IdexOnline 282

AUG 13
Financing
in the
Diamond
Indu$try
Retail
Birks and Mayors:
Rebranded As Maison Birks
Signet Jewelers: Posts Drop
In Fiscal Q2 Earnings
Crossworks: Signs Supply
Deal With Chow Tai
Fook Jewellery

Polished
Rio Tinto Diamonds: To Play
Key Role In Chinese Market
De Beers: Buys 25% Of
Online Auction Service
Provider Curtis Fitch
Indian Diamond Firms: Call
For Producers To Cut Prices
Mining
Dominion Diamond Corp:
Swings To Loss In Q2
Canada: Government Renews
Geo-Mapping Program
Botswana Diamonds: Signs
Exploration Deal With
Alrosa Units
Rough
RePoRt
Edahn Golan Explains
Why Banks And
Traders Are Trying
To Bring About
Price Reductions
OCT 13

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I DEX MAGAZI NE No. 282
|
21
contents: focus
90 financing in the DiamonD
inDustry
Money makes the world go round, goes the refrain of a
song from the 1972 musical movie Cabaret. Just as this was
true for Sally Bowles, the character played by Liza Minnelli,
it is also true for the many industries that rely heavily on
bank fnancing. These include the global diamond industry,
especially, the narrow-margined manufacturing sector of the
business.
Despite a long history of close cooperation, it often seems
that the diamond industry and its bank partners are at odds
with each other. On one side, diamantaires regularly request
more fnancing at lower cost, while on the other side, bankers
specializing in the industry feel that traders are living in the
past. In the fnanciers opinion, the diamond sector does not
understand that conditions that once existed are now gone
and that new realities demand a more measured approach.
Read on to fnd out more as Edahn Golan discovers just what
it is that makes the diamond industry go round.
22
|
IDEX MAGAZI NE No. 282
contents
64
39
78
86 128
27 Letter from the editor
by Danielle Max
31 memo
34 market snapshot
A quick glance at the events of the past month
retaiL et cetera
39 retaiL rendezvous
46 the porte point of view:
recapturing BLack friday saLes
with creative promotion
by James Porte
48 ideX onLine research
Ken Gassman explains why the US jewelry industry is much
larger than previously reported
52 retaiL Bytes
60 facets
64 ceLeBrity choices
poLished
67 poLished news
74 poLished diamond prices
78 spinning for spineL
by Mehahem Sevdermish, FGA D.Litt
the ideX diamond report
84 ideX onLine rough report
86 a LittLe gossip aBout pearLs
by Luigi Costantini
mining
123 mining news
128 profiLe
Girdharbhai Gajera, Director, Komal Gems NV
129 advertisers List
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COMMISSION - FREE
TRADING ENVIRONMENT
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& PRICES
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OctOber 2013
VOL. 29 No. 282
EDITORIAL DEPARTMENT
EDITOR-IN-CHIEF Danielle Max
IDEX ONLINE EDITOR-IN-CHIEF Albert Robinson
IDEX ONLINE RESEARCH Ken Gassman
INTERNATIONAL CORRESPONDENTS Tamar Katzav, Edahn Golan
COPY EDITOR Robin Miller
ART DEPARTMENT
GRAPHIC DESIGN Alexandra Quinn
PRINTING Meiri
MARKETING DEPARTMENT
SALES ADVERTISING MANAGERS Yaron Barzilay, Osnat Davidov,
Anish Kuriakose, Avivit Morhaim,
PRODUCTION & CIRCULATION Helena Dorsht
ACCOUNT MANAGER Ronit Erlich
Founding Editor and Publisher of Mazal UBracha: Chaim Even-Zohar
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magazine
I NCORP ORAT I NG MAZ AL U' BRACHA
march 27
apri l 3, 2014
Bri lli ance
meets
bsw14_brilliance_meets_210x270_def_ch.indd 1 26.08.13 13:18
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27
In a Purple Haze
by Danielle Max
pring 2014 is a season I feel like I can
relate to already. Tose color geniuses
at Pantone have just released their
Fashion Color Report for spring of next
year and my favorite color purple is
up there in more than one hue.
Im really looking forward to having a slew of clothes,
accessories and other paraphernalia in PANTONE
18-3224 Radiant Orchid, which is actually purple
although you might not guess that from the name,
and PANTONE 16-3823 Violet Tulip, which is very
purple indeed.
Te latest color predictions were made to coincide with
New York Fashion Week and hyped the top-10 color
picks for men and for women. According to Leatrice
Eiseman, executive director of the Pantone Color
Institute, this season consumers are looking for a state
of thoughtful, emotional and artistic equilibrium.
Im not quite sure what that statement means, but
this sort of fashion trend prediction has always
fascinated me. Of course, its a bit of a chicken or egg
scenario. Which comes frst, the color report or the
colors? Do we actually have choice when it comes
to buying clothes and other goods, or is everything
already planned out for us years in advance?
No matter. I will be stocking up on enough purple
items to see me through the next few seasons when,
no doubt, mortal enemies such as lime green and
beige will be back to taunt me.
From a jewelry perspective, these color charts can
also be used to tremendous efect and can help
retailers push certain colors of stones.
When I think purple, I automatically think tanzanite,
so anyone selling this gorgeous stone should get on
the color bandwagon, especially as another 2014 hot
color, Dazzling Blue, is also tanzanite friendly.
Bright yellow Freesia is on the color charts, which
puts me in the mind of beautiful canary yellow
diamonds, while Celosia Orange is a perfect prompt
for orange sapphire, tourmaline, spessartine garnet
or topaz.
Do you pay attention to things like color prediction
charts? Have you seen a diference in popular gems or
diamond colors when diferent color trends come into
play? Let me know at danielle.max@idexonline.com.
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This sort of fashion trend prediction

has always fascinated me. Of course,
its a bit of a chicken or egg scenario.
Which comes frst, the color report or
the colors? Do we actually have choice
when it comes to buying clothes and
other goods, or is everything already
planned out for us years in advance?
28
|
Letters to the Editor
was too much effort with no reward. Maybe when I get into
jewelry (which is truly B2C), I can start doing this!
Thanks again for inviting us to share our experiences.
Siddhit Sanghavi
Business Development at Esteem Diamonds
Dear Danielle,
You are correct that plying the social media world has some
potential for businesses, but it is essentially a narcissistic
endeavor. People like to be recognized and count the
number of followers they have and how often they are
quoted or re-tweeted. But that is a long way from having
commercial impact.
Years ago we were failures if we did not have a fax number,
then it became not having a cell number, then an email
address and a web site. Does Facebook, Twitter or Pinterest
have the same necessity? No, in my opinion. They bring
waves of useless chatter, which most serious people ignore.
Like yourself. There is no urgency to them (as yet), as there
was to the communication tools of the past.
Ben Janowski
Janos Consultants
Dear Danielle,
Regarding the online promotion arena, I can share a
perspective from the diamantaires in India. Marketing
managers in this not-so-Internet-savvy part of the industry
fail to realize three things: initial setup, their approach and
their position in the supply chain.
By initial setup I mean companies getting aboard the social
media bandwagon without having the right PR machinery.
Do you have actual content to post? Is there a designer
who makes infographics/photos etc? If you're only covering
events of your frm, like new branches, products, how is
that news presented? Once the customer is enticed enough
to actually click through to your website, does the website
itself hold water? Does it give a pleasing interface to the
online shopper?
Approach is how we engage them. Theres tons of distractions
so a once in a year update such as we're opening a new
store at ABC or a random diamond photo doesn't entice a
reader much. Only when you've been really feeding him/her
content he/she really loves on a consistent basis will it make
that person get up and come to that inauguration.
By position I mean are you B2B or B2C? I work at a diamond
manufacturing company. You'll see Facebook pages of many
big manufacturers. We also wanted to extend our presence
online in our own small way. For us, it was only to give
people a confrmation that we are a valid, fully functioning
company because people tend to search you before buying
from you. But when I started opening Twitter/Facebook
accounts, I realized, hey, no one buys loose diamonds from
a manufacturer! The people who buy from us (traders,
jewelers) don't need social media engagement and those
who do (ordinary web surfers) do not end up actually buying
from us. A few people did compliment me on our online
presence but like you, my interest in posting stuff waned. It
The jury may still be out, but IDEX Online's

Facebook page is up and running. Like us to
keep up with all the news, views and opinions at
www.facebook.com/IDEXOnline
I received a number of responses to my recent letter about social media. Judging
from the responses, readers seem to be split on the question of whether it is
necessary to spend time on developing social media strategies.
Here are a couple of responses:
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31
very single day we take chances.
Some small, some dangerous but
inevitably, making decisions means
taking risks. It is a basic part of doing
business and growing.
At present, the diamond market is in a delicate state,
and the decisions it makes in the coming months
will infuence it for years to come. Previously, this
column has detailed the new and perilous situation
the market is currently facing: Rough prices are
uneconomically high, diamond polishers margins
are narrow and now cut to nothing because polished
prices are practically fat, and all the while consumers
are buying, albeit not aggressively.
E
Opportunity, Corner of
Wild Gamble
by Edahn Golan
Compounding this difcult situation is the fact that
the banks that fnance the industry, at least the
rough-to-polished wholesale part of the pipeline, are
increasing their charges and lowering the availability
of fnancing. Tis is making business development
difcult and expansion a growing challenge.
We have also discussed the difculties in generating
growing sales at the consumer level. In the US,
consumers are buying a lot more jewelry, but the
diamond jewelry sub-category is not growing at
the same rate. Terefore, diamond jewelry is losing
market share.
In China, the big bright hope for consumer growth,
diamond jewelry sales are increasing; however,
Chinese jewelry buyers are still largely conservative.
Tis means that gold jewelry is still preferred because
of the investment qualities it represents. Above
all, however, jade remains much more desirable to
Chinese consumers than diamonds.
M
E
M
O
Compounding this, the banks that

fnance the industry, at least the
rough-to-polished wholesale part
of the pipeline, are increasing their
charges and lowering the availability
of fnancing. This is making business
development diffcult and expansion a
growing challenge.
32
|
|
memo
|
Tis does not mean that there is no room for diamond
jewelry to grow, but the expectation that jewelry set
with diamonds in a wide range of qualities and colors
will be snapped up from the display cases has proved
to be overly optimistic.
In Japan, after a great three-year run, imports of loose
polished diamonds are starting to weaken, and dont
get me started on India and its economic woes. It is
enough to mention that gold prices have declined and
that many consumers prefer to take advantage of the
opportunity and buy gold jewelry.
Making matters worse, diamond manufacturers are
sitting on a huge stock of polished diamonds. Tis
is the output of the rough diamond overhang that
traders bought in the past year even though they
knew it was not entirely economical. Eventually, these
goods were polished and are now waiting for buyers.
However, it is not all gloom and doom. If the industry
continues to do business in the same old way, no
improvement should be expected, and that is a
dangerous route.
On the other hand, this is an excellent opportunity to
rethink the old model, and chart a fresh course. Tere
is so much to do, including improving efciencies,
investing in smart marketing, bringing reporting
standards into the 21st century, addressing ethics
issues and blocking the continued food of undisclosed
lab-made diamonds into parcels of natural goods.
Te challenges are many, but facing them is a necessity.
It will give rise to many new opportunities, especially
for those seeking to re-invent themselves in an era of
easily accessible data and infnite memory.
Not addressing the issues is taking a wild gamble
with the future of the industry. Ignoring the problems
is like sticking your head in the sand. As I am often
reminded, in that position, your rear end is sticking
out, and anyone can give it a good kick. Tat is not a
good way to move forward. IDEX
Taxation
Inventories
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bankruptcies
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WWW.JORISCO.BE
Beyond
doubt.
OCT
34
|
market
snapshot
by Albert robinson
the month in review
Although demand for jewelry in the United States remained frm in June, the rise
was lower than that seen in recent months. Anecdotal and other evidence points to
increasing confdence among shoppers as the economy improves, albeit slowly.
Figures were likely hit by a 4-percent rise in the consumer price index for jewelry, its
largest increase for 16 months. For most of this year, American jewelry consumers
had been taking advantage of dropping infation. Infation for the frst half of the year
declined by slightly under 1 percent.
JEWELRY
Retail jewelry prices in the US market rose moderately
in June, the result of a seasonal jump that has been
seen for at least the past four years. In contrast, jewelry
wholesale prices fell for the frst time in 13 years. Tis
is to be largely expected because retail jewelry prices
in the United States usually climb in August and
September. Tis is because retailers typically raise
prices in the summer to get consumers used to them
before the critical holiday selling season when they
traditionally make their annual proft.
PERFORMANCE
Posting their weakest performance so far this year,
jewelry sales totaled just $2.3 billion in June. For the
January-June period, sales are estimated to have risen
by 9.1 percent over the same period last year.
Te fnancial results of major jewelry retail chains
released in late August provided a good snapshot of the
state of the markets. Zale Corp. reported a narrower
loss in its fscal fourth-quarter and a proft for the full
year for the frst time in six years. Same-store sales, a
critical indicator for the retail sector,
continued to rise sharply up 5.6
percent in the fourth quarter but
slower than the 8.3 percent increase
posted a year earlier.
Meanwhile Signet, another mass-
market retailer, reported slightly
lower proft compared to the year
before in its fscal second-quarter.
Revenue climbed by just 3.1 percent,
falling $30 million short of analysts
expectations of $910 million. Same-
store sales rose 3.6 percent, compared
with the frms expectations of a rise
in the low-to-mid single-digit range.
Source: IDEX Online Research
350
300
250
200
150
100
2012 2011 2010 2013
Gold
Silver
Platinum
Diamonds
J M A A M J J S O N D J F M J F M A A M J S O N D J F A A M J J S O N D
Index of Diamond & Precious Metals Prices
June 2010 June 2013 by month
150
140
130
120
110
2012 2011
2013
IDEX Online Polished Diamond Price Index
PEAK
July 2011
146.7
August 2013
131.2
2011 Avg
135.8
2013 Avg to date
133.6
2012 Avg
136.8
|
35
14000
13000
11000
12000
10000
9000
Jewelry Share Index U.S.
Sep 2012 Sep 2013 by month
Blue Nile [NILE], Charles & Colvard [CTHR], Movado Group [MOV], Signet Jewelers Limited
[SIG], Tiffany & Co. [TIF], Zale Corporation [ZLC]
10000
9500
10500
9000
11000
11500
Jewelry Share Index Europe
Bulgari [BUL], Damiani [DMN], LVMH [LVMH], PPR [PP], Richemont SA [CFR], Theo Fennell [TFL]
11000
12000
10000
9000
Jewelry Share Index India
Classic Diamond [BOM:523200], Gitanjali Gems [BOM:532715], Goldiam International
[BOM:526729], Rajesh Exports [BOM:531500], Su-Raj Diamonds [BOM:507892],
Suashish Diamonds [BOM:526733]
11000
9000
9500
10500
10000
Mining Share Index
African Diamonds, Anglo American [LON:AAL], BHP Billiton [NYSE:BHP], Firestone Diamonds
[LON:FDI], Gem Diamonds [LON:GEMD], Harry Winston [NYSE:HWD], Petra Diamonds
[LON:PDL], Rio Tinto plc [NYSE:RIO], Rockwell Diamonds [TSE:RDI]
+4748.07 (47.48%)
+1608.67 (16.09%)
-2635.79 (-31.63%)
-368.23 (-3.68%)
8000
7000
6000
2012 2013
S S O N D M M J J F A A J
2012 2013
2012 2013
2012 2013
|
MARkEt sNAPshOt
|
In the luxury sector, Tifany & Co. posted
a rise in revenues and net profts in
its fscal second quarter. Global sales
jumped 4.4 percent on the year to $925.9
million in the second quarter, while
net income rose to $106.8 million from
$91.8 million. Te retailer said proft
was higher than expected due to lower
diamond and gold prices. Interestingly,
the upscale jeweler said its price rises
had not deterred shoppers. Sales at stores
open at least a year, or same-store sales,
increased 5 percent globally.
OUtLOOk
Global diamond industry leaders are
confdent of a strong holiday sales season
based on growing demand for goods,
while many smaller diamond companies
and brokers say the industry is largely at a
standstill. Nonetheless, the rising trend of
sales in the critical American market this
year cannot be ignored, and would appear
to suggest a relatively rosy sales outlook.
POLIshED PRICEs
Polished diamond prices continued to
soften in August, according to the IDEX
Online Polished Diamond Index. Te
Index averaged 131.3 in August, a decline
of 1.9 percent year-over-year and 0.8
percent below July.
Te decline was the second consecutive
drop and followed two months of price
increases, providing a further seesaw
efect to the Index since the beginning
of last year. Te Index has climbed eight
times since the start of 2012, and posted
decreases 12 times. Te overall efect is a
5.4-percent fall since January 2012, and a
1.2-percent decline in 2013 so far.
Te reasons for the decrease in the Index
in August range from traders and other
members of the diamond business being
away from their ofces due to summer
vacation, to supplies of polished goods on
the market handily outstripping demand.
36
|
In addition, rough diamond prices are too high to
be economically feasible to manufacture, while
manufacturers are keeping prices firm in a bid
to maintain polished diamond prices in order to
avoid losses.
WINNERs AND LOsERs
On a year-over-year basis, the price Index for round
goods dropped for all the main sizes during August.
One-carat rounds lost an average of 1.9-percent
compared to the overall price a year ago, the average
price of 2-carat rounds were 3.7 percent lower and
4-carat rounds were 9 percent below their prices a
year ago. Following a small recovery in June, the price
Indexes of 1-, 1.5- and 2-carat
princess-shape diamonds fell
again in August on a month-over-
month basis.
OUtLOOk
Te US market appears to be
relatively strong, as shown
by good results for American
retailers in the frst half of this
year. Meanwhile, the fall in growth
in China this year could be at an
end with moderate growth to
follow. Te Japanese economy is
also showing signs of recovery as
the new government shakes up
the long-moribund economy. Te
only trouble spot appears to be India, where the falling
rupee is hitting consumer demand by making diamond
jewelry more expensive.
ROUGh DIAMONDs
As for most of this year, the rough trading environment
remains a difcult one. Producers have done little to
temper price rises, thereby making the purchase of
rough goods an economically difcult decision to justify.
While rough prices have risen, the price of polished
goods has either declined or, at best, stood still. Te
global economy is still brittle, as seen by spiking oil
prices whenever the possibility of US air strikes on
Syria is mentioned. And in India, with the rupee in
freefall against the US dollar, the price of rough goods is
prohibitively high.
WORth kNOWING
Curtis Fitch: Curtis Fitch is the De Beers Groups
rough diamond online auction service provider. The
miner announced in September that it had bought a
25-percent equity stake in the frm. De Beers, which
sells approximately 10 percent of its global rough
diamond supply through auctions, anticipates that the
investment will deepen the partnership between the
two companies, strengthen the conditions for further
innovation and position it to meet the evolving needs
of a growing auction customer base.
350
300
250
200
150
100
2012 2011 2010 2013
Gold
Silver
Platinum
Diamonds
J M A A M J J S O N D J F M J F M A A M J S O N D J F A A M J J S O N D
Index of Diamond & Precious Metals Prices
June 2010 June 2013 by month
150
140
130
120
110
2012 2011
2013
PEAK
July 2011
146.7
August 2013
131.2
2011 Avg
135.8
2013 Avg to date
133.6
2012 Avg
136.8
|
MARkEt sNAPshOt
|
Our goal is to address proper business practice in
the very broadest sense, and together, CIBJO and
RJC are able to provide comprehensive solutions. The
prime benefciaries of this agreement need to be the
greater jewelry industry, jewelry consumers and all
of our stakeholders to the very grass-roots level.
Gaetano Cavalieri, president of CIBJO, the World
Jewellery Confederation, speaking after the signing of
a Memorandum of Understanding with the Responsible
Jewellery Council (RJC), whereby the two associations will
work together to advance responsible business practices
among all sectors of the jewelry supply chain.

