout the 2011 season.
DEF Gala to Salute
Global Success
of Botswana’s Diamond
Industry
The Africa-focused Diamond Empowerment Fund (DEF) and the embassy of
the Republic of Botswana have invited
international diamond industry leaders,
government officials, and business
executives to attend a special VIP blacktie event to celebrate the global success
of the diamond industry in Botswana. The
event, titled The Gala Salute to Botswana:
“Diamonds Empower Africa,” is scheduled
for June 5, 2012, at the Botswana embassy
in Washington, DC, and will take place
during the Kimberley Process Certification
Scheme’s intersessional meeting.
“We are pleased to recognize the
outstanding progress and sustainable
impact that the diamond industry
continues to have on the people and
economy of Botswana as a global model
of good corporate social responsibility,”
says Phyllis Bergman, DEF President.
During the evening, there will be a live
auction for a six-night safari adventure
for two, donated by Wilderness Safaris in
Botswana, including an exclusive day tour
of Diamond Trading Company Botswana’s
facility in Gaborone. In addition, Debswana
will arrange for a private tour of its Jwaneng
mine, the world’s richest diamond mine
by value.
Presenting sponsor for the Gala Salute
to Botswana is Tiffany & Co. Support
sponsors include Exelco Group, Julius
Klein Group, and Leo Schachter Diamonds.
DEF’s mission is to develop the
next generation of leaders in Africa
by supporting education initiatives in
diamond-producing nations.
DIAMOND INTELLIGENCE BRIEFS 7306
OFF THE SHELF
Signet Jewelers Posts
1.4% Growth in Q1 Sales
Signet Jewelers Limited reports that
sales for the first quarter, ended April 28,
2012, grew 1.4 percent to US$900 million,
compared to US$887.3 million recorded
a year ago.
Total sales in the specialty jewelry
retailer’s U.S. division, where it operates
under the brands Kay Jewelers and Jared
The Galleria of Jewelry as well as other
regional brands, came to US$751.5 million,
up 1.8 percent, compared to US$738 million
in the same quarter a year ago.
Meanwhile, Signet Jewelers reports
that total sales in its UK division, where it
operates under the brands H. Samuel and
Ernest Jones, were US$148.5 million, down
0.5 percent versus the US$149.3 million
recorded a year ago.
The company’s income before taxes
totaled US$128.5 million, a 9.1 percent
rise year over year, while its net income
for the 13-week period grew 9.4 percent
to US$82.5 million.
BIDZ.com, Inc. Signs
Going Private Merger
Agreement
Bidz.com Inc., an online jewelry retailer
has entered into a definitive merger
agreement with Glendon Group, Inc. to
be acquired for $0.78 per share in cash.
The proposed transaction is expected
to close in the fourth quarter of 2012, and
is subject to certain closing conditions
specified in the merger agreement.
Glendon Group has obtained equity
financing commitments in an aggregate
amount sufficient to complete the merger.
There is no financing condition to Glendon
Group’s obligation to complete the merger.
Following completion of the transaction, Bidz.com, which offers its
products through a live auction format
as well as a fixed price online retail
store, Buyz.com, would become a
privately held company and its stock
would no longer trade on the Nasdaq
Capital Market.
Christie’s Magnificent Jewels Brings in $72.3 Million
Christie’s Magnificent Jewels sale, held earlier this month in Geneva, brought in
US$72.3 million with an 84 percent sell-through rate by lot and 86 percent sell-through
rate by value. The auction’s top lot was an antique Indian emerald, diamond and
enamel 18th century sarpech, which sold for US$4.7 million, setting a world record price
for an Indian sarpech at auction.
The auction’s second-highest earner was a pair of pear-shaped
D, VVS2, potentially IF diamond ear pendants of 16.21 and
15.67 carats by Harry Winston, which sold for US$4 million,
or US$127,500 per carat. The sale’s third-highest earner,
an octagonal-cut Burmese sapphire brooch of 47.15
carats by Mellerio, sold for US$3.6 million, or US$77,500
per carat, achieving a record price per carat for a
This 32.08-carat cushionBurmese sapphire at auction.
shaped Burmese ruby
and diamond ring by
The Magnificent Jewels sales results combined with the
Chaumet, renamed “The
May 14th charity auction, the Jewels for Hope: The Collection
Hope Ruby,” sold at the
“Jewels for Hope: The
of Mrs. Lily Safra, totaled US$110.2 million, the highest result
Collection of Mrs. Lily
Safra” charity auction
for a series of jewelry auctions at Christie’s Geneva.
for US$6.7 million, setting
“From the ‘Hope Ruby’, which sold for a record US$6.5m
a new world record
price for any ruby sold
from the collection of Mrs. Lily Safra to an Indian emerald
at auction.
sarpech which achieved a sensational price after a 10 minute
bidding-war in the saleroom between two determined bidders, jewellery buyers from
all over the world showed great depth as they bid at the highest levels for every rare
jewel and gem offered,” says Rahul Kadakia, Head of Christie’s Geneva and New
York Jewellery Departments.
