Alrosa Finds 158 Carat Diamond

Earlier this month, Russian diamond miner Alrosa uncovered a diamond that is one for the books—the gem weighs a whopping 158.2 cts.

Alrosa describes the stone as “a natural crystal roundish in shape, transparent and having prominent facets on one of the sides. The central part is clean, with no visible defects; there are inclusions of dark color, cracks, and a technical chip in the peripheral area.”

The diamond’s size is 35 x 22 x 22 millimeters.

Alrosa expects the stone to sell for $1.5 million, if auctioned.  

“If cut, this rough diamond may produce several polished diamonds having high quality characteristics, and each of them may be worth hundreds of thousands of U.S. dollars,” the diamond producer added.

http://www.jckonline.com/

"Volatile diamond prices not forever'...

A weakening Indian rupee is likely to contribute to volatility in rough diamond prices for the rest of the year, but longer-term price prospects are bright, the chief executive of London-listed miner Gem Diamonds Ltd (GEMD.L) said.

Clifford Elphick, who formed Gem Diamonds in 2005, said prices would eventually resume their upward trend because of the simple fact that demand will continue to exceed supply.

"There's no question that the volatility in Europe is having an impact, and on top of that the appreciation of the dollar against the rupee is a big issue," Elphick said in an interview.

"But at the end of the day, supply and demand determine price and I'm confident that prices will get better," he said.

"There are only so many diamond mines, and the population of the world is wanting ever-more diamonds ... people are consuming diamonds more than they are being mined."

India is the world's biggest importer of rough diamonds and vies with Japan and China as the second biggest consumer of polished diamonds.

However, a six percent decline in the value of the rupee against the dollar since January has made it more expensive for Indians to import raw diamonds, while exports of cut diamonds are being restrained by the euro zone debt crisis.

Economic growth in India has also slowed markedly.

Rough diamond prices fell sharply in the second half of 2011 as markets tumbled and investors retreated. Prices stabilized in the first few months of 2012 but have since turned volatile.

"In the very short-term, between now and October-November, we may well be in for choppy rides as confidence disappears," Elphick said.

"Prices will continue their upward trend over the long-term, definitely over the medium term. Over the short-term, I can't be so confident."

Elphick's optimism about the longer term is shared by BMO Capital Markets, which said earlier this month that it expected rough diamond prices to increase by between 3 and 7 percent a year from 2013.

Gem Diamonds said earlier this week that initial production at its Ghaghoo mine in Botswana, which is under development, would be delayed until the first half of 2014, following a ground collapse that killed two employees.

Elphick declined to say when he expected operations to return to normal at the site.

"They're not back to normal today; they may well be quite soon," he said. "I don't want to get back to normal operations if there is any risk of such a thing happening again."

Production at Ghaghoo was scheduled to start in 2013 at an initial rate of 100,000 carats per year, rising to a peak steady-state production of 780,000 carats per year, according to the company's website.

Gem Diamonds has two mines in production, the Letseng mine in Lesotho and the Ellendale mine in Australia.

The company considered buying the Ekati mine in Canada earmarked for potential sale by BHP Billiton Plc (BLT.L) last year but decided not to proceed.

A deal could have edged Gem closer to FTSE 250-listed Petra Diamonds Ltd (PDL.L) or even put it ahead of its rival, in a sector dominated by giants De Beers - soon to be majority owned by Anglo American Plc (AAL.L) - and Russia's state-owned Alrosa.

Gem Diamonds, which counts upscale jeweler Tiffany & Co (TIF.N) among its customers, continues to explore options for the Ellendale mine, famous for its prized yellow diamonds.

"This is a mine that has a short life," Elphick said. "It probably has another three or four years of life to it, and short-life operations are not really what we want to have in our portfolio," Elphick said. "If a buyer emerged at the right price, we would certainly consider an offer."

Gem Diamonds' shares, which have fallen about 18 percent over the past 12 months, have risen 4 percent since the beginning of this year. They closed at 200.5 pence on Wednesday on the London Stock Exchange.

-www.reuters.com

India Pays Higher Prices for Same Rough Diamonds

The value of India's rough diamond imports and exports increased sharply in November, however the volume was largely unchanged from last year, based on provisional figures published by the GJEPC.

India's net rough diamond imports in November totaled 8.8 million carats worth $1.02 billion. This is a 6% decline in volume yet 42.1% rise in value compared to November 2010.

The value of India's gross rough diamond exports leaped 48.7% to $1.17 billion in November. The volume of exports made a less dramatic increase, up 2.4% to 11.2 million carats.

The disparity between the increased value and volume of exports is a result of a large overall increase in rough diamond prices over the past year. This is also reflected in the difference in the average value of imports. The average value of gross imports in November was $104.09 per carat, compared with $69.90 p/c in November 2010.

Rough diamond exports have leaped in November. India exported $146.3 million worth of rough, up 166.5% year-over-year. The volume of exports increased 50.1% to 2.38 million carats.

-Israeli Diamond Industry

Diamond demand to grow 7%, supply 3%

The rising consumer demand for diamonds in India and China coupled with a recovery in developed countries will result in demand outstripping supply within the next decade, a new report from consulting firm Bain & Co. shows.