qUOtE
|
37
The summer edition of the US & International Diamond Week, held in Israel from August 26 to 29, recorded the
busiest week ever on the trading foor of the Israel Diamond Exchange (IDE). More than 1,200 traders, buyers
and sellers packed into the IDEs trading halls, according to organizers of the event. There were positive sales
reports from the 400 Israeli diamond frms who had booths at the event, particularly among traders dealing in
larger stones.
OUR OUtLOOk
Te start of the vital holiday sales season will be
anticipated with more fervor than usual this year, as
manufacturers wait to see if consumer demand is going
to be high enough to create a satisfactory margin of
proft between rough and polished prices.
Image: Israel Diamond Exchange
|
MARkEt sNAPshOt
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LINGO
Brand Dilution The risk of over extension can lead
to brand dilution where the brand loses its strong
associations with a market segment, product area,
or quality or price.
Contact us today for a Free Consultation:
+972 (3) 613-4486
or email us at:
info@accadiasoftware.com
C
M
Y
CM
MY
CY
CMY
K
Accadia_ad_Print_ready.pdf 1 12/09/2013 5:05 PM
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39
Retail
Rendezvous:
Fall Fun
Mystery
Te My Little Mystery collection from Meissen comprises
rings, earrings, bracelets and pendants in three product lines.
Diamond, Glamour and Jewels use a mix of diamonds and
white or rose gold with pastel-colored gemstones made from
Meissen porcelain.
1
OCT
2013
reTail, eT CeTera
1
40
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2
5
2
lab Works
In a collaboration between Oroafrica and Rand Refnery, the new, ethically mined Absolute Jewelry
brand is crafted in its entirety from pure, certifed, responsible gold. Designed by Te LAB, the newly
launched Heart of Gold Engagement Ring collection for the Absolute brand comprises rings that are
complete, holistic and balanced; mirroring what every happy marriage needs.
3
Perfect Combination
Estelle and Lita by Royal Asscher is a partnership between Grammy winner Estelle and Lita Asscher.
Te collection consists of several pendants, some incorporating Royal Asschers Stars concept with
foating diamonds and amethysts, rings that reach over the length of the fnger and bracelets and
earrings with purple amethyst and black and white diamond details.
4
Creative Force
Tree talented designers Vah Ghazarian, Esin Guler and Mihran Guler, have come together as the
creative force behind G&G Creations. Te Stacks collection features smaller earrings, stackable
rings and bracelets in polished and oxidized silver, as well as tri-color gold set with rubies, sapphires
and diamonds.
5
Brazilian soul
Te Looping Shine collection from Brumani wants to connect the many bonds people have in life:
friends, relationships, experiences Its a tribute to love, to afection, to companionship, to friendship
and to fellowship. All these emotions are expressed in the warmness of the rose gold while the beauty
of the double-faceted translucent quartz, polished with diamond powder, makes these pieces shine
even more.
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retail et cetera > retai l rendezvous
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6
7
8
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6
Get Knotted
Internationally acclaimed British jewelry designer Stephen Webster has added bold new pieces
to his Forget me Knot sterling silver collection. Te line is characterized by the unmistakable
fusion of luxury with an edge, which epitomizes Stephen Webster designs. Cocktail rings and
cufs featuring the iconic barb motif take center stage in this modern collection
7
Space Style
Te pendant and rings in the Galaxy line from Isabelle Langlois transport wearers light years
from our planet. Set with shimmering stones that evoke the stars and bound by a fne cobweb-
like ribbon set with white diamonds reminiscent of the Milky Way, the line includes a white gold
pendant pavd with 14.09 carats of colored gemstones and 0.45 carats of diamonds. Te yellow
gold rings feature various colored gemstones and diamonds for a twinkling look.
8
Fall Romance
Romance is just one of the inspirations for the designs in the new Ti Sento Milano collection. Te
other is the authentic urban city lifestyle of Florence, especially the Renaissance details found in
the citys many beautiful buildings and bridges. Black stones are used in several shapes, often in
combination with rose gold plated details.
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retail et cetera

> retai l rendezvous
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9
10
9
Full Commitment
When it comes to jewelry, few pieces are as signifcant as those given during a proposal or
exchanged at a wedding. Sandy Leongs Commitment collection is crafted in 18-karat gold with
diamond accents and has a natural earth-like texture, which demonstrates an important value
that she seeks to infuse into every piece: giving back to the planet.
10
Naturally Pink
Te Naturally Pink collection from Bombay Jewelry Manufacturers has an even product
assortment of both bridal and fashion pieces. Tese unique designs incorporate natural pink and
white diamonds to ofset cost and give depth to the designs. Te collection is available in both
14-karat and 18-karat gold and has a choice of two diferent diamond qualities.
11
Viva Italia
Leo Pizzo jewelry is created in the heart of Valenza, Italy, and this Italian style shines through in
every piece. Te 18-karat gold is skillfully processed by expert goldsmiths and further embellished
with selected diamonds and precious stones. Te company says that each jewel, even the most
simple, is characterized by high standards of excellence and quality.
10
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hy should jewelers give up the
biggest shopping day of the year,
Black Friday, November 29 to
consumer electronic stores, Big Box
retailers and the Internet?
In 2012, retail sales for Black Friday were $11.2
billion, and that doesnt even count the Black
Weekend. With an improving economy, sales are
expected to rise in 2013.
Fifteen to 20 years ago, jewelers were excited
to welcome the Tanksgiving weekend since it
represented a healthy dose of store trafc, layaway
sales and a ringing cash register. Now, jewelers
normally have to wait anywhere between three to 10
days before Christmas to experience their sales jolt.
So whats the takeaway? Give up, or fght back with a
smart marketing plan and a lot of creativity.
Jewelers can now reclaim a piece of the Tanksgiving
Weekend pie by ofering employees of local businesses
via their employer a reason to come into their store
with a unique Black Friday Tanksgiving gift card.
So, hereS the plan:
Many of your customers own businesses. Meet
with them and suggest that you can provide Happy
Tanksgiving Cards that include a $50 gift voucher
(that can expire on Cyber Monday) from your store
that can be distributed to all their employees one
or two days before Tanksgiving, which falls on
Tursday, November 28.
retai l et cetera
The Porte Point of View:
Jewelers Recapture
Black Friday Sales
with Creative Promotion
By James Porte
W
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retail et cetera > THE PorTE PoI NT oF VI EW
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Porte Marketing Group is a leader in providing turnkey
manufacturing solutions to jewelry retailers and manufacturers.
Founded by James S. Porte in 1989, the company provides
research, consulting, seminars, printing, photography and
graphic design services for the jewelry industry. For further
information, contact James Porte at jporte01@aol.com or go to
www.portemarketing.com
Teres no cost to the employer or local business, and
there is even the chance that they might appreciate
the efort so much that they ofer to pay a portion for
the redeemed gift cards. To increase the connection
with the employer, the presentation should be
personalized with their name to further emphasize
the third-party endorsement of your store.
To boost the potential trafc even more, use your
contacts from the Rotary Club, Country Club, etc.,
and meet with some employers that you know in your
trade area.
Getting people into the store early to buy and look at
what you have to ofer is important since you dont
want the available disposable income consumers
have to spend on jewelry to be already spent when
they come into your storeget them early!
At frst glance, however, it might seem that the
consumers getting up at 3 a.m. in the morning to wait
on line for hours to get the deal of a lifetime are not
your customers. But they can be, if you could target
the right prospects based on where they work and the
company they work for.
So, look around your local area which is sure to include
law frms, software companies, small factories,
hospitals and the like.
And, if it all goes to plan, you may be starting the
Holiday Season with 100-200 new customers talking
about your store. IDEX
48
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nnual US fne jewelry and watch sales
between 2005 and 2012 were almost $2
billion higher than initial estimates,
according to newly revised data from
the governments Bureau of Economic
Analysis (BEA). Tis eight-year period includes the
Great Recession, when many jewelers struggled to
sell merchandise.
Total jewelry sales, based on restated government data,
were a record $73.7 billion in 2012, up from a previously
reported level of $71.5 billion. Based on an estimated global
jewelry sales level of near $150 billion, this means that the
American market generated roughly half of all global fne
jewelry and watch sales, and is by far the largest market in
the world.
Te BEAs annual data revision was far larger this year than
in prior periods: 10 years of jewelry sales, beginning in 2003,
were restated. Normally, the BEA revises just a few prior
years when it publishes its annual revision.
Minor upward revisions were made to jewelry sales in 2003
and 2004, followed by signifcant increases in jewelry sales
between 2005 and 2012. Most years jewelry sales levels
A
retai l et cetera
IDEX Online Research:
US Jewelry Industry Larger
Than Previously Reported
By Ken Gassman
taBle 11
US Fine Jewelry & Watch Sales (in US$ billions)
Comparison of Restated Figures to Earlier Data
Year
Restated
Fine Jewelry & Watch
Sales
Previously Reported
Fine Jewelry & Watch Sales
$ Billions
Difference
Percent Change
"Restated" versus
"Previously Reported" Sales
2001 $47.6 $47.6 No chg No chg
2002 $49.1 $49.1 No chg No chg
2003 $51.9 $51.4 $0.6 1.1%
2004 $56.6 $55.3 $1.2 2.2%
2005 $59.8 $58.1 $1.6 2.8%
2006 $64.2 $62.3 $1.9 3.0%
2007 $67.2 $65.3 $1.9 2.9%
2008 $65.3 $63.4 $1.8 2.9%
2009 $60.3 $58.4 $1.8 3.1%
2010 $62.6 $60.8 $1.8 2.9%
2011 $69.4 $67.3 $2.0 3.0%
2012 $73.7 $71.5 $2.2 3.1%
Source: BEA & IDEX Online Research
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RETAIL ET CETERA > I DEX ONLI NE RESEARCH
|
were raised by $1.8 billion to $2.2 billion. On average, the
increase represented a 3-percent gain in total sales, as
Table 1 illustrates.
Here are highlights from the revised BEA data regarding US
fne jewelry and watch sales:
US jewelry sales for 2012 were restated upward to $73.5
billion; prior data pegged 2012s American jewelry sales
at $71.5 billion. Tis was a gain of 3.1 percent.
Jewelry sales were revised upward beginning with
2003 data, with signifcant revisions to more recent
years. While jewelry sales were revised upward for the
past 10 years, each years sales level generally followed
economic activity during the Great Recession, which
had a negative impact on jewelry sales during 2008, 2009
and 2010, as Figure 1 illustrates.
During the Great Recession in the last half of the prior
decade (ofcially December 2007 through June 2009), US
fne jewelry sales fell less than 11 percent peak-to-valley.
Tis period occurred between 2007, when pre-recession
jewelry sales peaked at $67.2 billion, and 2010, when
jewelry sales bottomed at 60.3 billion for the year.
On a monthly basis, jewelry sales fell by 16 percent in
December 2008. Tis was a particularly difcult period for
the American jewelry industry, since roughly 20 percent
of annual sales are generated in the month of December.
Figure 2 illustrates percent change in annual fne jewelry
and fne watch sales trends since the year 2000.
New data shows that fne jewelry represents just over
88 percent of total fne jewelry and fne watch sales in
2001
Source: BEA
Source: BEA Source: BEA
10
20
30
40
50
60
70
80
-2
-4
-6
-8
0
2
4
6
8
10
12
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Restated Sales
Prior Sales Data
Fine Jewelry
Fine Watches
11.7%
88.3%
5.5
-3.1
3.2
5.7
4.6
-2.9
-7.7
6.3
8.9
5.6
7.5
3.8
10.8
FIGURE 2
US Fine Jewelry & Watch Sales Trends
Percent Change Year-Over-Year
FIGURE 1
Comparison of Restated US Jewelry Sales To Previously Reported Data
In US$ billions
FIGURE 3
Sales Mix - Fine Jewelry
vs. Fine Watches
US Market - 2012
2001
Source: BEA
10
20
30
40
50
60
70
80
-2
-4
-6
-8
0
2
4
6
8
10
12
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Restated Sales
Prior Sales Data
Fine Jewelry
Fine Watches
11.7%
88.3%
5.5
-3.1
3.2
5.7
4.6
-2.9
-7.7
6.3
8.9
5.6
7.5
3.8
10.8
FIGURE 2
FIGURE 1
In US$ billions
FIGURE 3
vs. Fine Watches
US Market - 2012
50
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RETAIL ET CETERA > I DEX ONLI NE RESEARCH
|
the US, with fne watches accounting for the balance
of just under 12 percent of sales, as Figure 3 illustrates
for 2012. Prior to this years restatement, the BEA data
showed that fne jewelry sales were 87 percent of
total industry sales, and fne watches represented 13
percent of total revenues. Over the past two decades,
fne watch sales have slowly been losing market share
to fne jewelry.
Specialty jewelers lost more market share than originally
reported. In 2012, specialty jewelers sold only about
42.7 percent of all jewelry in the US market, down from
a market share of nearly 75 percent in the early 1970s.
Multi-line retailers such as Wal-Mart, Costco and J.C.
Penney have been taking signifcant market share from
specialty jewelers, especially independent (non-chain)
family-operated jewelry merchants.
Figure 4 summarizes the long-term loss of market
share by specialty jewelers, defned as retail merchants
who generate a majority of their revenue from jewelry
sales. IDEX
2001
Source: BEA
10
20
30
40
50
60
70
80
-2
-4
-6
-8
0
2
4
6
8
10
12
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Restated Sales
Prior Sales Data
Fine Jewelry
Fine Watches
11.7%
88.3%
5.5
-3.1
3.2
5.7
4.6
-2.9
-7.7
6.3
8.9
5.6
7.5
3.8
10.8
FIGURE 2
FIGURE 1
In US$ billions
FIGURE 3
vs. Fine Watches
US Market - 2012
Source: NBER, BLS, JIRI, Dept of Commerce
FIGURE 4
Specialty Jewelers' Market Share
30%
40%
50%
60%
70%
80%
1
9
6
8
1
9
7
0
1
9
8
0
1
9
9
0
2
0
0
0
2
0
1
0
2
0
1
2
Recession
Low point
42.7%
in 2012
Peak
72.9%
in 1971
Whats something most people dont know about your job? Its the only business in the world conducted on trust. You sell 1 to 5
million dollars just on the telephone, without even a signature.
A diamond dealers most valuable asset? Reputation. Yes, you need a sense of artistic value and a knack for design, but the most
essential part is integrity. You cant survive without it.
What has doing business in Hong Kong taught you about the Asian market? Its one of the strongest in the world. Every day, there
are new millionaires and new businesses. Asians are very investment-conscious. Diamonds are safer and more proftable than money in a bank.
All-time favorite purchase? Most recently, a 100+ ct. D FL. Incredible brilliance and scintillation. Such a beauty. People fell down when
they saw it.
Did it arrive with a grading report? Ha, ha. GIA, of course. What responsible businessman, with a good reputation and name, would sell
a diamond without a GIA report?
Why is a GIA evaluation so important to ones reputation? Its the most reliable, authentic, dependable gem institute in the world.
People know that, especially in the Far East. Remember what I said about reputation? A GIA report is crucial.
Business words to the wise? Selling is an idea game. The more knowledge you have, the more confdence you feel.
GIA gratefully acknowledges those who use our resources to further world
expertise in gems. Invest in your success at WWW.GIA.eDu
ephraim zion of Dehres Limited handles
more diamonds in a day than most people see in a lifetime.
Here he discusses the power of reputation, global diamond investment
and why a GIA report is vital to any business built on integrity.
zion_IDEX_2013.indd 1 5/21/13 8:19 AM
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Luxury Institute
Survey Reveals Risk
of Brand Dilution
A recent survey by the Luxury
Institute discovered that while many
afuent shoppers those with a
household income of $150,000 or more
welcome brand partnerships, half
of these afuent consumers believe
that partnering with another brand
luxury or mainstream could damage
the brands image or reputation.
According to the survey, the industries
where partnerships are seen as most
fruitful are hotels and resorts, travel,
fashion and airlines.
Te survey revealed that women are
far more likely than men to applaud
fashion partnerships, as well as those
involving jewelry and beauty.
Perhaps unsurprisingly, men are
most enthusiastic about partnerships
involving automobile companies,
while afuent shoppers older than 50
are especially interested in airline and
cruise collaborations.
Luxury brand collaborations wealthy
shoppers would like to see include
Michael Kors and Apple, Chanel and
Air France and Lexus and Te Ritz-
Carlton.
However, brands need to be careful
about the sort of partnerships they
create. Brands should partner with
companies with similar values and
service standards to avoid potential
risks of collaboration, said Luxury
Institute CEO Milton Pedraza, adding,
Tis maintains credibility and helps
to ensure a consistently positive
customer experience.
Sterling Jewelers,
Zale Corp. Reach
Agreement Over
Lawsuit
Sterling Jewelers Inc. and Zale
Corporation announced they have
reached an agreement with respect
retai l et cetera
Retail
Bytes
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53
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retail et cetera > retail bytes
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to the lawsuit pending in Te United
States District Court for the Northern
District of Ohio.
Te case centered on advertising
produced by Zales stating that its
Celebration Fire diamond was the
most brilliant diamond in the world.
Sterling Jewelers fled the lawsuit
last November just as the holiday
shopping season was getting started.
Te parties said they have agreed to
a negotiated resolution of the case,
which will go into full force and efect
as of March 1, 2014.
Te details regarding the settlement
are not being disclosed.
Pandora Buys
Jewelry Distribution
Rights in Brazil
Global jewelry retailer Pandora has
signed an agreement with City Time,
S.L. to acquire City Time do Brazil
Comrcio e Importao Ltda. in a
cash deal for the distribution rights to
Pandora jewelry in Brazil.
Te acquisition will give Pandora the
opportunity to enter the Brazilian
market directly and to add to its nine-
shop strong retail chain Pandora
Concept. Te retailer currently has fve
stores in Sao Paulo, two in Rio de Janeiro,
one in Brasilia and one in Curitiba.
City Time Brazil generated revenues
of almost $6.5 million in 2012 and $8.2
million in the frst seven months of
2013. Pandora jewelry has been sold in
Brazil since 2009.
Pandora CEO Allan Leighton said
the agreement gives the company, a
stronger presence in a country which
we believe holds great potential. He
said that City Time has established
a presence for Pandora in Brazil
and that the agreement was in line
with the frms strategy of expanding
geographically as well as maintaining
control over the brand.
Under the terms of the agreement,
Pandora will pay a one-time,
undisclosed amount to City Time for
acquiring City Time Brazil.
City Time, which is located in Spain,
has been a Pandora distribution
partner since 2005. Following the
agreement, it will continue to be the
distributor of Pandora jewelry in
Spain and Israel.
Signet Jewelers
Posts Drop in Fiscal
Q2 Earnings, Proft
Signet Jewelers Ltd. reported that
fscal second-quarter earnings slipped
4.7 percent as the retailer continued to
see weak sales in the UK, while higher
costs pressured margins.
For the current quarter, Signet said it
expects same-store sales to rise in the
low-single-digit percentage range.
Signet, which owns the mall-based
Kay Jewelers chain and the higher-
end Jared the Galleria of Jewelry,
has seen its revenue improve in
recent quarters. Tis is due to strong
domestic sales largely helping to ofset
weaker demand from Europe.
Te company acquired Ultra Stores
Inc. for $57 million in November in a
bid to broaden its customer base with
the help of the outlet-center chain.
For the quarter ended August 3, Signet
reported a proft of $67.4 million
versus proft of $70.7 million a year
ago.
Revenue increased 3.1 percent to
$880.2 million. Analysts had recently
forecast revenue of $910 million.
Same-store sales rose 3.6 percent,
while Signet had expected a rise in the
low-to-mid single-digit range.
Te US division generated a same-store
sales increase of 4.9 percent, led by a
5.8 percent rise at Kay and an increase
of 5.5 percent at Jared. Overall revenue
Image: Pandora
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from the division, which makes up
the majority of Signets sales, rose 5.6
percent to $741.1 million, driven by
particular strength in bridal, colored
diamonds and watches.
E-Commerce sales rose 29 percent to
$31.2 million.
In the UK, sales fell 8.5 percent to
$139.1 million, while same-store sales
slipped 2.4 percent.
White Pine
Launches Jewelry
Consulting Service
Recycled diamond company White
Pine Trading LLC is launching a
new division providing consulting
and other services to retailers,
manufacturers and wholesalers, and
the industrys asset-based lenders.
White Pine Jewelry Solutions, which
will be headed by Michael Lebowitz,
will also design and manufacture
pieces created from White Pines
recycled diamonds.
Its services include inventory
evaluation and appraisals; evaluation
of business options from store closing,
consolidation or promotional sales
to overstock sales events; guidance
on running special on-premises sales
events or hands-on management of
events and the development of event
auction and quick sale programs using
White Pines platform.
Te company said these core services
will be augmented by the divisions
diamond jewelry manufacturing
operations as well as an upcoming
program to supply retailers with
consigned close-out inventory drawn
from White Pines vendors.
Lebowitz, who has more than 42 years
of experience in jewelry retailing,
wholesaling and consulting, was most
recently executive vice president
of Buxbaum Jewelry Advisors.
Previously, he served as a consultant
to manufacturer M. Fabrikant & Sons
and held positions as a fne jewelry
merchandise manager for Boston
jeweler Shreve Crump & Low and as a
close-out buyer and asset appraiser at
Gordon Brothers Corp.
CIBJO and RJC
Sign Deal to Work
Together on
Business Practices
CIBJO, the World Jewellery
Confederation, and the Responsible
Jewellery Council (RJC) recently signed
a Memorandum of Understanding
(MoU) at the International Jewellery
London Show.
Te MoU will work to further advance
responsible business practices among
all sectors of the jewelry supply chain,
and will include the use of CSR education
programs developed by CIBJO, in
collaboration with the United Nations,
and chain of custody certifcation
programs developed by RJC.
Te MoU refects the willingness of
both organizations to collaborate on
eforts to build a solid understanding
and commitment from the jewelry
industry to improve its performance
in the crucial areas of human rights,
social and environmental performance
and ethical business practices.
Among the key components of the
MoU is the establishment of an
MoU Working Group to oversee the
execution of the agreement. Te group
will be headed by Gaetano Cavalieri,
CIBJO president, and James Courage,
RJC chairman. Tey will appoint two
industry representatives from their
respective organizations to address the
synergies inherent in the cooperation
between these two global groups.
Our goal is to address proper business
practise in the very broadest sense,
and together CIBJO and RJC are able to
provide comprehensive solutions, said
Cavalieri. Te prime benefciaries of
this agreement need to be the greater
jewelry industry, jewelry consumers
and all of our stakeholders to the very
grass-roots level.
I am personally very pleased to be
working with CIBJO and its president
Gaetano Cavalieri and to be part of the
MoU working group. I am sure there
will be positive outcomes from this
collaboration for the jewelry industry,
said Courage.
Stuller, Inc. and
Gemvision Release
CounterSketch
Studio Update
With the growing desire for unique
jewelry, Stuller and Gemvision have
released CounterSketch Studio 4.0,
which is an extensive update to the
existing 3D jewelry design software.
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The creative software program
has full 3D capabilities including
features that allow a jeweler to
interact with customers to design a
piece of jewelry in real-time on the
showroom floor computer.
Te enhanced features include
Freehand Mode, which allows jewelers
to add popular additions or parts to
designs, such as halos and patterns,
an intuitive user-friendly interface
including easy-to-use slider controls,
photorealistic images and more than
150 new gemstone choices.
Whether a jeweler is altering an
existing design or conceptualizing
from scratch, this program has
everything needed to create bridal,
fashion, remounts, even earrings and
pendants, said Jef High, president
of Gemvision and chief innovation
ofcer for Stuller.
Ofering your customer an
opportunity to truly be a part of the
design process is an unforgettable
experience for them, added Stuller
founder and chairman Matt Stuller.
Tiffany & Co.
Reports Higher
Revenues And Net
Profts in Q2
Tifany & Co posted a rise in revenues
and net profts in its fscal second
quarter ended July 31.
Global sales climbed 4.4 percent on
the year to $925.9 million in the second
quarter, while net income jumped to
$106.8 million from $91.8 million a
year before.
Proft was higher than expected, aided
by lower diamond and gold prices,
while the upscale jeweler said its price
rises had not put of shoppers.
Sales at stores open at least a year,
or same-store sales, increased 5
percent globally.
Better-than-expected sales in China
enabled a 13-percent jump in sales
in the Asia region outside of Japan,
which accounts for around 20 percent
of the jewelers sales.
Meanwhile, in Europe, same-store
sales jumped 7 percent, excluding
currency fuctuations, and were
unchanged in the Americas.
Tifany raised its proft forecast for
this year, and said it expects net sales
worldwide to show a mid-single-digit
percentage rise.
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CounterSketch Studio 4.0
haRd woRk pays off.
manufacturer i mport - export poli shed di amonds i n all si zes and quali ti es
manufacturer of large si zes, rounds and fanci es, up to 25. 00 cts
schupstraat 1/7 2018 antwerpen belgium tel + 32 3 231 21 47 info@pinchasi.com www.pinchasi.com
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Crossworks Signs
Supply Deal With
Chow Tai Fook
Jewellery
Canadian diamond manufacturer
Crossworks Manufacturing Ltd.
has signed a long-term supply and
licensing agreement for its patented
Hearts and Arrows ideal cut square
diamond with Chow Tai Fook Jewellery
Group Ltd.
Crossworks will supply the diamonds
and Chow Tai Fook, a leading jewelry
retailer in China, will have the
exclusive distribution rights to sell
them through its extensive retail
network in Greater China.
Crossworks square-cut Hearts and
Arrows diamond has achieved the
grade of ideal for light performance
from leading gem labs, and ofers an
eight-sided square-cut diamond that
exhibits eight hearts and eight arrows.
Te launch of this diamond in
Greater China through Chow Tai Fook,
one of the worlds most iconic jewelry
retailers, achieves our vision to bring
beautiful diamonds to consumers,
said Crossworks president Uri Ariel.
Te hearts and arrows ideal square
cut diamonds will be exclusively
sold through Chow Tai Fooks points
of sale and marketed under the De
Beers Groups Forevermark brand in
Mainland China, Hong Kong, Macau
and Taiwan.
Birks and Mayors
Rebranded as
Maison Birks
Canadian jeweler Birks and Mayors
has been rebranded as Maison Birks.
Te rebrand includes a modifed
logo and a brand new advertising
campaign that the company says
retains its 135-year-old history, but
also expresses the modern experience
it ofers to its clients.
Te new logo retains the companys
emblematic blue box, but it now
also includes a diamond shape,
which references both the companys
expertise in diamonds, and 1897, the
year in which it was founded.
Te new advertising campaign also
highlights the companys Canadian
heritage.
Birks has been a household name in
Montreal and in the rest of Canada
for nearly 135 years, and it remains
the reference in terms of quality
and prestige for consumers and
connoisseurs across the country, said
Jean-Christophe Bdos, president and
CEO of Birks & Mayors Inc.
While attesting to our rich history,
the new corporate identity rejuvenates
Maison Birks brand proposition, and
allows Canadians to discover Maison
Birks in all its purity. Tis is a historic
moment for our company,
Te launch coincided with the
opening of Maison Birks frst mono-
brand store, located in the Mapleview
shopping centre in Burlington,
Ontario. A second mono-brand store is
due to open in the Square of Quartier
DIX30 in Montreal, Quebec. IDEX
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Image: Maison Birks
haRd woRk pays off.
manufacturer i mport - export poli shed di amonds i n all si zes and quali ti es
manufacturer of large si zes, rounds and fanci es, up to 25. 00 cts
schupstraat 1/7 2018 antwerpen belgium tel + 32 3 231 21 47 info@pinchasi.com www.pinchasi.com
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Scent of the Past
Te Museum of London is gearing up
for the opening of Te Cheapside
Hoard: Londons Lost Jewels, which
is due to open on October 11. As part
of the preparations, the museum
has commissioned British master
perfumer Roja Dove to reimagine the
scent of Londons vanished past.
Te perfume, which will be spliced
with ingredients popular in the 17th
century, will combine lavender,
frankincense, civet and other notes
to create an evocative sensory
installation, transporting visitors
back to the opulent perfumes of
Elizabethan and Early Stuart London.
Te scent will be displayed alongside
one of the star pieces of the Cheapside
Hoard a gold, enamel, diamond and
opal-set scent bottle.
Te Cheapside Hoard is the worlds
largest cache of Elizabethan and
Early Stuart jewelry. Discovered by
chance in a cellar deep underground
in Londons Cheapside in 1912, the
upcoming exhibition is the frst time
that the Hoard has been displayed in
its entirety since its discovery more
than 100 years ago.
Te collection includes jewels from
the emerald mines of Colombia, the
diamond gravels of India and the pearl
banks of Bahrain.
retai l et cetera
Facets
According to the museum, Te jewels
and gemstones within the Cheapside
Hoard hail from all corners of the
world, showcasing Londons role in the
international gem trade in an age of
global conquest and exploration. Each
piece tells a tantalizing story, from gift
giving at the Elizabethan court to tales
of international trade and discovery
and vignettes on fashion, wealth and
power.
Te Cheapside Hoard will be displayed
alongside multimedia installations,
objects from the Museum of Londons
collection and rarely seen portraits,
creating a picture of the fashions and
culture at play in Elizabethan and
Early Stuart London.
The Gold, Enamel, Diamond and
Opal-Set Scent Bottle
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Tacori Unveils The
Serving Tray and
The Lock Ads
Californian jewelry brand Tacori has
unveiled the latest installments of its
Iconic Passion ad campaign with two
bold new images, Te Serving Tray
and Te Lock.
Te Lock was inspired by the romantic
love locks phenomena in which lovers
attach locks to bridges and then toss
the key into the water. Te rings,
says the company, are the symbol of
a Tacori couple locked in a bond of
eternal love, and represent the key to
unlocking your beloveds heart.
Meanwhile, the Serving Tray features
the vivid hues of red, blue and black
from Taocoris City Lights Collection.
Presented on a luxurious sterling
silver tray, the unveiling of glamorous
new designs from Tacori exposes
a modern passion for old-world
glamour.
Te new ads have already been
featured in the September issues of
Harpers Bazaar, Essence, InStyle, Marie
Claire, W, Womens Health and Vogue.
HOF launches
Perfect Moments
Social Media
Platform
Hearts On Fire has launched its
Perfect Moments social media
platform. Te company says it is a
social storytelling community that
allows people to share experiences
they deem perfect moments in
an environment focused solely on
positive happenings.
Users share their moment on a global
map, pinpointing its location with an
image and short description. Tey can
also search by keyword or location to
explore moments in specifc areas and
get ideas for events such as marriage
proposals, date nights and vacations.
Perfect Moments provides integration
with Facebook, allowing users to
create a profle and connect with
Facebook friends, scrapbook their
personal moments and comment on
moments. It also allows integration
with other social media platforms,
such as Twitter and Pinterest, as well
as working with Instagram.
Hearts On Fire has also released
an iPhone app that allows users to
capture and upload moments on-
the-go with seamless integration and
quick, simple steps.
Te Hearts On Fire DNA has always
been about helping our customers
celebrate lifes perfect moments, said
Caryl Capeci, VP of Marketing. By
giving everyone a digital platform
to document and share their best
experiences with friends and family,
we are simply helping them to
embrace these moments in a timeless,
enjoyable manner.
TanzaniteOne
Launches Online
Jewelry Boutique
Tanzanite mining company
TanzaniteOne has made the move
online with the opening of a jewelry
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retail et Cetera > facets
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and loose stone boutique. Tis is the
frst time the company has directly
ofered its gemstones to consumers.
TanzaniteOne said that being able
to retail tanzanite directly to global
consumers means the company is
now involved in every step of the route
from mine to market, thereby allowing
it to guarantee the provenance, quality
and ethical status of its stones.
Te tanzanite ofered on our online
boutique is more than just a collection
of rare and beautiful gemstones
and jewelry said Linda Kennedy of
TanzaniteOne Online, Our tanzanite
is the only tanzanite that is ethically
mined - guaranteeing peace of mind,
something which is increasingly
important to educated and socially
conscious consumers.
All TanzaniteOne Online pieces come
with the Tanzanite Foundations
Mark of Rarity and a TanzaniteOne
certifcate of authenticity and origin,
guaranteeing the tanzanites ethical
status, authenticity and confict free
origin. Te online boutique is also a
member of the World Responsible
Jewellery Council.
Tanzanite is found only at the foothills
of Mount Kilimanjaro in Tanzania,
Africa. It was frst discovered in 1967
Bill Clinton to Speak
at Centurion
Former US president Bill Clinton
has been announced as the keynote
speaker at the Centurion Scottsdale
show next year.
Remarks by President Bill Clinton
will take place on February 4 at the
invitation-only show.
After leaving the White House,
President Clinton established the
Clinton Foundation, which has the
mission to improve global health,
strengthen economies, promote
healthier childhoods, and protect the
environment by fostering partnerships
among governments, businesses,
NGOs and private citizens.
So far, more than 2,100 Clinton
Global Initiative commitments have
improved the lives of 400 million
people in 180 nations.
Te Centurion Scottsdale show runs
from January 31 (early arrivals) to
February 5. idex
Tanzanite Mine Shaft
Image: Tanzanite Foundation
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Lily Collins wore a Pluma
Italia necklace to the Te Mortal
Instruments: City of Bones Germany
premiere at Sony Centre on August
20 in Berlin, Germany.
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retai l et cetera
Celebrity Choices
Actress Michelle Rodriguez chose a Le Vian
ring as her accessory for the 2013 Teen Choice
Awards at Gibson Amphitheatre in August in
Universal City, California.