For more details of the auctions’ results, click here: http://tinyurl.com/8x4ed96
Richemont’s Jewelry Sales Rise 32%
Swiss luxury goods group Richemont reports that its jewelry sales increased 32
percent to US$5.9 billion (€4.6 billion) for the fiscal year ended March 31, 2012.
Both brands comprising its Jewelry Maisons, Cartier and Van Cleef & Arpels, performed
“exceptionally well” and reported high growth across product categories and channels.
“Demand for High Jewellery pieces was solid and more accessible jewellery ranges
enjoyed very strong demand. Cartier’s watch collections, including premium and
technical pieces, were equally successful,” reports Richemont in its fiscal report for
the 12-month period.
Sales for the group’s Specialist Watchmakers Maison increased 31 percent during
the fiscal year to US$2.97 billion (€2.3 billion)
Richemont’s total global sales for the 12-month period grew 29 percent to
US$11.3 billion (€8.9 billion). According to Richemont, the growth in sales reflected the
continuing demand for established product lines,
the successful introduction of new products
and the impact of boutique openings. By
region, Asia-Pacific recorded the highest
sales growth for the fiscal year (43 percent)
following by Americas (26 percent), Europe
(20 percent) and Japan (13 percent).
Richemont’s profit for the fiscal year
grew 43 percent to US$1.97 billion (€1.5
billion).
DIAMOND INTELLIGENCE BRIEFS 7307
OFF THE SHELF
Rio Tinto Finds Strong Potential for New
Diamond Jewelry Niche in China
Rio Tinto reports that new market research confirms the
growing trend towards diamond fashion jewelry in China. Global
market research company Ipsos was commissioned by Rio Tinto
to help them further understand consumer perceptions in China
regarding fashion jewelry (i.e., jewelry pieces comprising small,
affordable diamonds).
Findings
•
•
•
•
Of particular note were the following findings:
Chinese consumers no longer see diamonds as purely a
store of wealth or bridal purchase.
Diamond fashion jewelry is desirable and part of a broader
trend in China towards “affordable luxury.”
Diamond fashion jewelry is attractive as a versatile accessory
for everyday wear.
Design is critical to the Chinese consumer when purchasing
fashion jewelry.
Rio Tinto says that these insights challenge the conventional
wisdom that Chinese consumers only appreciate large, highquality white diamonds or gold jewelry.
According to PLDG Creative Intelligence,
an independent global jewelry trend
and forecasting company, this trend in
China is consistent with other key jewelry
markets where, “diamond jewellery
consumers increasingly want affordability,
beautiful designs and to feel unique. As a
result international brands and designers
Jean-Marc
are using small diamonds for innovative
Lieberherr
designs, not tied to the bridal market.”
China Expansion
Notes Jean-Marc Lieberherr, General Manager for the sales
and marketing of Rio Tinto Diamonds: “These are important findings
for Rio Tinto as we are accelerating our marketing investment
in the Chinese diamond jewellery market. It is also good news
for diamond manufacturers, jewellery designers, retailers and
consumers.”
With growth in China expected to change the face of the
diamond jewelry market, Rio Tinto has partnered with leading
diamond jewelry manufacturer and retailer Chow Tai Fook,
promoting diamonds as fashion accessories in imaginatively
designed jewelry.
Tiffany & Co.’s Worldwide Sales
Rise 8% in Q1
Tiffany & Company has recorded an 8 percent growth in
worldwide net sales to US$819 million for the first quarter ended
April 30, 2012. Net earnings rose 1 percent to US$82 million.
Sales by Region
Sales in the Americas, which represent slightly less than half
of worldwide sales, rose 3 percent to US$386 million. Combined
Internet and catalog sales in the Americas increased 1 percent.
Sales in the Asia-Pacific region increased 17 percent to US$195
million. In Japan, sales rose 15 percent to US$142 million while
sales in Europe increased 3 percent to US$88 million.
Meanwhile, Tiffany reports that its other sales declined 14
percent to US$9 million due to lower wholesale sales of finished
products to independent distributors.
The high-end jewelry retailer opened four stores during the
first quarter: in Mexico City, Montreal, Salt Lake City and Wuhan,
China. As of April 30, 2012, Tiffany & Co. operated 251 stores (105
in the Americas, 59 in Asia-Pacific, 55 in Japan and 32 in Europe),
compared with 232 stores (96 in the Americas, 52 in Asia-Pacific,
55 in Japan and 29 in Europe) a year ago.
“In terms of our sales for the first quarter, regions outside the
Americas performed generally as expected. However, the Americas
region underperformed, continuing a soft trend that began in the
last quarter of 2011 and compounded by the difficult comparison
to substantial sales growth in last year’s first quarter. These sales
results led to net earnings modestly trailing our expectations,”
says Michael J. Kowalski, chairman and chief executive officer.
Outlook
“We are updating our forecast for the full year to reflect these
first quarter results and to reflect lower near-term expectations.
Although we are very early into the second quarter, worldwide
sales are currently increasing by a low-single-digit percentage,
reflecting difficult year-over-year comparisons and decelerating
rates of economic growth in many countries,” adds Kowalski.