Bain & Company released the report, titled “The Global Diamond Industry, Lifting the Veil of Mystery,” on Dec. 2. It was commissioned by the Antwerp World Diamond Centre, the organization that supports the industry in the diamond-trading hub of Antwerp.

In the report, Bain & Company outlines three scenarios for diamond supply-demand between now and 2020.

In the “base” scenario, demand is projected to grow at 7 percent during that time period, while supply increases only 3 percent.

The “higher” scenario pushes those figures to 11 percent and 4 percent, respectively, while in the “lower” scenario, demand is forecasted to grow 5 percent, while supply is flat.

The report lists five possibly disruptive factors that could impact the supply-demand balance over the next decade.

The first is the uncertain macroeconomic outlook, which could place downward pressure on demand. “A severe double-dip recession...could potentially cause a significant slowdown of demand growth for diamonds beyond what is projected in the lower-demand scenario,” the report states. “Particularly troubling and difficult to predict is the potential fallout from the European debt crisis and the continued unclear economic outlook in the United States at the time of the writing of this report.”

Conversely, the development of a significant investment market for diamonds could cause a surge in demand. This is particularly feasible in markets where consumers are concerned with the inflation of local currency and lack of access to financial instruments that act as a hedge against inflation, such as China.

Also potentially impacting the supply-demand balance are growing consumer acceptance of lab-grown diamonds, the discovery and rapid development of a new source of diamonds as well as political instability, the lack of generic marketing and protectionist policies in diamond-producing countries. The report notes that the risk of these developments, however, remains low.

Overall, the report concludes that the outlook for the diamond industry is overwhelmingly positive.

“In the next decade, demand for rough diamonds is set to outpace supply under all considered scenarios, indicating a strong positive outlook for the industry. Several disruptive factors could negatively impact the diamond supply-demand balance, but all of these factors are unlikely to manifest,” it states.

-National Jeweler

India's Polished Exports +4% in September

India's September polished diamond exports rose 4 percent year on year to $2.49 billion while polished imports fell 22 percent to $1.34 billion, according to provisional data provided by the Gem & Jewellery Export Promotion Council (GJEPC). However, India's net polished exports, representing the excess of exports over imports, rose 70 percent to $1.15 billion.

Rough diamond imports declined 4 percent to $936.4 million during the month, while rough exports jumped 48 percent to $146.6 million. India's net rough imports, imports less exports, therefore fell 10 percent to $789.8 million.

For the month of September, India registered a net diamond account -- the total of polished and rough exports less the total of polished and rough imports -- of $361.3 million compared with a deficit of $205 million in September 2010.

For the 2011 calendar year to date, India's polished diamond exports rose 19 percent to $22.45 billion, while polished imports grew 36 percent to $17.11 billion. Rough imports were up 33 percent to $10.07 billion and rough exports jumped 64 percent to $1.18 billion.

India's net diamond account for the first nine months of 2011 registered a deficit of $4.798 billion compared with a deficit of $1.541 billion one year ago.

-Rapaport

Harry Winston Holds Back Rough Sales in 3Q

Harry Winston is expecting lower than forecast rough diamond sales in the current third quarter as it held-off from selling goods in the current unstable market conditions.

''Although we continue to make small sales of specific rough diamond assortments to specialist clients, we have elected not to make broader rough diamond sales into an unstable market that seeks bargains,'' the company's chief executive, Robert Gannicott, said. ''As a result, significant rough sales revenue from this period will be deferred into the fourth quarter, and possibly subsequent periods.''

He noted that the current time of the year is traditionally quiet in the rough market due to the Jewish and Indian holiday periods, but the company expects a return to normality in November as demand increases in the lead-up to the Christmas, Indian wedding and Chinese New Year seasons.

However, the company noted that European banks’ exposure to the current sovereign debt crisis was having an impact on growth in the diamond polishing sector.

''The credit facilities essential to the diamond polishing industry are largely underwritten by European banks that are currently under stress with European sovereign debt issues,'' Harry Winston explained. ''The facilities have not been withdrawn or reduced, but neither have they been increased against higher unit prices.''

As a result, the company noted that cutters are now selling polished and reducing rough purchases to increase liquidity even as jewelry retail consumption continues at levels higher than in 2010. Gannicott stressed that the current strain is not having a dramatic impact on consumer spending, as had the financial collapse of 2008.

Harry Winston reported that jewelry and watch sales at its retail segment have continued to increase in the current third fiscal quarter, with particularly strong sales in the U.S. and Japan, and with Chinese customers representing a growing share of its clientele in all regions.

-Rapaport

US IMPORTS $15M IN ROUGH DIAMOND IN APRIL

The United States imported $40.5 million worth of rough diamonds in April, at an average value of $3,434.11 per carat - a 96.7% and 112.7% respective increase compared to April 2009.

According to IDEX Online, net diamond imports of $15 million are a 73.9% addition compared to 2009, based on figures released by the US Commerce Department.
The volume of US gross diamond imports in April dropped by 7.5% to 11,788 carats.
The United States exported 81,104 carats of rough diamonds in April, worth $25.5 million. The average value per carat was set at $314.50.

South Africa supplied the US with $16.3 million worth of rough diamonds, weighing 1,134 carats. Angola, the second leading supplier of rough diamonds to the US, shipped $13.1 million worth of rough, and the diamond export destinations for the US were Belgium ($11.3 million) and Israel ($6.4 million).