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Carmen Electra wore an Amit GT gown,
Demarco diamond earrings and ring and
a Le Vian diamond bracelet and snake
ring at the Voices On Point gala beneft
that took place at the Hyatt Regency
Century City, California on September 7.
Snazzy outft!
Actress Bella Torne jazzed up her outft with
Le Vian earrings for the 28th Annual Imagen
Awards at Te Beverly Hilton Hotel in August in
Beverly Hills, California.

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Rio Tinto Diamonds
to Play Key Role in
Chinese Market
Rio Tintos diamonds will play an
important role in the growing Chinese
diamond jewelry market, its Diamonds
and Minerals chief executive, Alan
Davies, said recently in Hong Kong.
Speaking on the eve of exclusive
viewings of the prestigious Argyle
Pink Diamonds Tender, Davies said,
Te demand for diamond jewelry in
China is expected to grow strongly
into the next decade, underpinned by
an increase in wealth and a growing
middle class.
He also said the companys Argyle
underground mine will help meet
Chinas growing demand for diamonds
and will ensure the future supply of
a diamond production profle that is
uniquely placed to develop new types
of jewelry for the Chinese market.
Rio Tinto said that in addition to rare
pink diamonds, Argyle also produces
large volumes of afordable diamonds
that are ideally suited to creating
fashion accessories for the emerging
middle class in China.
Traditionally, the Chinese jewelry
market has been dominated by large
white diamonds used on bridal
occasions, a trend imported from the
west, but there has been a structural
change in the China market, according
to Rio Tinto
Chinese consumers are increasingly
seeking diamond jewelry as a daily
fashion accessory. To tap into this new
category of diamond purchasing, one
of Rio Tintos key initiatives has been
to partner with Chinese diamond
jewelry manufacturer and retailer
Chow Tai Fook, to promote Argyle
diamonds in the jewelry giants stores.
Te resulting Australian Colours
collection has surpassed all
expectations and is now available
in more than 1,000 Chow Tai Fook
stores throughout greater China, said
Davies.
OCT
2013
POLISHED
Image:
Brown Diamonds from the Argyle Mine
Image: Rio Tinto Diamonds
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Organizers
Positive About US
& International
Diamond Week
Te summer edition of the US &
International Diamond Week in Israel
saw the Israel Diamond Exchanges
(IDE) busiest week ever, with more
than 1,200 traders, buyers and sellers
crowding the IDEs trading halls,
organizers reported in a summary of
the event.
Tere were positive sales reports from
the 400 Israeli diamond frms that
had booths at the event, particularly
among traders dealing in larger stones.
From an organizational point of view,
this was a major efort, IDE general
manager Moti Besser said. Te logistic
requirements and arrangements were
huge: screening registered buyers,
fnding 600 hotel rooms, receiving,
hosting and getting the visitors into
the buildings, the business matching
breakfasts, the educational program
and the social events and, of course,
the complicated but airtight security
arrangements, Besser explained.
Marketing itself as the most secure, but
also the most user-friendly diamond
exchange in the world. Te exchanges
head of security Israel Vantsovski
said, We literally had hundreds
of additional security ofcers on
call during the US & International
Diamond Week. Most of our security
team members were not noticed by
the visitors.
De Beers Buys 25%
of Online Auction
Service Provider
Curtis Fitch
De Beers has announced an investment
in its rough diamond online auction
sales platform with the acquisition
of a 25-percent equity stake in online
auction service provider, Curtis Fitch.
De Beers, which sells approximately
10 percent of its global rough diamond
supply through auctions, anticipates
that the investment will deepen
the partnership between the two
companies, strengthen the conditions
for further innovation, and position
De Beers to meet the evolving needs
of a growing auctions customer base.