In its updated management outlook for the full year ending
January 31, 2013, the company expects worldwide net sales to
increase 7-8%, versus the previous expectation calling for 10%
growth.
In other company news, Tiffany & Co.’s Board of Directors has
appointed Andrew W. Hart to the newly created position of Senior
Vice President - Diamonds and Gemstones. Hart joined Tiffany in
1999 and, since 2002, has been Vice President - Diamonds and
Gemstones. Hart will continue to report to James N. Fernandez,
executive vice president and chief operating officer.
Additionally, Tiffany’s stockholders have appointed Robert
Singer to its Board of Directors. He will chair the board’s audit
committee and replaces Thomas Presby, who has retired.
Singer’s appointment brings Tiffany’s board’s total to nine.
DIAMOND INTELLIGENCE BRIEFS 7308
OFF THE SHELF
Hearts On Fire Diamonds Releases New
APP for iPhone and iPad
Hearts On Fire has released a new app for the iPhone and
iPad that allows consumers to both browse the entire Hearts
On Fire jewelry collection as well as view four new brand videos
that help buyers understand the difference and value of the
brand’s diamonds.
According to the diamond-jewelry retailer, the catalog
portion of the app gives consumers the opportunity to sort by
categories such as diamond engagement rings, diamond earrings,
and diamond pendants. When browsing through the catalog,
once a design is chosen, a larger jewelry image, product details,
and pricing then become available.
In addition to the product catalog, there is a never-beforeseen tour of the Hearts On Fire Diamond cutting factory.
“Hearts On Fire knows that today’s consumer needs to access
information whenever and wherever they need it. Allowing our
customers the ability to easily see brand and product information
on their iPhones and iPads will enhance their research and
shopping process,” says Caryl Capeci, VP Marketing Hearts On Fire.
Users have the ability to purchase any of the designs on the
app by contacting the Perfection Stylist team.
To download the app for free, visit: http://www.heartsonfire.
com/app.
The Hearts On Fire diamonds are sold in 650 retailers spanning
34 countries and in 14 HOF stores globally, as well as via the internet.
Beau Sancy
Sotheby’s Earns $9.7 Million
for ‘Beau Sancy’
Sotheby’s Geneva earned US$89.6 million from its recent
Magnificent Jewels and Noble Jewels sale, whose top lot, the
34.98-carat “Beau Sancy,” fetched US$9.7 million. The sale had a
sell-through by lot of 85.3 percent and by value of 94.6 percent.
Beau Sancy
Passed down through the royal families of France, England,
Prussia and the House of Orange, the stone, a “modified pear
double rose cut” royal diamond, exceeded its pre-sale estimate
of between US$2 to US$4 million.
First acquired by Nicolas de Harlay, Lord of Sancy, in
Constantinople in the mid to late 1500’s, the Beau Sancy is most
likely to have originated from the mines in south-central India
near the city of Golconda, the source of history’s best-known
diamonds, including the Hope, the Koh-i-Noor and the Regent,
according to Sotheby’s. The Beau Sancy has been shown publicly
only four times in the last 50 years: first in 1972 in Helsinki; in 1985
in Hamburg; in 2001 in Paris; and finally in 2004 in Munich.
Other Highlights
The sale’s second highest earner was a ring featuring a
Fancy Intense purple-pink brilliant-cut diamond weighing 3.71
carats set between two marquise-shaped rubies, which fetched
US$5.5 million against a pre-sale estimate of US$2-US$4 million.
Another highlight was a diamond necklace suspending a pearshaped diamond weighing 41.40 carats, named by the buyer as
“Dubai Vision,” which sold for US$4.95 million, against a pre-sale
estimate of US$3-US$4.9 million. Among other highlights were
a Harry Winston diamond ring weighing 36.43 carats sold for
US$4.1 million, while a natural pearl and diamond Murat Tirara
by Chaumet sold for US$3.9 million.
DIAMOND INTELLIGENCE BRIEFS, available only by
subscription, is published on a weekly basis to ensure a speedy
dissemination of information indispensible to executives in the
diamond and diamond jewelry business. While the information herein is carefully
compiled from sources believed reliable, no responsibility for its accuracy can
be assumed and no representation of warranty expressed or implied is made as
to their completeness or correctness.
Diamond Intelligence Briefs may not be reproduced, distributed, published
or used otherwise for any purpose but for the personal information of the
subscriber without the prior written consent of the publisher.
1 year subscription - US$590 * Individual issues of DIB are available for US$25
website: www.diamondintelligence.com
Editorial and Research Management:
Chaim Even-Zohar, Editor
Rachel Segal, Managing Editor
Anat Hod, Graphics
Subscriptions and Circulation:
CEZ Holdings Ltd.
Silver Bldg., 7 Abba Hillel St., Ramat
Gan, Israel
P.O.B. 3441, Ramat Gan 52136, Israel
Tel: 972-3-5750196, Fax: 972-3-5754829
office@tacy.co.il
www.diamondintelligence.com
© Copyright 2012
by Diamond intelligence Services Inc.
DIAMOND INTELLIGENCE BRIEFS 7309