The US & International Diamond Week
at the Israel Diamond Exchange
Image: Israel Diamond Exchange
Full Page template.indd 102 01-Feb-12 5:57:14 PM
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Building more fexibility for
rough diamond purchasers
strengthens the value of
De Beers ofering, the frm
said in a statement. De
Beers is the rough diamond
online auction leader, having
launched the frst online
auction with Curtis Fitch
in 2008, and having worked
with the company over the
past fve years to introduce
innovations that add value to
to customers businesses. De
Beers has introduced rank
auction events, multiple unit
auctions and is on schedule
to launch Forward Contract
Sales, innovations which
enhance customers ability to
tailor their supply needs.
Curtis Fitch will remain an
independently managed business. As
a 25-percent shareholder, De Beers
will occupy two seats on the Curtis
Fitch board.
GJEPC and Signet
Accept Dubai Gold
for Import to India
Te Dubai Multi Commodities
Centre Authority (DMCC) announced
recently that the Export Promotion
Council (GJEPC) of India supports
the inclusion of imports of gold from
Dubai Good Delivery Standard (DGD)
compliant refners into India.
Simultaneously, Signet Jewelers Ltd.
(Signet) confrmed that based on
independent evaluation, the DGD
standard is compliant with the Signet
Responsible Sourcing Protocol (SRSP)
for gold.
These recognitions will allow
manufacturers in India to accept
gold from refineries on the DGD list,
as well as re-assure others in the
supply chain that gold from DGD
refineries is responsibly sourced.
DGD refneries are all required to
adhere to DMCCs Practical Sourcing
Guidance and Review Protocols.
Indian Diamond
Firms Call For
Producers to Cut
Prices
Indian diamantaires running small
and medium-sized frms that have
been hit by a declining rupee against
the US dollar, which is making imports
expensive and increasing rough prices,
are calling on diamond producers to
reduce the price of rough goods.
Diamond manufacturers are also
sufering due to static or even
declining polished prices, which
makes expensive rough unproftable
to purchase.
A drastic reduction is needed in the
prices of rough diamonds ofered by
the diamond miners, Surat Diamond
Association president Dinesh Navadia
told Te Times of India. Small and
medium players are not able to buy
rough diamonds, as the rupee is
trading at 68 to the dollar.
Rough diamond prices have increased
by 15-20 percent in the past year,
Image: De Beers
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while polished diamond prices have
decreased by 6 percent since January
2013, according to the report.
Naresh Patel, a rough diamond dealer,
told the newspaper, Tere is no
proftability left for the manufacturers
in buying rough diamonds at
exorbitantly high prices. Te small
manufacturers will not buy rough
diamonds till the diamond miners
reduce prices, and the rupee eases
against the dollar.
As a result, Indian frms are calling
on producers, including De Beers,
Alrosa and Rio Tinto, to reduce rough
diamond prices.
Major US Trade
Bodies Support
World Diamond Mark
Te leaders of the major US diamond
industry organizations, the Diamond
Dealers Club of New York (DDC)
and the Diamond Manufacturers &
Importers Association of America
(DMIA), have pledged their support
for the goals of the World Diamond
Mark (WDM).
Alex Popov, the chairman of the
World Diamond Mark Foundation
(WDMF), met with DDC president
Reuven Kaufman, and DMIA
president Ronnie VanderLinden
during a visit to New York and briefed
them on the WDMs progress. Both
Kaufman and VanderLinden pledged
their organizations support for the
WDMs objectives.
Te American diamond and diamond
jewelry industry caters to the worlds
largest, most sophisticated and most
demanding consumer market, Popov
said.
We are convinced that the WDM
program and in particular the
Authorized Diamond Dealer concept
will be instrumental in boosting
consumer confdence in diamonds
and diamond jewelry, and, just as
important, improve our industrys
competitive position in the luxury
consumer product market.
Kaufman was positive about the
WDMs chances of success. Weve seen
a furry of eforts to install alternative,
generic diamond advertising and
marketing campaigns that all have
failed. Te World Diamond Mark, we
believe, will succeed.
Meanwhile, VanderLinden talked
about the need for an across-the-board
consensus on an all-encompassing
generic marketing and advertising
campaign for diamond jewelry in the
major consumer markets. Here in the
USA, we certainly have felt the lack
of a generic, coordinated, consensual
consumer campaign for diamond
jewelry. We are certain that the WDM
program, including the Authorized
Diamond Dealer concept, constitutes
a solid business plan, he said.
Te World Diamond Mark aims to help
the diamond and jewelry industry to
grow. It is based on three fundamental
principles: the education of the
jewelry retail business community
about diamonds, confdence building
with the consumer public with the
WDM accreditation program and
the creation of a generic marketing
program to promote diamonds and
diamond jewelry.
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on the companys ofcial website
(www.malcaamit.com) to verify that
they are dealing with a legitimate
Malca-Amit ofce or representative.
IGI Innovates
with Spanish and
Portuguese Grading
Reports
Te International Gemological
Institute (IGI) grading laboratory has
expanded its diamond report series
to include Spanish and Portuguese
language options.
Te lab said the move was made as
the Hispanic and Latino markets for
jewelry continue to grow.
IGI says it is the only major worldwide
gemological lab to ofer this service.
Taking into account the current and
impending jewelry market growth
among Hispanics and Latinos, we saw
an opportunity to provide an essential
service, said IGI president and CEO
Jerry Ehrenwald. We are thrilled to
equip retailers and consumers alike
with the necessary tools to understand
their reports and the respective
diamond quality.
Te bilingual options will include
a full-page report, diamond
diagram and details on the stones
characteristics. IDEX
AWDC, Bain &
Co. Release Third
Report on Global
Industry
Te Antwerp World Diamond Centre
(AWDC) and business consultants
Bain & Company have released their
third annual report on the global
diamond industry, called Journey
Trough the Value Chain.
Te report focuses on the diamond
value chain and traces the route
diamonds take to get to market,
presenting detailed information on
rough and polished diamond sales.
In addition to the focus on the
diamond value chain, the report
compares the results of 2012 with
those of previous years, highlighting
the impact of continuing economic
uncertainty on the diamond market.
Furthermore, the report reviews a
signifcant new trend in diamond
production: a stream of M&A activity
among the top producers of rough
diamonds.
Other new elements in this report are
in-depth analyses of diamond sales
models and approaches.
Te report summarizes key challenges
and provides an outlook for the
diamond industry through to 2023.
AWDC CEO Ari Epstein said that
following the frst two reports the
organizations published, the third
one is another valuable addition to
understanding how our business works
and which challenges lay ahead.
Malca-Amit Issues
Warning About
Fraudulent West
African Firm
Logistics company Malca-Amit has
issued an alert about a frm called
Malca-Amit West Africa, which is
falsely representing itself as part of the
Malca-Amit International Network.
Te company, which has no afliations
whatsoever with the Malca-Amit
International Network, claims to be
working throughout West Africa as
part of Malca-Amit.
By using Malca-Amits name and
logo and creating a website based on
Malca-Amits content, Malca-Amit
West Africa is attempting to lure
companies into believing that they
are dealing with a legitimate branch of
the trusted secured logistics provider.
Tis is not the case, the company said
in a statement.
Malca-Amit is urging all those
approached by or put in contact with
an unfamiliar person claiming to be
a representative of the company to
contact a Malca-Amit ofce as listed
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WWW. I DEXONLI NE. COM
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74
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POLI SHED
Polished Diamond Prices
Summer Slump: Prices Drop
1.9% in August
by Edahn Golan
150
140
130
120
110
0
-2
-4
-6
-8
-10
2011 2010 2009 2008 2007 2012 2013
PEAK
July 2011
146.7
August 2013
131.3
2011 Avg
135.8
2012 Avg
136.8
2013 Avg to date
133.5
Figure 1
2007-2013
Figure 2
Prices of Round-Shape Polished Diamonds
By Size August 2013 vs. July 2013
0.5 Ct 1.0 Ct 1.5 Ct 2.0 Ct 3.0 Ct 4.0 Ct 5.0 Ct
0
-2
-4
-6
-8
-10
Figure 3
By Size August 2013 vs. August 2012
0.5 Ct 1.0 Ct 1.5 Ct 2.0 Ct 3.0 Ct 4.0 Ct 5.0 Ct
8
6
0.9%
6.6%
-1.1%
-0.9%
-0.8% -0.6%
-0.2%
-7.8%
-1.1%
-2.0% -1.9%
-1.1%
-3.7% -3.6%
-9.0%
-8.1%
2.9%
4
2
Figure 4
Prices of Princess-Shape Polished Diamonds
1.0 Ct 1.5 Ct 2.0 Ct
rices of polished diamonds continued to
soften in August. Te IDEX Online Polished
Diamond Index averaged 131.3 in August,
down 1.9 percent year-over-year and 0.8
percent compared to July
August was the second month in a row of overall month-
over-month price declines, which followed two months of
increasing prices, resulting in a seesaw efect in month-to-
month prices since the beginning of 2012.
Overall, there has been a 5.4-percent decline since January
2012 and a 1.2-percent decline since January 2013. Te IDEX
Online Polished Diamond Index has risen eight times in the
20-month period and declined 12 times.
P
Full Page template.indd 102 17-Oct-11 3:40:36 PM
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polished > poli shed di amond pri ces
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Tere are a number of reasons for the recent price declines:
Trade is limited during the summer months when many
traders are on vacation. As a result, prices tend to ease in
July and August. Prices of rough diamonds are high and
manufacturers are trying to maintain polished diamond
prices to avoid losses. More importantly, however, there has
been a large injection of rough and limited demand.
Te price Index of all key sizes of round shape diamonds
decreased in August on a month-over-month basis.
Te Index for the important 1-carat rounds lost 0.9 percent
compared to July, while the fuctuating 4-carat rounds
declined 7.8-percent.
On a year-over-year basis, the price Index for round goods
declined for all key sizes. One-carat rounds lost an average
1.9-percent of their price compared to the overall price a year
ago; the average price of 2-carat rounds were 3.7 percent lower
and 4-carat rounds were 9 percent below their prices a year
ago.
After the price dip in May and the small recovery in June,
the prices of 1-, 1.5- and 2-carat princess-shape diamonds
declined again in August on a month-over-month basis. Tis
is a reversal in the price trend for these items, which have been
a popular and cheaper alternative to rounds.
On a year-over-year basis, the three key-size princess-shape
diamond categories are still exhibiting price increases, mostly
1.5-carats, which increased 6.6 percent compared to August
2012. One-carat diamonds increased by 0.9 percent, while
2-carat diamonds increased by 2.9 percent.
After steadily increasing from the 2009 crisis, developing
into runaway prices in the frst half of 2011, the IDEX Online
Polished Diamond Index peaked at 146.7 in July 2011, and has
been trending downwards ever since, although the trend has
moderated in the last few months.
150
140
130
120
110
0
-2
-4
-6
-8
-10
2011 2010 2009 2008 2007 2012 2013
PEAK
July 2011
146.7
August 2013
131.3
2011 Avg
135.8
2012 Avg
136.8
2013 Avg to date
133.5
Figure 1
2007-2013
Figure 2
0.5 Ct 1.0 Ct 1.5 Ct 2.0 Ct 3.0 Ct 4.0 Ct 5.0 Ct
0
-2
-4
-6
-8
-10
Figure 3
0.5 Ct 1.0 Ct 1.5 Ct 2.0 Ct 3.0 Ct 4.0 Ct 5.0 Ct
8
6
0.9%
6.6%
-1.1%
-0.9%
-0.8% -0.6%
-0.2%
-7.8%
-1.1%
-2.0% -1.9%
-1.1%
-3.7% -3.6%
-9.0%
-8.1%
2.9%
4
2
Figure 4
1.0 Ct 1.5 Ct 2.0 Ct
150
140
130
120
110
0
-2
-4
-6
-8
-10
2011 2010 2009 2008 2007 2012 2013
PEAK
July 2011
146.7
August 2013
131.3
2011 Avg
135.8
2012 Avg
136.8
2013 Avg to date
133.5
Figure 1
2007-2013
Figure 2
0.5 Ct 1.0 Ct 1.5 Ct 2.0 Ct 3.0 Ct 4.0 Ct 5.0 Ct
0
-2
-4
-6
-8
-10
Figure 3
0.5 Ct 1.0 Ct 1.5 Ct 2.0 Ct 3.0 Ct 4.0 Ct 5.0 Ct
8
6
0.9%
6.6%
-1.1%
-0.9%
-0.8% -0.6%
-0.2%
-7.8%
-1.1%
-2.0% -1.9%
-1.1%
-3.7% -3.6%
-9.0%
-8.1%
2.9%
4
2
Figure 4
1.0 Ct 1.5 Ct 2.0 Ct
150
140
130
120
110
0
-2
-4
-6
-8
-10
2011 2010 2009 2008 2007 2012 2013
PEAK
July 2011
146.7
August 2013
131.3
2011 Avg
135.8
2012 Avg
136.8
2013 Avg to date
133.5
Figure 1
2007-2013
Figure 2
0.5 Ct 1.0 Ct 1.5 Ct 2.0 Ct 3.0 Ct 4.0 Ct 5.0 Ct
0
-2
-4
-6
-8
-10
Figure 3
0.5 Ct 1.0 Ct 1.5 Ct 2.0 Ct 3.0 Ct 4.0 Ct 5.0 Ct
8
6
0.9%
6.6%
-1.1%
-0.9%
-0.8% -0.6%
-0.2%
-7.8%
-1.1%
-2.0% -1.9%
-1.1%
-3.7% -3.6%
-9.0%
-8.1%
2.9%
4
2
Figure 4
1.0 Ct 1.5 Ct 2.0 Ct
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77
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polished > poli shed di amond pri ces
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The full analysis of polished diamond prices is
available to IDEX Online Research subscribers and
IDEX Online members.
Contact research@idexonline.com for more information
on how to subscribe or to become a member.
FOR LIVE UPDATES
V
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outlook
US retailers enjoyed a good run in the frst half of 2013, and the
most recent information indicates that this trend continued
into the third quarter. Te rising stock market in the US the
S&P 500 increased by 14.5-percent in the frst eight months
of 2013 and is set to continue rising by 19 percent according
to recent forecasts means that many Americans will have
deeper pockets for discretionary expenses in the November-
December holiday season, and diamond jewelry will beneft
from this spending.
Despite the recent slowdown in demand growth, solid
demand from China provides additional reasons to expect
at least a temperate improvement in demand in the coming
months. However, lackluster demand from Indian consumers,
2011 2011 2012 2013
M A A M J J S O N D S O N D J F M A A M J J J F M A A M J J S O N D J F
Source: IDEX Online Research and Edahn Golan Diamond Research & Data
4.0 Ct
5.0 Ct
3.0 Ct
2.0 Ct
1.0 Ct
1.5 Ct
0.5 Ct
300
250
200
150
100
Figure 5
Index of Round-Shape Polished Diamond Prices
By Size September 2011 to August 2013
who are being hurt by the weakening rupee, is dampning the
global demand outlook.
We expect polished diamond prices to increase in the long
term, especially with the improving Japanese economy, which
is still a leading diamond-consuming market.
78
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"A
gem, in order to be a gem and
valuable, has to have beauty, rarity
and durability. Tis was the frst
sentence uttered by my teacher,
Michael ODonoghue, when I began
my formal gemological studies.
I have found his maxim to be a relatively good rule
of thumb most of the time. Over the years, I have
seen some pretty ugly stones fetching high prices,
and some very soft stones sneaking into that group of
valuable gems, as if they were as hard as diamonds. I
even know of rare, durable and beautiful stones that
struggle to be recognized as gems.
Which brings me to the subject of spinel. I dont know
why, but in the early days, like most gem dealers, I
never thought much of them. Perhaps it was because
I always remembered the story about the beautiful
Black Princes Ruby, named after Prince Edward in
the 1400s, which sits in the Imperial State crown in
the British Crown Jewels and which turned out to be a
simple red spinel.
But over the past decade, and especially after several
close encounters with spinels in Mahenge, Tanzania,
I have become totally enchanted by the gemstone.
Teir color ranges from magnifcent reds to deep
pinks to padparadscha (orange-pink) hues and
violets and mauves and blues. Most are as rare and
poli shed
Spinning for Spinel:
The Long March for Respect
By Menahem Sevdermish, FGA D.Litt.
Why is it that with all the fuss
we are making about treated
stones, the spinel is being
ignored? Here, right in front of
our very eyes, is an absolutely
magnifcent gem in very popular
colors, and it is totally natural!
80
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polished > spi nni ng for spi nel
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About gemewizArd
Gemewizard is a pioneer in the development of digital
color-based systems, which provide solutions for professionals
involved in the fancy color diamond, colored gemstone
and jewelry industries, enabling the analysis, description,
communication, pricing and trading of color in gems. The
suite of products developed by Gemewizard is based on the
companys groundbreaking color communication technology
called GemeSquare, which has been endorsed by GIA, and
since 2006, has been incorporated into the GIA curriculum.
http://www.gemewizard.com
as beautiful as the thousands of fancy sapphires that
I have cut in my career, and some have been far nicer
and more sparkling. Tey are also quite hard, 8 on the
Mohs scale. And they have one quality that I adore
they are natural, unheated and untreated in any way.
For years, I was sure that the whole world would see
eye-to-eye with me. But, to my dismay, whenever I
mentioned them, the typical response from customers
would be one of discomfort. Ah, spinel you say, they
would utter warily, as if I was talking about citrine or
smoky quartz; not that I mean any disrespect to these
gems.
Somehow, these clients seemed to regard this very
rare, hard and beautiful stone as if it were an imitation.
But an imitation of what? Of rubies and sapphires
that are so commonly treated that the relationship
between their original color and treated color is non-
existent?
I couldnt understand it. Why is it that with all the
fuss we are making about treated stones, the spinel is
being ignored? Here, right in front of our very eyes, is
an absolutely magnifcent gem in very popular colors,
and it is totally natural!
And then it occurred to me. Tis is a case of gemstone
racism. What other reason could there be for the scorn
rained down upon the Black Princes Ruby, which was
discovered to be a rare spinel, other than some form
of mineral bigotry? After all, they couldnt even bring
themselves to call it the Black Princes Spinel, as if in
order to be worthy of a royal title, you need to be a
ruby.
But, even then, I believed that the future would
shine brightly for spinel. After all, the only stone
that my daughter agreed to wear in a necklace was a
magnifcent pink one.
However, I found myself virtually alone in the
mission to achieve some respect for this gemstone. I
almost gave up, moving back to other, more socially
acceptable precious gems.
But then, three years ago, something changed.
Suddenly, the price of pink and especially red spinel
gems began rising. And when I say rising, I mean the
space shuttle taking of kind of rising.
From several hundreds of dollars per carat for a
beautiful 10-carat red spinel, the prices of these gems
were multiplied at least 10-fold to the area of $10,000
per carat. For bigger and rarer stones, the prices went
even higher. I once heard one of my colleagues from
Europe asking a whopping 20,000 per carat for a
15-carat red spinel.
And not only the pinks and the reds are basking in
the limelight. Other spinel colors, such as violets,
lilacs, lavenders and blues, have all been showing
phenomenal price increases as well.
Although I had not directly infuenced the sudden spin
of the spinels prices, I realized that maybe my eforts
had paid of after all. We were once but a handful of
spinel activists, but we had helped plant the seeds
for success. It took a long time, but eventually spinel
arrived at the place it deserves.
To paraphrase Michael ODonoghue, A gem, in order
to be a gem and valuable, has to have beauty, rarity,
durability, and the lobbying eforts of at least one
stubborn fan. IDEX
The DTC logo is a trademark used under licence from DTC
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EURO-02637-Ad-Idex-210x270-Masterpieces.indd 1 27/08/13 09:31
53.5 42.5 37.0 34.5 29.5 25.5 24.0 23.5 19.5 15.5 10.5
46.0 39.5 33.5 31.5 27.0 23.5 21.5 18.5 15.5 10.0 8.5
40.5 38.5 31.5 28.5 26.0 22.0 20.0 17.0 14.5 9.0 8.0
36.0 33.0 29.5 27.0 24.5 21.5 18.5 16.0 13.5 8.5 8.0
31.0 30.0 26.5 26.0 24.0 21.0 18.0 15.0 13.5 8.5 7.5
29.0 24.5 23.5 22.5 21.0 19.5 16.5 14.5 13.5 8.0 7.5
23.5 21.0 20.5 19.0 17.5 17.0 15.5 14.0 13.0 8.0 6.5
20.0 19.0 18.0 17.0 16.0 15.5 14.5 13.5 9.5 7.5 6.0
18.5 17.5 17.0 15.5 15.0 14.5 12.0 11.5 9.0 6.5 5.5
17.0 16.0 15.5 14.5 13.5 13.0 11.5 10.0 8.0 6.5 5.0
15.0 14.5 14.0 13.5 12.5 11.0 10.5 9.5 8.0 6.5 5.0
ROUNDS 0.40-0.44
ROUNDS 0.80-0.89 ROUNDS 0.70-0.79
102.5 78.5 69.0 63.5 59.5 48.0 41.0 36.0 31.5 22.5 14.5
77.5 70.5 63.0 59.0 53.5 46.0 38.5 34.5 28.0 21.0 14.0
66.5 61.0 58.0 56.5 49.5 45.0 37.5 34.0 27.5 20.5 13.5
62.0 57.5 55.5 49.0 44.5 40.0 34.5 31.5 26.5 20.5 13.0
55.0 54.0 49.0 44.5 42.0 38.0 33.0 30.0 24.5 18.0 11.5
44.5 42.5 42.0 40.5 37.5 33.5 26.5 25.5 21.0 13.5 9.5
32.0 31.0 30.5 29.5 28.5 27.0 24.5 23.0 19.0 11.5 9.0
26.5 26.0 24.5 23.0 22.0 20.5 19.0 18.5 15.5 10.5 8.0
25.5 23.5 22.5 21.5 21.0 20.0 17.5 17.0 15.0 10.5 8.0
24.5 22.5 21.5 21.0 20.5 19.5 16.5 16.0 13.5 9.5 8.0
22.5 21.5 21.0 20.5 20.0 19.0 15.5 13.5 11.0 8.5 7.0
116.5 92.5 79.0 71.0 65.5 54.0 43.5 39.0 33.5 23.5 14.5
94.5 78.5 71.0 63.0 59.5 50.0 41.5 36.5 30.5 21.5 14.0
79.5 74.0 62.5 61.0 55.5 49.0 40.5 36.0 29.0 21.0 13.5
69.0 62.0 58.0 55.0 49.0 44.0 38.0 32.5 28.0 20.5 13.5
59.0 57.0 54.0 48.5 45.0 41.0 35.5 32.0 25.0 18.5 12.0
48.0 46.0 43.0 42.0 41.0 35.5 31.5 28.5 21.5 14.0 10.0
36.5 34.5 34.0 32.0 31.0 29.0 28.0 25.5 19.5 12.0 9.0
32.5 29.0 28.5 25.0 24.5 21.0 20.0 19.0 16.0 11.0 8.0
32.0 27.5 25.0 22.5 21.5 20.5 19.0 18.5 15.0 10.5 8.0
31.5 27.0 24.5 22.0 21.0 20.0 17.5 17.0 14.0 9.5 8.0
28.5 25.5 22.5 21.0 20.5 19.5 16.5 14.0 11.5 8.5 8.0
ROUNDS
IDEX DIAMOND PRICE REPORT
IDEX analysis of asking prices f or hi gher-quality diamonds i n t he i nternational wholesale markets
In hundreds of USD per carat I Updated weekly I www.idexonline.com/prices I email: prices@idexonline.com I Page 1/2
Prices of actual transactions may vary significantly from this report. Prices are affected by various factors including but not limited to diamond quality, certification & geography.
IDEX does not guarantee the accuracy nor the validity of this information. Copyright 2011 by IDEX Online, S.A. All rights reserved.
12-SEP-2013
30.0 24.5 24.0 21.0 19.0 16.0 13.5 11.0 9.0 7.5 6.0
23.5 23.0 21.5 20.0 18.5 15.5 13.0 10.0 8.0 6.5 5.5
22.5 21.0 20.5 17.5 17.0 14.0 12.5 9.0 8.0 6.5 5.5
19.5 18.5 18.0 17.0 15.5 12.0 11.5 8.5 8.0 6.5 5.5
19.0 18.0 17.5 15.5 15.0 11.5 10.0 8.0 7.5 6.0 5.0
18.0 17.0 16.0 14.5 13.5 10.5 9.5 7.5 7.0 6.0 5.0
17.0 16.5 13.0 10.5 9.5 8.5 8.0 7.0 6.5 5.5 4.5
12.5 11.5 10.0 9.0 8.0 7.5 7.0 6.5 6.0 5.0 4.0
10.0 9.5 9.0 8.5 7.5 7.0 6.5 6.0 5.0 4.0 3.5
9.5 9.0 8.5 8.0 7.0 6.5 6.0 5.5 4.5 3.5 2.5
8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.0 3.5 2.5
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ROUNDS 0.18-0.22 12-Sep-13
IF VVS1 VVS2 VS1 VS2 SI1 SI2 SI3 I1 I2 I3
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ROUNDS 0.45-0.49 12-Sep-13
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12-Sep-13
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ROUNDS 0.30-0.39 12-Sep-13
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12-Sep-13
22-Sep-11
35.0 26.0 25.0 21.5 20.0 18.0 16.0 11.5 10.0 8.5 7.0
26.0 24.0 23.0 20.5 19.5 16.5 14.5 10.5 9.5 8.0 6.0
24.5 23.0 22.0 20.0 19.0 15.5 13.0 10.0 8.0 7.5 6.0
22.5 21.5 20.5 19.0 18.0 14.5 12.0 9.5 8.0 7.5 6.0
21.0 19.5 19.0 18.0 17.0 14.0 10.5 9.0 8.0 7.0 5.5
20.0 18.5 17.0 16.5 15.0 13.0 10.0 8.5 8.0 7.0 5.5
19.5 17.5 15.0 13.0 12.0 10.5 9.5 8.0 7.5 6.5 5.0
14.5 12.5 11.5 11.0 10.0 9.0 8.0 7.5 7.0 6.0 4.5
11.5 10.5 9.5 9.0 8.5 8.0 7.5 7.0 6.0 5.0 4.0
10.5 10.0 9.0 8.5 8.0 7.5 7.0 6.5 5.0 4.0 3.0
10.0 9.0 8.5 8.0 7.5 6.5 6.0 5.5 5.0 4.0 3.0
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ROUNDS 0.23-0.29 12-Sep-13
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ROUNDS 0.50-0.69 12-Sep-13
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12-Sep-13
Increases are shown in green, decreases in red.
78.0 60.5 51.0 47.5 42.0 34.0 29.0 27.0 22.0 20.5 13.5
57.0 53.0 46.5 45.0 38.5 31.5 26.0 24.5 20.5 19.0 12.5
51.5 49.5 45.0 42.5 37.5 29.5 25.0 23.5 19.5 18.0 12.0
49.0 44.0 42.5 39.5 34.0 28.5 24.0 22.5 19.0 17.5 11.5
42.0 40.0 38.5 35.0 31.5 27.0 23.0 21.5 18.0 16.0 11.0
37.0 36.0 33.0 30.5 28.0 23.0 20.0 18.0 15.0 11.0 8.0
29.5 29.0 27.0 25.0 22.0 20.0 18.5 17.0 14.0 9.0 8.0
24.0 23.5 21.5 19.5 19.0 18.0 16.5 15.0 13.0 8.0 8.0
23.0 21.0 19.5 19.0 17.5 17.0 14.5 13.5 12.0 8.0 6.5
22.5 20.5 19.0 18.5 17.0 16.0 14.0 13.0 11.0 8.0 6.5
22.0 20.0 18.5 18.0 16.5 15.5 13.5 11.5 8.5 8.0 6.5
37.5 30.5 26.5 24.0 22.5 19.5 18.0 15.5 14.0 11.0 8.0
30.0 28.0 24.0 22.0 20.5 18.5 17.5 15.0 14.0 9.0 7.5
26.0 25.5 23.0 21.0 20.0 17.5 17.0 14.0 13.0 9.0 6.5
24.5 23.5 21.5 20.5 19.0 17.0 16.0 13.0 12.0 8.5 6.5
22.5 21.5 20.5 19.0 18.5 16.5 15.5 12.5 11.5 8.0 6.5
20.5 19.5 18.0 17.5 16.5 15.5 14.5 12.0 10.0 8.0 6.0
20.0 18.0 16.5 15.5 14.5 14.0 13.0 11.5 9.0 7.0 5.5
16.0 15.5 14.5 14.0 13.5 12.5 11.5 10.5 8.0 6.5 5.0
15.0 14.0 13.5 13.0 12.0 11.0 9.5 8.5 7.5 6.0 4.5
13.0 12.5 12.0 11.5 11.0 10.5 9.0 7.0 6.0 4.5 3.5
12.5 12.0 11.5 11.0 10.5 7.5 6.5 6.0 5.0 4.0 3.0
41.5 35.0 32.0 31.0 26.0 22.5 20.5 19.0 15.5 12.0 9.0
35.5 32.5 29.5 28.0 24.5 21.0 19.5 16.5 14.5 9.0 8.5
32.5 32.0 29.0 25.0 24.0 20.5 18.5 16.0 13.5 9.0 8.0
30.5 28.5 28.0 24.5 23.0 19.5 18.0 15.0 13.5 8.5 7.5
27.5 26.5 25.0 23.5 21.0 19.0 17.0 14.5 13.0 8.5 7.5
23.5 22.5 21.5 21.0 19.0 18.0 15.5 13.0 12.0 8.0 7.5
20.5 20.0 18.5 18.0 16.0 15.5 13.5 12.0 10.5 7.5 6.0
19.5 18.0 17.0 16.0 15.0 14.5 12.5 11.0 9.0 7.0 5.5
18.0 17.0 16.5 14.5 13.5 12.5 11.0 9.0 8.0 6.0 5.0
16.0 15.5 15.0 14.0 13.0 11.5 9.5 7.5 6.5 5.0 4.0
14.5 14.0 13.5 12.5 12.0 10.5 9.0 7.0 6.5 5.0 4.0
ROUNDS 3.00-3.99
ROUNDS 1.50-1.99
ROUNDS 1.00-1.24
12-Sep-13
1628 1217 907 674 489 330 224 127 99 57 29
1285 956 767 619 456 302 205 110 89 49 22
972 759 697 558 433 287 190 107 87 44 21
753 517 475 454 404 276 187 106 83 41 19
574 411 389 364 306 224 176 94 75 38 19
436 338 324 278 268 197 143 84 66 37 19
334 288 264 233 226 167 134 73 58 34 18
246 216 211 185 166 121 98 64 51 27 18
187 160 140 132 120 107 78 59 46 26 18
144 120 109 101 96 84 65 51 42 26 17
108 102 92 76 63 58 50 45 36 25 17
1395 1111 852 633 456 297 205 113 94 52 26
1224 863 622 556 448 258 194 107 87 47 21
912 592 508 489 404 246 187 106 85 43 21
714 474 430 373 313 214 173 105 78 40 19
542 366 340 310 262 200 151 92 71 38 19
412 267 247 219 191 162 122 82 64 37 19
323 225 192 170 165 133 109 71 56 34 18
199 189 167 146 126 113 91 62 50 26 18
171 154 131 120 107 86 71 56 45 25 18
136 116 99 92 86 75 61 50 38 25 17
101 91 81 69 57 52 49 44 34 23 16
ROUNDS 2.00-2.99
518 399 351 308 213 167 122 90 73 44 22
362 312 292 253 189 151 114 86 64 39 18
309 272 251 221 183 142 109 85 56 34 16
239 212 198 173 155 129 104 81 54 29 16
185 175 161 156 135 119 99 78 53 26 16
140 132 126 118 110 100 87 72 50 24 15
110 104 99 92 85 82 72 64 49 22 15
94 91 90 88 81 73 62 58 44 18 15
78 75 73 68 63 55 49 43 31 16 14
69 65 64 60 51 46 41 35 26 16 14
65 59 58 57 47 42 36 29 24 16 13
278 200 171 142 123 89 74 66 52 33 18
201 183 142 121 110 84 71 62 48 29 16
160 140 119 115 94 81 68 60 45 27 16
127 117 112 94 87 76 65 57 44 27 16
101 98 88 85 77 71 64 54 44 24 15
84 77 74 71 68 64 59 53 39 21 15
70 67 66 62 59 53 51 47 34 18 14
60 56 55 53 52 46 40 35 29 16 14
51 48 47 46 43 39 35 33 27 16 14
47 43 39 37 35 30 29 28 21 16 14
46 42 37 34 27 25 24 23 19 16 13
12-Sep-13 ROUNDS 0.90-0.99
ROUNDS
IDEX analysis of asking prices for higher-quality diamonds in the international wholesale markets
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12-Sep-13
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ROUNDS 1.25-1.49 12-Sep-13
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12-Sep-13
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ROUNDS 4.00-4.99 12-Sep-13
D
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D
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12-Sep-13
D
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12-Sep-13
D
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ROUNDS 5.00-5.99
12-SEP-2013
1027 703 606 510 370 242 184 105 88 51 24
667 604 496 435 333 235 168 103 85 47 21
533 492 390 340 317 205 154 100 80 43 20
428 365 329 297 255 173 136 98 71 40 19
317 284 262 244 195 161 127 91 70 38 19
230 215 211 190 166 126 114 81 63 36 19
182 168 164 149 137 113 95 70 56 30 18
149 141 138 126 109 95 79 61 49 23 17
115 109 102 95 90 67 59 54 42 22 17
95 91 87 76 70 56 49 42 34 21 17
78 72 64 59 49 46 41 38 31 21 16
320 247 208 180 151 115 88 76 58 36 19
224 201 176 161 137 109 85 74 54 35 17
192 179 155 143 123 107 81 71 53 33 16
152 145 130 120 113 100 77 68 53 29 16
120 114 108 102 100 89 73 64 50 26 16
100 97 90 88 84 77 66 58 45 21 15
86 84 78 74 68 61 56 50 39 19 15
69 66 65 61 56 52 45 38 32 16 15
57 54 52 51 49 44 38 34 27 16 14
50 48 46 41 36 35 33 31 22 16 14
48 46 45 39 35 32 30 28 20 16 13
153 123 107 86 74 68 57 50 40 27 16
123 118 94 78 69 62 55 47 37 24 16
115 104 86 73 68 60 51 45 37 24 15
95 85 70 67 63 56 49 44 35 23 15
77 74 67 60 57 53 45 41 29 21 14
64 59 56 53 50 47 41 37 25 16 12
55 50 48 46 42 39 34 33 21 15 11
40 38 37 36 35 31 30 29 18 14 10
35 34 33 31 30 27 26 25 16 12 10
33 32 31 29 25 24 23 20 16 12 10
32 26 25 23 22 21 18 16 14 11 9
245 182 156 129 110 81 65 60 49 33 18
174 156 130 111 96 75 63 56 47 28 16
143 131 110 104 87 74 62 55 45 27 16
115 108 102 90 82 71 59 54 44 27 16
96 91 86 79 73 65 56 50 41 24 15
77 76 69 67 63 58 50 47 38 20 15
67 66 63 58 55 50 46 42 33 16 14
57 55 54 51 49 43 39 34 29 16 14
47 46 45 44 41 37 33 31 27 16 13
44 42 38 35 33 29 28 27 20 16 12
43 41 36 33 26 24 23 21 18 15 12
THE WORLDS MOST ADVANCED
TECHNOLOGY IS POWERLESS WITHOUT
THE EYE AND HEART TO GUIDE IT.
COMPLETE
CRAFT.
The cutting and polishing of the highest quality
diamonds is how we built our global reputation.
But the unlocking of the unique value and
beauty in each stone is a personal passion.
It is these skilled and passionate individuals
who make Rosy Blue and each of them
understands that delivering complete
excellence in both product and service is
at the core of their craft.
THE DTC SIGHTHOLDER LOGO IS A TRADE MARK
USED UNDER LICENCE FROM THE DE BEERS GROUP
WWW. ROSYBLUE . COM
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w
w
.
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d
e
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o
n
l
i
n
e
.
c
o
m
COMMISSION - FREE
TRADING ENVIRONMENT
DIAMOND
TRADING
& PRICES
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And more
INDIA
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43.5 30.5 26.5 25.0 23.0 20.5 17.5 16.5 13.5 11.0 8.0
33.0 27.0 24.0 23.5 21.5 19.0 16.0 14.0 11.5 9.0 7.5
29.0 24.5 21.5 21.0 20.5 15.5 15.0 13.0 11.5 8.0 6.5
26.5 22.5 20.0 19.5 18.0 14.5 13.5 11.0 10.5 7.0 6.0
23.0 21.0 19.0 18.5 16.0 13.5 12.0 10.0 9.5 7.0 5.5
22.0 20.0 16.5 16.0 14.5 13.0 11.5 9.5 8.0 6.5 5.5
16.5 16.0 14.0 13.5 13.0 12.5 10.5 9.0 7.5 5.5 4.5
14.5 13.5 12.5 12.0 11.5 11.0 10.0 8.0 7.5 5.0 4.0
12.5 12.0 11.0 9.5 9.0 8.5 8.0 7.5 5.5 4.5 3.5
12.0 11.0 10.0 9.0 8.5 8.0 7.5 6.5 5.5 4.5 3.5
11.0 10.0 9.5 8.5 8.0 7.0 6.5 6.0 5.0 4.5 3.5
FANCIES 0.40-0.44
FANCIES 0.80-0.89 FANCIES 0.70-0.79
71.0 63.5 54.0 50.0 45.0 40.0 33.0 30.5 27.0 18.0 12.0
54.5 52.5 50.0 47.0 41.5 37.0 31.5 29.0 23.5 17.5 11.0
51.5 46.0 45.0 44.0 39.5 35.5 30.0 25.0 23.5 16.5 10.0
47.0 44.0 41.0 39.5 37.5 33.0 28.5 24.5 23.0 15.0 9.5
45.0 40.0 37.5 35.0 34.0 31.5 26.5 24.0 21.0 13.5 8.0
40.0 32.0 31.5 30.0 28.5 28.0 25.5 20.0 19.0 12.5 7.0
28.5 26.0 25.0 24.0 23.0 22.5 20.0 16.0 13.5 7.5 5.5
21.5 20.0 19.5 19.0 17.5 16.5 15.5 13.5 10.5 6.5 4.5
19.5 15.5 14.5 14.0 12.5 12.0 11.0 10.5 8.0 6.0 4.5
18.5 15.0 13.5 12.5 10.5 10.0 9.0 8.0 7.5 5.5 4.0
15.5 13.5 13.0 11.0 10.0 9.0 8.0 7.0 5.5 4.5 3.5
77.5 67.5 59.0 52.5 50.5 43.0 35.5 34.5 34.0 23.5 13.0
64.0 55.0 53.5 50.0 45.0 41.5 33.0 31.0 29.5 22.5 12.0
54.5 51.0 48.0 47.5 43.0 41.0 32.5 29.5 29.0 19.5 11.0
49.5 45.5 45.0 42.0 40.5 36.5 32.0 28.0 27.5 18.0 11.0
45.5 43.0 40.0 37.0 36.5 33.0 29.0 27.0 24.5 16.0 9.5
41.0 34.0 33.0 32.5 32.0 30.5 28.0 23.5 22.0 14.5 8.0
30.5 28.5 28.0 25.5 24.0 23.0 21.0 17.5 15.5 8.0 6.0
22.5 21.0 20.5 19.5 18.5 18.0 17.0 15.0 11.0 7.0 5.0
20.0 17.0 15.5 15.0 14.0 13.5 13.0 12.5 10.0 6.5 4.5
19.0 16.0 15.0 14.0 12.0 11.0 10.5 9.5 8.0 5.5 4.5
16.0 14.5 13.5 11.5 10.5 9.5 8.5 7.5 6.5 5.0 4.0
FANCIES
IDEX analysis of asking prices f or higher-quality di amonds in the international wholesale markets
12-SEP-2013
18.0 15.5 15.0 13.5 12.0 10.5 8.0 7.0 6.0 5.0 4.0
14.5 14.0 13.5 11.5 10.5 8.0 7.5 6.0 5.5 4.5 3.5
12.0 10.5 10.0 9.5 8.5 7.5 7.0 5.5 5.5 4.5 3.5
11.0 10.0 9.5 9.0 8.0 7.0 6.0 5.0 5.0 4.0 3.5
10.5 9.5 9.0 8.5 7.5 6.0 5.5 4.5 4.5 3.5 3.0
10.0 9.0 8.5 8.0 7.0 5.5 5.0 4.0 4.0 3.5 3.0
9.5 8.5 7.5 6.0 5.5 4.5 4.0 3.5 3.5 3.0 2.5
7.0 6.0 5.5 5.0 4.5 4.0 3.5 3.0 3.0 3.0 2.5
5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 2.0 2.0 2.0
5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.5 1.5 1.5
4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 1.0 1.0 1.0
D
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FANCIES 0.18-0.22 12-Sep-13
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FANCIES 0.45-0.49 12-Sep-13
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12-Sep-13
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FANCIES 0.30-0.39 12-Sep-13
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12-Sep-13
22-Sep-11
21.0 19.5 19.0 17.0 15.0 12.5 11.0 9.0 8.0 6.0 5.0
19.5 19.0 18.5 15.5 14.5 11.5 10.5 7.5 7.5 5.5 4.0
17.5 17.0 16.5 14.5 14.0 11.0 10.0 7.0 7.0 5.0 4.0
17.0 15.0 14.5 13.5 12.5 10.5 9.5 6.5 6.5 5.0 4.0
15.5 14.5 14.0 13.0 11.5 10.0 8.5 6.0 6.0 5.0 3.5
14.0 13.5 13.0 11.5 9.0 8.5 8.0 5.5 5.5 4.5 3.5
13.0 11.0 10.0 8.0 7.5 7.0 6.5 5.0 5.0 4.0 3.5
10.0 9.0 8.0 7.5 6.5 6.0 5.5 4.5 4.5 4.0 3.0
8.0 7.5 7.0 6.0 5.5 5.0 4.5 4.0 4.0 3.5 2.5
7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.5 2.5 2.0
6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 3.0 2.5 1.5
D
E
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FANCIES 0.23-0.29 12-Sep-13
D
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N
FANCIES 0.50-0.69 12-Sep-13
D
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12-Sep-13
F
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(
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(
2
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)
,

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(
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)
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(
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(
9
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H
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(
7
%
)
56.5 42.5 36.0 32.5 30.0 26.0 22.5 19.5 18.0 13.0 8.5
45.0 35.0 33.0 28.0 26.5 23.0 21.5 18.5 17.5 12.0 7.5
36.0 31.0 29.5 26.0 25.0 22.5 20.5 18.0 17.5 11.5 6.5
31.0 27.0 26.0 25.0 24.0 22.0 19.5 17.5 17.5 11.0 6.5
29.0 25.0 24.5 24.0 23.0 20.0 19.0 16.5 16.0 10.5 6.5
26.0 23.0 22.0 20.5 19.5 18.5 17.0 15.5 13.5 8.0 6.0
20.0 18.5 18.0 17.0 16.5 16.0 15.5 13.5 12.0 7.0 5.5
16.5 15.5 15.0 13.5 13.0 12.5 12.0 11.0 10.0 6.0 4.5
14.5 13.5 12.5 10.5 10.0 9.5 9.0 8.0 6.0 4.5 4.0
14.0 12.5 11.0 10.0 9.0 8.5 8.0 7.5 5.5 4.5 3.5
12.5 10.5 10.0 9.5 8.5 7.5 7.0 6.5 5.0 4.5 3.5
30.5 24.5 21.0 19.5 17.5 16.5 15.0 12.5 11.0 8.0 5.5
26.0 24.0 20.0 18.5 16.5 15.0 13.0 11.0 10.5 7.0 5.0
22.0 21.5 17.5 17.0 16.0 13.5 12.5 10.0 9.0 6.5 4.5
18.0 17.5 17.0 16.0 15.0 13.0 12.0 9.5 9.0 5.5 4.0
16.5 15.5 15.0 14.5 14.0 12.5 11.0 8.5 7.5 5.5 4.0
15.5 15.0 13.5 13.0 12.5 11.5 10.0 7.5 7.0 5.0 4.0
14.0 12.0 11.0 10.0 9.0 8.0 7.5 7.0 6.0 4.5 3.5
10.5 9.5 9.0 8.5 8.0 6.5 6.0 5.5 4.5 4.0 3.0
8.5 8.0 7.5 7.0 6.5 5.5 5.0 4.5 4.5 3.5 3.0
7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.0
7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.5 3.0 1.5
34.5 28.5 25.5 24.5 22.5 20.0 16.0 13.5 12.5 10.0 7.0
28.5 26.0 23.0 22.0 21.0 18.5 15.5 13.0 11.5 8.0 6.5
26.5 23.5 21.0 20.5 20.0 15.0 14.5 12.5 11.0 8.0 6.0
25.0 21.5 19.5 19.0 17.5 13.5 13.0 10.5 9.5 7.0 5.0
21.0 19.0 18.0 17.5 15.0 13.0 11.5 9.5 8.5 6.5 5.0
19.0 18.5 16.0 15.5 13.5 12.0 10.5 9.0 8.0 6.5 5.0
15.5 13.0 12.5 12.0 11.0 10.5 9.5 8.0 7.0 5.5 4.0
13.5 12.5 11.5 11.0 10.0 9.5 8.5 7.0 6.0 4.5 3.5
12.0 11.5 10.5 9.0 8.5 8.0 7.5 6.0 5.0 4.0 3.0
11.5 10.5 9.5 8.5 8.0 7.5 6.0 4.5 4.0 3.0 2.5
9.5 9.0 8.5 8.0 7.5 6.5 5.5 4.0 4.0 3.0 2.5
FANCIES 3.00-3.99
FANCIES 1.50-1.99
FANCIES 1.00-1.24
12-Sep-13
1004 886 726 605 490 316 238 123 102 57 28
876 743 620 511 452 276 167 84 68 37 21
686 579 518 447 392 236 157 79 64 32 16
574 444 397 382 291 207 141 73 60 29 15
401 358 333 296 246 190 125 64 52 26 14
323 277 254 217 201 166 113 62 46 25 14
248 226 178 175 157 142 107 61 39 24 13
178 146 128 127 111 93 76 49 31 20 13
127 104 84 80 74 72 54 36 24 20 13
94 74 64 58 56 53 41 28 24 20 12
67 62 52 44 36 35 32 26 24 19 11
820 692 567 512 398 215 143 86 67 39 21
788 606 480 371 332 194 137 77 63 34 17
507 488 396 335 298 192 109 75 56 30 14
366 343 302 278 260 184 102 72 53 27 13
262 253 245 244 206 160 101 62 50 26 13
160 159 158 157 153 124 96 61 45 22 12
141 136 133 126 115 106 75 55 37 20 12
88 87 86 85 84 83 65 46 30 19 11
72 69 68 67 66 59 51 34 23 16 11
58 56 55 54 52 48 40 26 23 16 11
43 41 39 37 34 33 31 25 23 16 10
FANCIES 2.00-2.99
333 251 226 209 164 129 93 65 50 30 19
250 227 185 178 144 125 92 64 48 28 15
215 191 168 157 136 120 87 63 45 25 12
172 158 155 134 125 104 86 62 45 24 11
138 114 110 106 103 90 79 56 45 22 11
100 93 91 84 83 79 71 52 38 21 11
81 76 75 68 67 62 58 45 34 19 10
67 62 61 57 56 53 51 39 29 16 10
56 50 48 45 43 40 37 30 22 15 10
47 46 42 39 36 28 25 24 18 14 10
39 38 36 34 28 26 22 19 17 13 9
178 133 110 97 83 69 63 52 45 29 16
134 122 94 85 78 68 61 50 39 26 15
115 99 87 81 75 67 58 49 37 22 12
89 84 79 78 73 65 57 47 35 20 11
79 69 66 63 60 58 52 38 35 20 10
67 57 56 55 52 51 47 37 32 16 10
53 46 45 44 43 42 40 35 29 14 10
42 39 36 35 34 33 31 28 25 14 9
36 32 30 29 28 27 25 23 16 14 9
32 31 26 24 23 22 16 15 15 12 9
29 28 24 23 19 18 15 12 10 10 8
12-Sep-13 FANCIES 0.90-0.99
FANCIES
IDEX analysis of asking prices for higher-quality diamonds in the international wholesale markets
F
a
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i
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r
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p
o
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i
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b
a
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(
3
6
%

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,

E
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(
2
0
%
)
,

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(
1
8
%
)
,

O
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(
1
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(
9
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H
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(
7
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)
D
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12-Sep-13
D
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FANCIES 1.25-1.49 12-Sep-13
D
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12-Sep-13
D
E
F
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FANCIES 4.00-4.99 12-Sep-13
D
E
F
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N
D
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12-Sep-13
D
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12-Sep-13
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FANCIES 5.00-5.99
12-SEP-2013
699 439 400 320 249 184 121 79 64 36 19
502 362 332 275 231 163 105 71 58 32 16
357 326 271 252 204 152 102 70 51 28 13
292 266 261 214 188 121 101 69 49 25 13
230 218 197 174 144 110 89 59 47 23 12
158 152 149 138 122 97 77 56 39 21 12
137 111 109 100 91 76 66 51 36 20 11
84 83 82 81 73 64 53 43 30 18 10
61 59 58 55 54 46 38 33 23 16 10
52 50 48 45 44 37 33 25 22 14 10
42 40 38 35 30 28 26 24 20 13 9
230 184 156 130 110 93 72 56 46 29 18
179 156 133 118 105 89 71 55 40 26 15
144 128 125 103 97 84 70 54 38 22 12
117 109 100 97 85 78 66 51 38 20 11
99 87 85 81 76 71 63 47 36 20 11
84 75 73 68 64 60 56 42 33 19 10
68 63 58 57 54 52 48 41 29 15 10
54 47 45 42 41 40 39 32 28 14 10
46 37 36 35 33 32 28 24 20 14 10
37 36 34 30 28 27 22 20 18 13 10
33 32 30 29 23 22 18 17 15 13 9
102 80 76 64 56 50 42 39 36 25 13
91 78 65 59 53 49 39 36 34 23 12
85 68 60 56 51 46 38 35 32 20 11
58 57 50 49 48 45 37 34 30 19 11
48 45 44 43 42 41 36 32 30 16 10
46 44 43 42 39 37 34 29 27 15 9
33 32 31 29 28 27 26 24 22 13 8
28 26 25 24 23 22 21 19 16 10 8
26 21 20 19 18 16 15 14 13 9 6
21 19 18 16 14 13 12 11 10 8 6
20 15 14 12 11 10 9 8 8 5 4
166 118 104 83 74 61 49 43 37 25 15
115 107 88 78 71 60 48 40 35 23 14
102 90 81 74 70 59 47 37 33 20 12
77 75 71 69 62 54 46 36 32 20 11
71 61 59 57 54 50 43 34 31 19 10
55 52 50 49 47 43 39 32 28 16 10
45 44 43 41 38 37 35 29 26 13 10
37 36 35 34 32 30 27 25 22 13 9
30 29 28 27 26 25 23 20 16 13 9
22 21 20 19 18 17 15 14 14 11 8
21 20 19 18 17 15 14 11 10 9 8
84
|
he global rough diamond market,
with its high prices and the desire on
the part of miners to maximize proft
through revenues, has hit an unusual
situation the banks that are fnancing
rough diamond purchases have called for a halt to
rising prices and manufacturers inability to polish
these goods proftably.
Of course, the banks did not say this outright,
rather they used the main power at their disposal
halting financing and used it with force. After
analyzing clients borrowing, polished diamond
receivables and rough diamond expenditures, three
important banks, State Bank of India (SBI), ABN
AMRO and Antwerp Diamond Bank (ADB), decided
to limit their clients ability to buy rough diamonds,
specifically those from De Beers.
Ahead of the last Sight, SBI told its clients it would not
give Sightholders credit in order to buy rough diamonds
from De Beers. ABN AMRO told its Sightholder clients
that it was limiting fnancing to 80 percent (and in some
instances to 70 percent) of Sight purchases instead of
giving the usual 100-percent fnancing.
In addition, ADB is currently reviewing its rough
diamond fnancing policies for all frst-hand
buyers those who purchase goods directly from
diamond mining companies, including purchases
from De Beers and Alrosa. Te bank is considering
the implementation of a similar policy to ABNs
decreasing the amount of fnancing.
Te overriding concern among these and other banks
providing fnancing to the global diamond industry
is that diamond manufacturers may become non-
proftable because of the high rough prices and the
difculties frst-hand buyers have in refusing goods
from diamond producers. Tis difculty results
from a combination of contractual obligations and
concerns about appearing weak and unable to pay for
the goods.
Te goal of the banks is to force diamond miners,
specifcally De Beers and Alrosa, to decrease prices
by making it harder for large manufacturers to buy
poli shed
Rough Diamond Market Report
Banks and Traders Try
to Bring About Price Reductions
By Edahn Golan
T
The goal of the banks is to force
diamond miners, specifcally De
Beers and Alrosa, to decrease
prices by making it harder for large
manufacturers to buy goods. Without
the support of the banks, they
must either turn down the diamond
supplies or fnance at least some of
the purchases directly from their own
pocket. Either way, the banks are
decreasing their own exposure.
|
85
|
polished > rough di amond market report
|
goods. Without the support of the banks, they must
either turn down the diamond supplies or fnance at
least some of the purchases directly from their own
pocket. Either way, the banks are decreasing their
own exposure.
Te move, which was quietly welcomed by
Sightholders at the last Sight, has had some short-
term success. De Beers realized that traders
constant grumbling about the high prices was
not a negotiation tactic, and reduced the price of
about two thirds of the diamond boxes. Te overall
decrease, however, was not substantial, estimated at
about 1.5 percent on average.
Boxes that had their prices substantially reduced
include Makeable Cubes -3grs/+7, which was
dropped by about 6.7 percent to $155 per carat (p/c);
the Fine Collection Z 4-8grs, which was ofered for
$1,226 p/c after a 3.8-percent price reduction and 2.5-
4 carats Crystals, which saw its price lowered by 5.7
percent to $2,661 p/c.
At the same time, some boxes saw prices increase
in some cases signifcantly. For example, the price of
the Commercial High 5-14.8 carats box was hiked
by 2.3 percent to $3,657 p/c, and the price of the
Commercial High Select Makeable 5-14.8 carats
was increased a noticable 6.4 percent to $2,540.23 p/c.
Te low price decline comes in addition to the
relatively large Sight. Te total value of the Sight was
estimated at $600 million. By comparison, the June
Sight was estimated at $550 million.
Alrosa, the second-largest supplier by value,
followed suit and lowered prices by an average of
about 3 percent. By doing so, the Russian miner
not only responded to market changes, it did so in a
meaningful way.
Following the June Sight, we quoted a passage from
the Talmud that says, More than the calf wants
to suckle, the cow wants to nurse. We wrote then,
Todays rough diamond market is a good example
of this: the miners want to feed manufacturers rough
more than the manufacturers want to buy it. As a
result, goods are trading at low prices and many
goods are left unwanted.
Today, when not only the Sightholders, but also
their fnancing institutions do not want to back the
goods, miners need to face the realities of the market.
Sightholders tried to delay good deliveries (via the ITO
Intention To Ofer schedule) and bought very little Ex-
Plan, although Specials goods weighing 10.8 carats or
more were ofered and picked up. Tese items are less
sensitive to market demand fuctuations.
Te backdrop to the low demand for rough diamonds
is the sluggish polished diamond market. Te IDEX
Online Polished Diamond Price Index declined 1.9
percent in August, losing nearly an entire percentage
point compared to July.
Another issue causing resistance to rough-diamond
buying is an apparently huge stock of polished,
estimated by some at well over $1.5 billion.
Naturally, with less demand for rough, low demand
for polished and a large inventory on the shelf, the
secondary rough market is reluctant to pay a premium
on top of the current high De Beers and Alrosa prices.
Currently, buyers are willing to pay about list price
for the goods, which means an outright loss for
Sightholders and contracted Alrosa clients.
outlook
With constricted bank fnancing, high polished
diamond inventories and only two months until
Diwali, when the diamond industry in India,
including the manufacturing sector, goes on vacation,
demand for rough diamonds is not expected to show
a signifcant pick up.
If the diamond fnancing banks continue exerting
pressure and manufacturers resist the urge to buy
rough goods, prices of rough diamonds are set to
decline, possibly by a mid-single digit. In such a
scenario, manufacturers will see the possibility of
proftability and may in turn reduce prices of polished
diamonds. Tis could spark renewed interest on the
part of retailers, not to mention a turnover worth
working for. IDEX
86
|
hether we like it or not, human
beings just cannot resist a little
gossip. Since this is the case, lets at
least try to get something good out
of it. Try mixing it into your sales
conversation. Like a pinch of salt in a dish, the right
amount will give it some favour, without it, it will be
bland, and too much will render it inedible. And, the
correct dose will not afect our professional image. So
heres a bufet of did you knows....? about pearls that
will give you something tasty to nibble on:
Te term pearl comes from the Latin pernula,
diminutive of perna, meaning leg, after the
ham- or mutton leg-shaped bivalve. Tats
funny and unexpected, isnt it?
Te name Margaret (in its archaic form,
Margarita) is actually the original Latin word
margarita used to describe the secretory
product of pearl oysters, which we now call
pearl. Terefore, if youre in the mood for
gallantry, calling a girl named Margaret a
pearl is more than appropriate.
Te Latin word margarita is,
semantically, the most appropriate
to defne the pearl: margarita-ae
comes from the Greek margaritus,
which is in turn borrowed from a
verbal expression, which in Sanskrit
means daughter of the sea.
Te association between pearl,
daughter of the sea and Aphrodite,
born of the sea foam (the myth
represented in Botticellis famous
painting Birth of Venus), resulted
in the strong symbolic value of
pearls as an allegory of beauty, love,
sensuality and sexual passion. In
short, its no wonder that there is a
fatal, archetypal attraction between
POLI SHED
A Little Gossip
About Pearls
by Luigi Costantini, Managing Director
Settore Formazione Italia I.G.I. International
Gemological Institute Anversa Belgio
women and pearls. Not only that, the sea is
like a big placenta of life: the originator of
women, who are in turn givers of life.
Margaritarius was the pearl merchant, while
margaritio, in Italian, means a worker in
the glass bead factories of the Venetian
Lagoon, who waits to transform glass or
enamel tubes into beads (also known as
margheritine or conterie).
1
2
3
4
5
Birth of Venus, Botticelli
W
|
87
|
POLISHED > a li ttle gossi p about pearls
|
Tere is a tombstone of Roman/Imperial
age with the commemorative inscription
of a pearl merchant. Te epitaph reads, L.
Valerius Primus negotiator margaritarius
ab Roma (L. Valerio First wholesaler of
pearls from Rome). Lapidary garden of the
Archaeological Museum of Aquileia, the
capital of X Regio Venetia et Histria, one of
the ten most important cities in the Roman
Empire (300,000 inhabitants in the Augustan
period), destroyed by Attila the Hun, currently
a town in the province of Udine, former
mitico Nordest (the legendary, dynamic
entrepreneurial district of north-eastern
Italy). If I were a pearl wholesaler, I would not
hesitate to prepare the same plaque and, who
knows, be remembered forever!
Te ancient Romans were literally crazy
about pearls. A few examples:
a. Gaius Julius Caesar gave a pearl worth
6 million sesterces to one of his many
mistresses (Servilia, mother of the same
Brutus who planted a knife in Gaius
Juliuss stomach, the Ides of March). In
todays money, 1 sesterce would be worth
2, which means he squandered a good
12 million; one could have bought half of
Rome with it!
b. Emperor Caligula, when he named his
favorite horse consul of Rome, gave the
beast a magnifcent pearl necklace. Te
value is unknown, but considering that
they were all natural pearls from the
Persian Gulf, it was certainly not a small
amount.
c. Pompey the Great, at the end of his successful
military campaigns, included among his
trophies as many as 33 crowns of pearl, and
a portrait head of himself, studded with
pearls. It was the year 61 BC. What had got
into Pompey? Was he a pearl-aholic?
Te pearl is the oldest known gem. No doubt
about it; once removed from the oyster, it is
ready made. Tere is no need for processing,
a prt a porter of the good old days!
Queen Elizabeth I would go around adorned
in many, many kilos of pearls, so much so
that the almost contemporary historian
Horace Walpole said that the queen, looked
6
7
8
9
like an idol totally composed of pearls and
necklaces... Such was her love of the gem
that her rule became known as Te Age of
Pearls. Would Freud recognize in this pearly
lust the transference of another type of lust,
the royal virago that made her famous for her
brave, stubborn, unyielding continence? IDEX
Top: Julius Caesar
Bottom: Queen Elizabeth I
B
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f
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S
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1
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!
www.gemworldmunich.com
October 25 27, 2013 P
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Meet the international
Gemworld in Munich !
Where the global industry meets the european market. Join one of
Europes most important gem & jewellery exhibitions in autumn.
Get in contact with industry leaders and new clients from one of the
biggest jewellery markets worldwide. The Gemworld is part of
the Munich Show - the leading show for rough stones and minerals
in Europe. For more information visit www.gemworldmunich.com
and stay updated with the monthly newsletter.
MunichShow_Anz-Gem-IDEX_210x270_4c_1.indd 2 01.09.2013 11:50:05

Financing
in the
DiamonD
inDu$try
by Edahn Golan
90
|
Fi nanci ng i n t he Di amond I ndust r y
Fi nanci ng i n t he Di amond I ndust r y | 91
m
oney makes the world go round,
goes the refrain of a song from the
1972 musical movie Cabaret. Just
as this was true for Sally Bowles,
the character played by Liza Minnelli, it is also true for
the many industries that rely heavily on bank fnancing.
These include the global diamond industry, especially, the
narrow-margined manufacturing sector of the business.
Despite a long history of close cooperation, it often seems
that the diamond industry and its banking partners
are at odds with each other. On one side, diamantaires
regularly request more fnancing at lower cost, while
on the other side, bankers specializing in the industry
feel that traders are living in the past. In the fnanciers
opinion, the diamond sector does not understand that
conditions that once existed are now gone and that new
realities demand a more measured approach.
Talking to both sides traders and bankers reveals
that the heavy dependency on fnancing is creating a
certain level of unease among traders. Some are even
expressing bitterness towards the banks. Bankers, a far
more reserved crowd by nature, are viewing many of
their clients with a combination of criticism over the way
many companies are operating and hope that diamond
frms will adopt new corporate standards.
Every banker we spoke to is in agreement on two
matters: change is needed, mostly in terms of corporate
transparency, and there is actually too much fnancing,
especially when it comes to the Indian banks.
92
|
What WaS iS gone
With a history of some 150 years, the diamond industry
could not have come into existence without the support of
bankers. Te frst wide-scale diamond mine, Kimberley in
South Africa, was dug by small operators working on small
claims. As basic as their tools may seem to us today, many
of the early miners depended on bank loans to pay for their
licenses and equipment.
When Barney Barnato (born Barnet Isaacs, one of the
entrepreneurs who gained control of diamond mining and
later gold mining in South Africa) and Cecil Rhodes started
to buy up and consolidate these claims in the 1870s, once
again, the backing of the banks was needed and provided.
Funding furnished by investment banking frm NM
Rothschild & Sons Limited in 1887 fnanced the formation
of De Beers a year later.
In 1917, when Ernest Oppenheimer founded mining giant
Anglo American plc, he did it with fnancing from J.P.
Morgan, and it was bank fnancing that allowed
him to take over De Beers in 1927.
Until today, polishing factory expansion, rough
diamond purchases, exploration, loose diamond
wholesaling and jewelry manufacturing require
bank credit and loans. Tis is not unusual or
unique to the diamond and jewelry industry.
On the contrary, it is our deposits and savings
with banks that are used to fnance the global
economy from heavy industries and hi-tech to
mortgages and consumer credit. Bank fnancing
is what fuels economic growth through the
development of new infrastructure and facilities
around the world.
In this context, the diamond industry is a
small one. Its few dozen billions of dollars in
annual business are tiny next to the $1.2 trillion
textile industry, and represent but a miniscule
percentage of the $70 trillion global economy.
Partially because of this, only a few banks bother
to specialize in diamonds.
More importantly,
in a world seeking
greater transparency, a
growing understanding
of how borrowers
do business and the
desire to seek safer
investments, banks are
becoming less inclined
to take risks with a
sector that is considered
somewhat opaque
More importantly, in a world seeking greater transparency,
a growing understanding of how borrowers do business and
the desire to seek safer investments, banks are
becoming less inclined to take risks with a sector
that is considered somewhat opaque.
It used to be that diamond banking was based on
several basic assumptions. Prices of rough were
stable, De Beers regulated the market and a smartly
managed operation met its obligations. When a
business failed, indebted colleagues would support
it and allow it to keep operating to ensure its debts
were paid. Tis may be an oversimplifcation of the
proverbial good old days, but in many ways, trust
played a key role in keeping the industry going.
Bankers knew their clients and fnanced them
based on personal judgment.
Today, in the post 2008-2009 fnancial crash era,
heavy documentation of a business dealings is
needed to a much larger degree, and the ratio
between borrowing and assets is much more
conservative. As one banker put it, Its no longer
their reputation that is on the line; now it is ours.
Given this heritage, many diamond traders persist
in expecting change to be minimal and, therefore,
consider the need to adapt to be almost negligible.
Tis stands in direct contrast to how bankers
view changes in their own world and the legal issues that
accompany the evolving landscape.
According to Shlomo Mosseri, frst senior vice president at
Bank Leumi USA in New York City, the fnancial landscape
has changed completely. What was is gone, he says. Te
regulation today is merciless, but diamond traders are living
in denial. Mosseri thinks that substantial change is needed.
He says that banks are subject to tighter regulation and are
therefore more cautious about providing fnancing to any
companies they do not know enough about.
Many diamond traders persist in expecting change to be
minimal and, therefore, consider the need to adapt to be almost
negligible. This stands in direct contrast to how bankers view
changes in their own world and the legal issues that accompany
the evolving landscape
94
|
a neW LeveL oF
tranSparency iS
neeDeD
In many ways, transparency is the name of the game. Te
fnancial reports [that diamond frms submit to the bank]
are not worth anything, said one banker, who requested
anonymity. While he did not want to hurt his banks
relationships with its diamond customers, he bluntly said that
an educational process is needed.
At the heart of these new demands are the Basel II and
Basel III regulations. Tese are a set of banking regulations
drafted by the Basel Committee on Bank Supervision, which
regulates fnance and banking internationally.
Investopedia describes Basel III with great clarity: Basel III
is part of the continuous efort made by the Basel Committee
on Banking Supervision to enhance the banking regulatory
framework. It builds on the Basel I and Basel II documents,
and seeks to improve the banking sectors ability to deal with
fnancial and economic stress, improve risk management and
strengthen the banks transparency. A focus of Basel III is to
foster greater
resilience at the
individual bank
level in order to
reduce the risk
of system wide
shocks.
Te 2008 credit
crisis provided
the fnal push
to draft the
Basel accords,
with Basel III
being the third
accord. Banks are
now required to
maintain proper
Rough-diamond demand, 2008-2023, 2012 prices, US$ billions
Global rough-diamond demand in value terms is expected to grow at a
compound annual rate of 4.2% to 6.4%
2008 2010 2018 2016 2014 2012 2020 2022 2023
6.4%
5.1%
4.2%
30
20
High
Forecast
Base
Low
FIG. 1
Diamond players across the value chain enjoy different margins and face different challenges
FIG. 2
Average
operating
margin
Upstream
Exploration
and
production
Mining
operations
Cutting and
polishing
Rough-
diamond stocks
Polished-
diamond stocks
Jewelry
manufacturing
Retailing
Rough-
diamond
sorting and
valuation
Rough-
diamond
sales
Cutting and
polishing
Polished
diamond
sales
Diamond
jewelry
manufacturing
Diamond
jewelry retail
sales
Middle market Downstream
Number
of players
Key
challenges
Source: Expert interviews; publication analysis; Bain analysis
16-20%
<100 ~5,000 >200,000
1-8% 11-14%
Increasing costs of mining and
exploration
Increasing beneciation
requirements
Maximizing price while ensuring
stability through market price
intelligence and efcient sales
channel set up
Securing
supply of
required
assortment
Traceability
to ethically
mined
diamonds
for Western
companies
Access to rough and ability to sell excess
volumes in long-term contracts
Increasing cost competitiveness in cutting and
polishing
Access to customers (jewelry manufacturers)
Managing beneciation requirements
Securing supply of polished stones
Ensuring nancing of working capital
Source: IDEX Online, Tacy Ltd. and Chaim Even-Zohar; publication analysis; expert interviews;
Bain analysis
96
|
Financi ng i n t he Di amond I ndust r y
leverage ratios and meet certain capital requirements. For
many banks, especially those that provide fnancing to the
global diamond trade, the Basel accords are a game changer.
Te accords set a timeline for minimum liquidity coverage
ratio (LCR), minimum equity and capital conservation
bufers, as well as minimum total capital.
Te Basel Committee on Banking Supervision states that,
Te LCR is an essential component of the Basel III reforms,
which are global regulatory standards on bank capital
adequacy and liquidity endorsed by the G20 Leaders.
Clearly, with the global banking system today required
to have greater liquidity ratios than before and greater
transparency, it is in turn demanding that its clients be
more liquid and transparent as well.
According to Pierre De Bosscher, CEO and chairman
of the executive committee at Antwerp Diamond Bank
(ADB), Basel II and III have created a burden on all
industries, not just the diamond industry. He says the
accords are forcing banks to look closer at the risk
profle of companies, giving it greater weight when
they consider providing fnancing. As a result, fnancing
goes to those companies that meet the new, higher
standards. Tese include full, consolidated fnancial
reports with increased 25-30 percent solvencies, for
example, in contrast with much lower solvency ratios of
10-15 percent a decade ago.
Diamond frms now need to prove that they can meet
this level of liquidity, and doing so requires greater
transparency. One way in which this can be seen is in the
structure of the frm in question, which banks examine
before providing fnancing. Some diamond frms have a very
complicated structure, with a number of their companies
registered in tax haven countries. Banks, De Bosscher says,
prefer a simpler corporate structure, where the fow of
money is clear and understood. We want to see where the
fnancing goes.
Te [diamond] industry is lagging behind other industries
when it concerns corporate culture and transparency, says
Erik Jens, CEO of ABN AMROs International Diamond
Clearly, with the
global banking
system today required
to have greater
liquidity ratios than
before and greater
transparency, it is in
turn demanding that
its clients be more
liquid and transparent
as well
& Jewelry Group, the leading provider of fnancing to the
industry. Also the risk factor is higher and the returns are
too low, he adds. Te risks are higher because of the low
transparency levels, and the returns are lower because of
the ratio between the high capital expenditure and the low
margins. Tis situation may become even worse. Jens sees
margins narrowing further and profts shrinking with them.
Bosscher would also like to see greater compliance on the
part of diamond frms, with higher standards of regulation,
corporate governance and more transparency.
Jens stresses this point repeatedly. We do not provide asset-
based fnancing. It is short-term trade fnance facilities, he
says. Transparency is key. Terefore, companies need to have
the right auditors, good corporate structure and governance,
the right invoicing and payment practices, good world class
administrative systems and so on.
Some companies, he says, are already doing this. Tey are
acting as large diamond and jewelry corporations, not as
diamond companies.
In answer to the question of whether all companies, including
small- and medium-sized enterprises can do this, he replies
that it needs to be in the DNA of the company. It is
expensive, but with greater efciencies, this is possible. An
example Jens provides as a way of reducing cost is shared
manufacturing facilities. Why do manufacturers need such
large factories? Tey can share and outsource [part of ] their
production.
Tere is a good reason for this call for greater transparency
although diamond traders do not always accept it. Traders
provide regular monthly or quarterly reports to their lenders.
Tese reports include a list of debtors, creditors and detailed
inventory make up. With such an intimate knowledge of
operations and fnancials, diamond traders feel that they
already disclose plenty of information. So why are banks
insisting on even more openness?
From a banking management standpoint, the diamond
industry does not have a good reputation. Te diamond sector
is considered higher risk in the eyes of banks when compared
98
|
to other industries. Te issues include anti-money laundering
(AML) principles, the degree of disclosure and even the advent
of lab-made diamonds. With the greater demands imposed by
Basel III, why would a bank want to risk its own standing if it
can fnance industries with better reputations?
Te whole economy is going through huge changes,
not just diamonds. Te entire economy is, and this
impacts on how we work as banks, Jens explains.
Tere is a huge deleveraging. It is happening
everywhere, and the industry, including the banks, has
to rethink the model completely.
Over the years, bankers have run into several issues
with a number of diamond frms. Among these are
companies that fled bankruptcies and businesses
that made sure their debts to the industry were small,
leaving the majority of their debts owed to the banks.
At times, banks looked closely at how their clients
operated and saw that something shady, if not outright
illegal, was going on. In those cases, the clients were
discreetly asked to pay of their debts and end their
business with the bank. Tese cases are not widely
known, so it is unclear how many times they took place,
but the aftertaste clearly lingers, and banks are operating to
minimize their exposure to such instances in the future.
One case that did grab headlines was that of ABN AMRO
and Arjav in December 2012. Arjav had a credit facility with
ABN AMRO that was agreed upon in 2009, re-negotiated
in 2011 and again in 2012. In 2012, Arjav and its principal,
Ashit Mehta, reportedly had a credit facility of $215 million.
Among the terms of the facility were demands that Arjav hire
a chief fnancial ofcer and that it submit detailed monthly
lists on all fnanced receivables.
At the end of 2011, the groups global debts were in the $800
million range with a turnover of $900 million, according to
industry analyst Chaim Even-Zohar. Te 2012 negotiations,
which ended with goods being sealed by the court at ABNs
request and Arjav suing the bank in response, included a
request for an independent business review. It seems that the
continued lack of a CFO bothered ABN. A bank source,
speaking on condition of anonymity, stressed that the review
At times, banks looked
closely at how their
clients operated and
saw that something
shady, if not outright
illegal, was going on
100
|
was not an audit. Tis was the main point of
contention. Te bank insisted on the review, and
Arjav refused, claiming that no other diamond frm
was being asked to submit to such a procedure.
When ABN asked to seal Arjavs diamond stocks in
December 2012, it was responding to the failure of
a company that reportedly owed it $154 million to
become more transparent.
Regardless of the outcome of the ABN-Arjav
confrontation, the moral of the story is that the
rules of the game have changed. Banks simply will
no longer fnance non-transparent businesses.
All we asked for is more transparency, an
ABN source told IDEX Online at the time. To
him, it was a simple matter. Te banking world
has changed in the decade since 9/11, and the
minimum level of disclosure is much higher today
than it was back then.
When IDEX Online frst reported the story, we
wrote: If the industrys leading bank is willing
to close such a major account [$215 million in
fnancing], clearly smaller frms should take note. Tis cannot
be stated more clearly: Independent business reviews will
become a standard component of future credit agreements.
Clients that do not meet the transparency requirements will
fnd it difcult, if not impossible to get bank fnancing. No
doubt, this is a new way of doing business with banks, and the
diamond industry, like it or not, is required to adapt.
It is important to stress that we are talking reputation, not
an indictment against the industry as a whole or traders as
individuals. Yet consider the following: a couple of years ago
a banker revealed that his bank had earmarked a certain sum
of money for fnancing diamond frms. Te bank and his
division had scrutinized applications and provided fnancing
only to those companies that met their high disclosure and
corporate governance standards, as the bank required. Because
many companies did not meet those standards, his division
did not fully utilize the allocated fnancing during that year.
Clients that do not
meet the transparency
requirements will
fnd it diffcult, if
not impossible to get
bank fnancing. No
doubt, this is a new
way of doing business
with banks, and the
diamond industry,
like it or not, is
required to adapt
As the year came to a close, the bank once again considered
how much to earmark to each of the sectors it was involved
with and decided to decrease the allocation to the diamond
sector, based on the past years experience. Tis tale is not just
about reduced fnancing, but also about how the industry is
missing out because many companies do not meet the newer,
more stringent standards.
hoW to aDapt
De Bosscher and Jens say, and many others agree, that the
diamond industry is overleveraged. Te simplest way to view
the economics of a diamond manufacturer is this: Rough
diamonds are bought for cash, that is, an immediate outlay. It
takes a number of months, usually around four or fve, until
the rough is sorted, polished and sorted again as polished
before being sent to labs for certifcation. In the meantime, all
overhead costs, such as machinery maintenance, energy costs,
insurance and property taxes, as well as labor costs are paid
every month, in cash.
Certifcation can take between 10 working days and
two months, and only then are the goods
sold to jewelry manufacturers, retailers and
other diamond traders. Credit terms in this
stage are anywhere between 30 and 90 days.
Manufacturers do not see their expenditure
repaid for fve or six months and sometimes as
long as eight months after their initial purchase.
To allow this scenario to work, manufacturers
need fnancing, and this fnancing is what allows
them to pay everyone throughout the process.
Compounding this hardship, manufacturers are
facing rising rough diamond prices and stable-
to-shrinking polished diamond prices.
No wonder they want greater fnancing. And no
wonder banks are increasingly cautious, looking
deeper into diamond companies fnancials. Tey
see that the mid-section of the diamond pipeline
is squeezed in this economic model.
102
|
Te quest for more money comes from a need to increase
volumes, says Jens. Te need for higher volume is a result
of lower margins. But there is too much money, which is
causing rough prices to be high, while proftability is down.
Financing needs to be down too, Jens continues.
Dont forget the huge overhang in polished goods. Lets
focus on those and also the end consumer, who is buying the
product, and start from there to rethink and reengineer the
value chain.
Tis needs to be explained. Owing to low margins, the
diamond business is mostly a game of volume. Te banks are
worried that additional fnancing will be used to pay for rough
Rough-diamond demand, 2008-2023, 2012 prices, US$ billions
Global rough-diamond demand in value terms is expected to grow at a
compound annual rate of 4.2% to 6.4%
2008 2010 2018 2016 2014 2012 2020 2022 2023
6.4%
5.1%
4.2%
30
20
High
Forecast
Base
Low
FIG. 1
Diamond players across the value chain enjoy different margins and face different challenges
FIG. 2
Average
operating
margin
Upstream
Exploration
and
production
Mining
operations
Cutting and
polishing
Rough-
diamond stocks
Polished-
diamond stocks
Jewelry
manufacturing
Retailing
Rough-
diamond
sorting and
valuation
Rough-
diamond
sales
Cutting and
polishing
Polished
diamond
sales
Diamond
jewelry
manufacturing
Diamond
jewelry retail
sales
Middle market Downstream
Number
of players
Key
challenges
Source: Expert interviews; publication analysis; Bain analysis
16-20%
<100 ~5,000 >200,000
1-8% 11-14%
Increasing costs of mining and
exploration
Increasing beneciation
requirements
Maximizing price while ensuring
stability through market price
intelligence and efcient sales
channel set up
Securing
supply of
required
assortment
Traceability
to ethically
mined
diamonds
for Western
companies
Access to rough and ability to sell excess
volumes in long-term contracts
Increasing cost competitiveness in cutting and
polishing
Access to customers (jewelry manufacturers)
Managing beneciation requirements
Securing supply of polished stones
Ensuring nancing of working capital
Source: IDEX Online, Tacy Ltd. and Chaim Even-Zohar; publication analysis; expert interviews;
Bain analysis
diamonds, for which there is alwas strong competition to
obtain. Te race after rough diamonds drives up their prices.
Altering this model requires changes to the fnancial fow
structure of companies at both ends of the diamond pipeline
mining companies and retailers. But will miners be willing
to sell rough diamonds on credit? Tat is hard to imagine.
Te chances are better that manufacturers will shorten credit
terms to retailers. In fact, this process occurred in 2008, with
companies providing much shorter credit lines to their clients.
However, this is slowly returning to longer credit periods.
Tere is another option reducing the price of rough
diamonds. A number of banks have decided or are
considering taking steps to reduce their fnancing of rough
diamond purchases. Tey can do this in specifc places, such
as in fnancing Sightholders purchases from De Beers. Tis
is a new approach on the part of the banks, and bankers are
hesitant to discuss this publically. Nevertheless, it seems
that at least three important banks, including ABN and
ADB, will in one way or another try to limit rough diamond
purchases from the main producers in a drive to lower rough
diamond prices.
However, this is only short-term relief. Structural changes,
in the form of consolidation, are the option bankers prefer,
especially if this includes going public. Tere are only a few
public diamond companies in the industrys mid-section,
and one of the advantages they have is access to other
sources of funding.
Banks see that only a few companies meet the compliance
and disclosure levels that make it easier for them to provide
fnancing, not to mention increasing that fnancing. Tese
companies are typically vertically integrated and audited
on a quarterly basis by securitized standards. Tis is what
banks want to see in their clients. Such frms carry another
advantage size. Larger frms have the advantage of scale,
which reduces their costs.
Leumis Mosseri sees another driver for consolidation:
fragmentation. Te market is much more fragmented, he
says, meaning not only that there are too many traders in the
market, but also that a company needs to supply more types
It seems that at least three
important banks, including
ABN and ADB, will in one way
or another try to limit rough
diamond purchases from the
main producers in a drive to
lower rough diamond prices
104
|
of goods to many stores in diferent geographic markets.
To meet this need, diamond frms have to maintain a large
inventory, which requires more fnancing. To compete in
such an environment, one that requires heavy auditing, large
inventories and a broad spectrum of operations, size and
fnancing is required.
a matter oF coSt?
We are providing you with greater fnancing, so you can
fnance smaller frms, said the CEO of a bank, according
to a De Beers Sightholder. Tis statement encompasses a
number of the issues that the diamond industry is facing.
First, and not so obvious to outside observers, diamond
frms in the mid-section of the industry have been forced
to become fnancing bodies of downstream operations, as
the economic structure we described earlier shows. It has
become the expectation of the banks, at least in this case,
that this trickle-down system continues. Of course, it is not
a viable economic model.
Te statement also discloses banks preferences for working
with larger companies rather than with smaller or mid-
size frms. According to more than one research study into
banking profts, however, many small operations have proven
to be more proftable for banks than bigger ones, which
raises the question of why there is this preference towards the
bigger frms.
Basel III, once again, is part of the answer. Te increase in
regulation has led to an increase in personnel. Te banks are
hiring more people to deal with the increased bureaucracy,
according to Mosseri and De Bosscher. Because of the banks
higher costs due to regulatory requirements that also mean
a bigger workforce its less worthwhile to fnance small
companies, and that leads to consolidation, says Mosseri.
It is not known how much a customer truly costs a bank, or
even how much more it is costing with the new regulations.
Banks are keeping their costs cards close to the chest.
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annuaL Financing
$15 BiLLion
Te level of fnancing of the global diamond industry
is estimated by the bankers we spoke to at about $15-
$16 billion. Tis includes most of the diamond pipeline,
from mining and exploration eforts through polishing
to wholesaling and at least part of diamond jewelry
manufacturing.
India is by far the largest lending center, using about
$7-$8 billion in credit and fnancing facilities according
to one estimate, and about $5-$6 billion according
to another. India is also where most of the growth in
fnancing is taking place, mainly because of the expansion
of the Indian sector of the trade and the large number of
banks involved in the diamond industry there. One of the
bankers we spoke with pegged it at 55-60 banks.
With the exception of Botswana, the new home of De
Beers sorting and selling operations, India is probably the
country with the largest growth in diamond operations.
Tere is a lot of grumbling in the diamond centers about
the fnancing that Indian frms enjoy, with a desire to
see banks in other centers provide similar fnancing. In fact,
the fnancing that diamond frms in India beneft from is
diferent in many ways to the kind of fnancing that traders
and manufacturers in Belgium or Israel receive.
While in Belgium and Israel traders deal mainly with banks
that specialize in, or even deal nearly exclusively with, the
diamond industry and receive fnancing on the merits of
their business and abilities, in India, the government is
behind the fnancing.
Some years ago, the government of India decided to
encourage exports from the country - not just of polished
diamonds, but of all goods, including textiles, petroleum
products, software and much more. It passed a law requiring
Indian banks to earmark a percentage of their credit to
fnance exporters. Tis fnancing is available at a reduced
rate and in US dollars. Inevitably, some of
the Indian banks chose to support diamond
exports.
While in India most of the fnancing is against
exports, in Antwerp, fnancing provides
working capital and asset-backed inventories
(such as fnancing rough purchases at De
Beers Sights), yet most of the fnancing, nearly
80 percent of it, is against receivables, which
is estimated by Antwerps bankers at about
$1 billion annually. Financing provided in
Antwerp to diamond frms is about $2-$3.5
billion, according to estimates.
Te country that seems to be in the toughest
predicament is Israel. Not only are fewer
banks fnancing the local industry (see the
following section Some are Leaving, Others
Joining), the center that once used to be the
worlds largest exporter of polished diamonds
is sufering from shrinking activities and a
decrease in manufacturing. On top of this,
a series of crackdowns by the tax authority
and police investigations into fnancial crimes
have caused traders from other centers to
decrease their dealings with Ramat Gan.
Not only are the Israeli traders sufering from a decline,
the cost of fnancing and banking activities is rising. Banks
in Israel are generally expensive. Israeli banks have a wide
range of additional sources of revenues from their business
(and private) clients, mainly from activities in the accounts.
Tis is proving to be a very lucrative source of revenue for
the Israeli banks, namely Bank Igud (Union Bank) and IDB/
Discount Bank. Tese additional revenues include export fees
and check deposits that, according to one banker, are a huge
source of income. He emphasized the word huge more than
once in our discussion.
Generally, most of the fnancing in the US is against sales,
with less than a third of the fnancing against inventory.
Tis was one of the lessons of the 2008-2009 fnancial crash.
With the value of inventory declining, banks found that they
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|
had less collateral by value against the money they supplied.
Tat required frms and frm owners to provide banks with
additional collateral, repay some of their debts, or reduce their
credit. Tere was a positive outcome to this crunch. Te level
of debt decreased, and with it, the associated costs.
Tere is little if any asset pledged as collateral as part of
many fnancing agreements. However, a personal guarantee
by company owners or a corporate guarantee exists nearly
without exception. Tis personal guarantee, which is
unlimited, means that in case of a default, the bank will go
after the personal assets of the guarantor or guarantors.
From a banks perspective, sales invoices
are the collateral they are working with;
fnancing is provided against sales.
Tis is typical trade fnance: revolving
credit, short-term, uncommitted and
self-liquidating. In this context, self-
liquidating means that the fnancing
is not a loan with monthly payment
terms, but credit that is used to buy
rough and fnance the manufacturing
phase and certifcation up until the
diamond is sold and an invoice is
issued. Tis is a lot for the bank to
track, hence, the high cost of fnancing.
Some are
Leaving,
otherS
Joining
With so many bankers talking about their
rising costs, reputational issues and even a
shrinking diamond sector, some banks are
looking to end their association with the
diamond industry and to stop supplying
it with credit, loans and other fnancing.
In Israel, Bank Leumi has made that decision and will
no longer service the Israeli diamond sector.
However, the bank will not end its activities in the
US, where Bank Leumi USA continues to work with
the diamond and jewelry sector.
Standard Charter Bank is a relatively new player
in the arena. According to some traders, Standards
entrance into the market infused some $500 million
in 2011, which is viewed today to be partially
responsible for the runaway prices in the frst
half of that year. Tose higher prices proved to be
unsustainable and in August 2011, prices of polished
diamonds declined sharply. Today, the bank is
supplying an estimated $1.5-$1.6 billion in fnancing.
Standard is aiming to supply frms with vertical
fnancing e verything a company needs from buying
rough, through manufacturing to jewelry making.
Te idea is to consolidate tracking of a diamond
groups dealings, even if it goes through multiple
companies in the group. Bankers feel that this is a
wise model, particularly if they are the sole fnancing
supplier. Tis will prevent, to some degree, money
from leaking into other operations and will give
the banks a better understanding of a frms operations and
fnancial health. Diamond traders, of course, see this idea
diferently. To them, such a demand from banks means they
are digging too deeply into their own pockets and creating
excessive dependency on a single source of fnancing.
Not leaving the industry, but possibly facing major changes
is Antwerp Diamond Bank (ADB). Te bank, owned by the
KBC banking group, has been on the block for several years.
KBC itself is rumored to be for sale, and apparently, it wants
to fnd a buyer for ADB beforehand.
Over the past couple of years, a number of serious inquiries
have been made and talk in the banking community is that a
fund headquartered in the Persian Gulf almost bought ADB
recently. Why the deal, and others, never materialized is
unknown. What is important to keep in mind in this context
is that a buyer may want to shift the focus of the bank to
With so many
bankers talking about
their rising costs,
reputational issues
and even a shrinking
diamond sector, some
banks are looking to
end their association
with the diamond
industry and to stop
supplying it with
credit, loans and other
fnancing
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|
other industries or initiate other changes that may infuence
the banks fnancing of the diamond sector.
Contrary to the diamond industrys desire to see an
increase in fnancing, the banks want to decrease the
fnancing. According to Jens, Tere is too much fnancing
and not enough banks. But to bring in more banks, more
transparency, more corporate culture and DNA is needed. Its
a magical circle, no?
Until more banks come in and relieve the pressure, ABN is
reducing its exposure. Although Jens did not want to state by
how much or at what rate, it is reasonable to expect a possible
reduction of $2-$3 billion in the overall fnancing of the
diamond industry over the next few years.
are there
aLternative
SourceS oF
Financing????
In the past fve years, following the 2008-2009 fnancial
crash and credit crisis, fnancial institutions of all kinds
investment frms, funds and banks have played with the
idea of investing in diamonds. Most of the
ideas, in one form or another, considered
purchasing diamonds and holding them
as a hedge against other investments, such
as the stock market. Diamond prices are
uncorrelated to other leading indicators
and are fairly stable, which makes them an
interesting option for investment.
In the fve years that have passed and in
spite of the many initiatives that have been
considered, very little has actually happened
in terms of major investment by fnancial
institutions in diamonds. Te idea is still
alive and some initiatives, such as IndexIQs
diamond fund, are still being worked on.
There is too much fnancing
and not enough banks. But
to bring in more banks, more
transparency, more corporate
culture and DNA is needed.
Its a magical circle, no?
(Currently IndexIQ is awaiting
the approval of the Securities and
Exchange Commission in the US).
Whatever form such a future
initiative may take, the industry will
be able to beneft from the infusion
of cash that it will bring. In the
case of an Exchange Traded Fund
(ETF), such as those that IndexIQ
and GemShare are proposing, a
large quantity of diamonds will be
purchased. Tis in itself will provide
a shot of money into the industry.
As long as diamonds continue to
be bought (and sold) within the
fairly narrow defnition of goods
the ETFs plan to work with, and
large investment houses buy the
ETFs shares, money will keep
fowing into the diamond industry
from fnancial institutions. Tis
should expand the current scope of
diamond clients.
De Bosscher, whose Antwerp
Diamond Bank at some point
seriously considered introducing a
diamond fund, believes that only
an ETF format of commoditization is a viable one. He voiced
one concern about the idea. Te biggest danger is if prices
decline and then investors will start to dump goods [onto the
market]. Tis is a concern shared by many in the diamond
market. Because this market is fairly small, which helped it
weather the 2008 crash, ther are fears that a large of-loading
of polished diamonds onto it during a period of price declines
would result in further price declines and an exasperated
hardship on traders. No one wants to see the value of their
inventory declining because of jittery fnancial analysts on
Wall Street.
I love every initiative that encourages transparency, Jens
states, Funds will bring more liquidity to the market, but
price volatility will increase, which is okay, not necessarily
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|
bad, provided the sector can develop instruments with which
one can hedge certain volatility.
Investment in diamonds does not have to be limited to
polished diamonds. De Bosscher says that although he has
not seen yet any funds that are a success, a rough diamond
futures market is an option, based on sealed De Beers boxes
to ensure consistency.
He also did not rule out a futures market for polished, which
in his opinion is an interesting option. Te catch is how
investors will know the prices of diamonds.
Jens agrees, saying that with a known price of diamonds, a
futures market would be possible and would allow traders to
hedge as well as increase liquidity.
In the case of gold or other commodities, the price is set and
settled openly and daily at various exchanges, such as at the
commodity exchange in Chicago. Tis brings us right back
to the issue of transparency again. In a transparent market,
the price of diamonds, especially polished ones, is known
and public.
To issue a publically known price of polished diamonds
that would allow a futures market for them, a spot price is
needed. Tis price represents how much a polished diamond
of a specifc category (4Cs, a certain gemological laboratory
certifcate, cut grade, etc.) is sold for cash payment on any
given day. It, in turn, requires a trading platform such as the
Chicago Mercantile Exchange to generate this data daily.
De Bosscher and Jens do not say it, but a level of transparency
of this kind does not currently exist. One initiative that is
actively promoting this efort is IDEX Onlines Guaranteed
Diamond Transactions (GDT). Currently, the platform
generates spot market prices precisely of the kind the bankers
are asking for, however the company is not publishing this
data yet. IDEX Online does supply the market with extensive
asking price data used, among others, to create the IDEX
Online Polished Diamond Price Index, and the IDEX Online
Price Report.
Mosseri is less optimistic about the possibility of introducing
diamond funds or a futures market. Diamonds are not like
a gold nugget, and commoditization is not
possible, he says. [Diamonds] are intended
for trading and beauty, not for being kept
inside a vault.
Asked what message he would like the
diamond industry to hear from its bankers,
Jens concludes, Tere is too much leverage,
too much is paid for rough, those frms that
become corporate are preferred, and that is
key. It is the responsibility of all to adopt
new standards.
BankS are the
neW market
cuStoDianS
Sometimes banks are not just a diamond
traders best friend; in at least one instance
they have also been lifesavers. A case in
point was when the banks, in responding
to the high rough prices to which many
diamond manufacturers succumbed against
their better judgment, helped out the
industry by reducing the fnancing of rough
goods.
Since the beginning of this year, rough
diamond prices have risen to outrageous
heights. De Beers increased prices by 6
percent with many of the other diamond
miners also increasing rough prices in this
period. At the same time, polished diamond prices remained
largely fat, rising by about 1.5 percent from January to June.
In a market where manufacturing margins are in the low
single digits, (3-4 percent at best), the diference between
the quickly rising rough diamond prices and the almost-
fat polished diamond prices is the diference between low
proftability and no proftability.
114
|
According to multiple opinions, De Beers CEO
Philippe Mellier feels that as long as Sightholders are
willing to pay the price, complaints that prices are too
high are just idle chatter after all, they keep buying.
According to one source, Mellier told a Sightholder
who complained about high prices that he should
leave the goods on the table because there are always
at least two or three others who would be willing to
take them.
If the De Beers CEO feels that in such a situation
one in which goods are left on the table because current
prices are too high a seasoned and carefully selected
client should lose its Sight, then there is a fundamental
breakdown in the long-term relationship between the
industrys largest supplier by value and its clients.
Tis needs some explanation: Sightholders are
concerned that if they turn down items, they risk
losing their Sight. Terefore, they may buy goods, even
though it may not be an economically sound decision,
just to prevent a negative efect on their supply down
the line. Others buy pricy goods and attempt to
receive them in the future in the hope that they will
become more economical. For them, the purchase is an
investment not a vote of confdence in the price.
the neW
cuStoDianS? take
action on
manuFacturerS
BehaLF
Just a little bit more history. In October 2008, at the
outbreak of the global economic meltdown, individual Indian
manufacturers did not want to harm their positions by telling
the DTC that they could not buy their allocations. Rather
than being singled out, they enlisted the Indian industry
umbrella organization, the Gem and Jewellery Export
Promotion Council, which acted as a representative
of the Indian industry, and declared a ban on rough
diamond imports in November of that year. In this
way, no single company stood out as a naysayer.
Tis situation, in which clients of the large miners
want to turn down goods but feel that they are
unable to do so for their own security, has returned.
Tis time around, however, the issue is the
imbalance between rough and polished prices.
Enter the banks. Tese institutions, already worried
about their clients low proftability, decided to
take action and limited traders access to rough
diamonds by reducing collateral base fnancing for
rough diamond purchases. What this means, in
simple terms, is that they are providing less money
with which to buy rough.
ABN AMRO, the industrys leading fnancing
bank, informed at least some of its clients that it is
reducing purchase fnancing to 7080 percent and
might even tighten other terms and conditions going
forward. ADB is also interested in reducing collateral
base fnancing for rough diamond purchases. And
the State Bank of India (SBI) announced on August
21 that it had stopped fnancing purchases.
As a bank, our biggest concern is indeed the
lack of proftability of the
midstream companies that
we are fnancing. And it
is not our goal to fnance
our future NPAs [Non-
Performing Assets], a
banker wrote recently in an
email.
Given the situation, banks
are now being increasingly
picky not just about who
gets loans, but also the
reason for the loans in a bid
to decrease their exposure.
This situation, in which clients of the large
miners want to turn down goods but feel
that they are unable to do so for their own
security, has returned. This time around,
however, the issue is the imbalance between
rough and polished prices
116
|
Are banks the new custodians of the diamond market? It
certainly appears that they have taken over De Beers old role.
At the very least, they are doing the industry a big favor by
forcing the manufacturers hand to limit purchases, which is
also a de facto vote of no confdence in the miners approach
to price-hiking policies.
price reDuctionS
aheaD?
At any rate, it seems that this message is beginning to be
received at De Beers albeit very slowly. At the Sight in late
August, right after the banks started to take these steps, the
prices of about two-thirds of the boxes were reduced, some by
as much as 5 percent. Overall, however, the decline was a very
low 1-2 percent, less than what manufacturers need to get
back to business, although it is a step in the right direction.
It remains to be seen if prices are further reduced, how long
they will be lowered and if Alrosa will follow De Beers lead.
For now, the industry should count its blessings; thank the
banks for being the responsible adults in the current situation,
and take advantage of the window of opportunity to cool
down rough purchases.
a Look aheaD
Te diamond industry is in fux. Te changes seem to be
increasing and the once easygoing industry is now seeing
major changes occurring. Basel II and III, as mentioned
above, are among them, as is the drive to form new fnancial
funds and ETFs that are based on diamonds. All of these, in
turn, call for greater transparency in a number of ways, most
notably in corporate reports and prices.
Tere is another change that all bankers we spoke with
felt necessary to mention: Te move of De Beers sales
department to Botswana and changes in the prominence of
some of the diamond centers because of this move.
De Beers sorting center has already moved from London to
Gaborone, the capital of Botswana, and the sales department
Are banks the new custodians of
the diamond market? It certainly
appears that they have taken
over De Beers old role. At the
very least, they are doing the
industry a big favor by forcing
the manufacturers hand to limit
purchases, which is also a de facto
vote of no confdence in the miners
approach to price-hiking policies
118
|
is busy with the fnal stages of moving. After more than 100
years of Sights taking place in London, the frst international
Sight to be held in Gaborone is scheduled to take place in
November.
One of Antwerps advantages is its relatively close
proximity to London. Te move to Africa is expected to
have a negative impact on the Belgian diamond center.
How big a change is of course difcult to predict, but
the bankers agree that some decline will take place. Te
sentiment was similar for the Israeli diamond center in
Ramat Gan, which saw its international trade decline in
the years following the 2008 crash.
Tese centers will need to fnd ways to re-invent themselves
and develop new business. As mentioned already, Bank
Leumi in Israel no longer plans to fnance diamond frms.
Should a further decline in the Israeli center take place, would
it mean that Union Bank, the countrys leading diamond-
fnancing bank, would also decrease its involvement with the
industry? If so, would this situation give rise to new banks to
seize the opportunity and enter the arena?
While these two centers are facing growing challenges, in
the United Arab Emirates, a new center is rising and seizing
opportunities. Activity at the Dubai Diamond Exchange
(DDE) is turning the tiny country into a sizable player, at
times at the expense of the other centers. Here, too, new
banks have a chance to enter the diamond industry and
supply additional funds.
More than anything else, the few diamond fnancing banks
are interested in seeing more banks enter the game. From
their perspective, there is too much fnancing and not enough
banks. Tey want to see their large dependency on a single
industry decrease, and the industry can only beneft from
the competition they may enjoy if they have more banks to
choose from.
Te caveat it is not enough to have rising centers to create
new opportunities for banks. Better reporting standards, a
better reputation and larger profts are needed to attract more
banks. Te road to that destination is currently being paved.
More than anything else,
the few diamond fnancing
banks are interested in seeing
more banks enter the game.
From their perspective, there
is too much fnancing and not
enough banks
w
w
w
.
i
d
e
x
o
n
l
i
n
e
.
c
o
m
COMMISSION - FREE
TRADING ENVIRONMENT
DIAMOND
TRADING
& PRICES
INDIA
+91-22-612-73333
USA
+1-212-382-3528
BELGIUM
+32-3-234-1157
ISRAEL
+972-3-612-8995
TM


And more
|
123
Botswana Diamonds
and Alrosa Units
Sign Exploration
Deal
Botswana Diamonds has announced
a joint venture for the exploration
of diamonds in Botswana featuring
technology developed by Russian
miner Alrosa, which will be used in
Botswana for the frst time.
Te agreement was signed by Atlas
Minerals (Pty) Ltd. (Botswana), a
wholly owned subsidiary of Botswana
Diamonds, and Sunland Holdings
SA (Switzerland) a wholly owned
subsidiary of OJSC Alrosa of Russia.
Te agreement requires equal
contributions from each party.
Te joint venture will utilize the
exploration technology available to
Sunland with the on-ground expertise
and extensive diamond database held
by Botswana Diamonds.
Applications have been lodged for
licenses in the Orapa region. Te frst
ground has been obtained, and work
is expected to commence with an
initial budget of $1 million.
We have already been working
together for over 18 months on
selecting the best ground in the Orapa
and Gope areas of Botswana and we
have multiple targets, said Botswana
Diamonds chairman John Teeling.
More diamond deposits remain to be
discovered in Botswana. Te unique
technologies being brought to bear
on the Kalahari sands improves the
chances of success.
Illegal Mining
Continues to Affect
Richlands Result
Gemstone miner and developer
Richland Resources Ltd said that
illegal mining at neighboring mines
had severely afected its results in the
frst half of the year. Te company saw
its revenue drop from $8.4 million in
the frst half of 2012 to $7.5 million in
2013.
Diamond Sorting at the DTC Botswana
Image: De Beers
OCT
2013
Mining
124
|
|
mining > news
|
Te tanzanite miner said that large
areas of known high grade zones
were inaccessible due to violence
associated with illegal miners. In a
bid to combat this activity, Richland
said it had received government
assistance in removing illegal miners
in the northern part of its license
area.
During an operation to clear one of
these areas, a Richland employee was
shot dead by illegal miners.
Mining in these now-reclaimed areas
is due to restart in the fourth quarter
of 2013 while removal of illegal miners
in the southern part of its license area
is due to begin shortly.
Te period saw our investments
in deriving increase value from
extracted colored gemstone marred
by the on-going break down in local
security at the tanzanite mining
areas in Northern Tanzania, said
Richland CEO Bernard Olivier.
Sub-surface tunneling into some of
Richlands most prospective mine
areas and increasing violence, led us
to a situation where the companys
clear responsibility was to evacuate
contested areas for workforce safety
on and of the mine.
Canadian
Government
Renews Geo-
Mapping Program
Canada is renewing its Geo-
mapping for Energy and Minerals
(GEM) program, with a $100 million
commitment over seven years from
the federal budget. Tis follows on
from a previous allocation of $100
million over fve years from the
federal budget in 2008.
Te increased reliable geological
information is aimed at helping to
increase investment from companies
conducting exploration, including
diamond exploration companies.
Canada also has gold, rare earths,
copper, zinc and lead deposits.
Mineral exploration is like looking
for a needle in a haystack, said Pierre
Gratton, president and CEO of the
Mining Association of Canada (MAC).
Tis continued investment in
surveying will help the industry better
determine where mineral deposits
are located and ultimately where the
next generation of Canadian mines
can be developed.
Te minerals industry plays an
important role in facilitating northern
development, with GDP contributions
in the Northwest Territories and
Nunavut of 24.2 percent and 26
percent, respectively. In 2012, these
areas attracted nearly $450 million in
exploration investment.
Tere is great interest in Canadas
northern mineral potential, and the
GEM program is critical to mapping
out mineral opportunities in a region
where geoscience knowledge is
currently lacking, added Gratton.
Te GEM program renewal follows
skills training announcements from
Prime Minister Stephen Harper
during a recent northern tour. Tis
includes $5.8 million over two years
to support the Northwest Territories
Mine Training Society for a new
mining sector-skills training program
in the Northwest Territories and in
the Kitikmeot region of Nunavut.
Harper also announced support
for the creation of a new Centre for
Northern Innovation in Mining, a $5.6
million investment over four years.
Both programs aim to help aboriginal
peoples and northerners obtain the
training and skills required for well-
paying and highly-technical positions
in the growing mining industry.
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mining > news
|
Aboriginal Groups
Asking Government
to Reject Plans for
Gahcho Kue
Tree aboriginal groups in Canadas
Northwest Territories are calling
upon the federal government to reject
the territorys latest diamond mine
Gahcho Kue in its current format.
Te project, a 51-49 percent joint
venture of De Beers and Mountain
Province Diamond Inc., passed
an environmental review in July.
However, the three aboriginal groups
Lutsel Ke Dene, the Yellowknives
Dene, and the Tlicho government
say the companys plans to reduce the
impact on the environment are not
good enough, according to a report
by CBC news.
De Beers and Mountain Province
Diamonds are proposing the drainage
of the southern part of Kennady Lake.
Critics say the review does not
address their concerns about water
quality, caribou or the future of
Kennady Lake after it is drained for
mining. Tey also say there is no clear
beneft to people in the area.
Tey are asking the minister of
Aboriginal Afairs and Northern
Development to order a further
review on the project.
Renard Mine Road
Opened to All-
Season Traffc
Stornoway Diamond Corp announced
that the Renard mine road has been
opened to all-season vehicle trafc
for the frst time. Te road is currently
only open to construction vehicles.
All four road construction segments
of the road and the Route 167
extension that are under construction
by Stornoway and the Quebec
Ministry of Transport have now
been connected, allowing the full
transit of construction vehicles from
Temiscamie, at the end of the existing
public highway, to the Renard project
site 240 kilometers to the north.
It is now possible to drive directly
to the Renard project by permanent
road. Te connection of each
construction segment has been
achieved two months earlier than
expected, and well ahead of the fourth
quarter 2013 schedule established
when construction of Stornoways
portion of the road began in April. We
are also forecasting fnal completion
of the Renard mine road within
budget, said Stornoway president
and CEO Matt Manson.
Te Renard project is now permitted,
connected by road and ready to build.
Te projects large mineral resource
and its extensive exploration
upside,ofers a project producing up
to two million carats of diamonds per
126
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mining > news
|
year and projected annual revenues
of up to C$450 million per year within
its initial 11-year mine life. Project
fnancing discussions with lenders
and prospective investors are ongoing
and progressing well, with a view to
frst construction mobilization prior
to the end of 2013.
Lucara Raises
$24.7 Million at
Exceptional Stone
Tender
Lucara Diamond Corp. raised $24.7
million at its second Exceptional
Stone Tender. Te special tender of
Karowe diamonds consisted of 16
single stone lots, with an average sale
price of $24,026 per carat for a total of
1,028 carats.
Te highest value stone was a
135.4-carat diamond, which sold
for $6.37 million, with three other
diamonds selling for more than $2.5
million each.
Tis sale demonstrates that the
market remains very strong for large
and exceptional diamonds adding
signifcantly to the value of Karowe
Mine, which continues to outperform
expectations, said Lucara president
and CEO William Lamb. We could
not be happier with the result.
Lucara will hold one regular tender
during the third quarter in which
80,000 carats will be on sale, including
more than 30 single stones larger
than 10.8 carats.
Te companys two key assets are
the Karowe Mine in Botswana and
the Mothae Project in Lesotho. Te
100-percent owned Karowe Mine is
in production. Te 75-percent owned
Mothae Project has completed its
trial mining program.
Namibias Diamond
Output Slipping in
2013
Namibias diamond output in 2013 is
likely to show a slight decline to 1.64
million carats, down from 1.67 million
carats in 2012, according to the Bank
of Namibia. Namibia is the ffth-largest
diamond producer in the world.
Total mining output will decline
by 0.9 percent this year from
12 percent last year owing to
developments in diamond and
uranium production, the central
bank said in comments cited in
The Southern Times newspaper.
However, diamond production
will rise by 2.5 percent next year,
boosted by marine mining, the bank
said in an economic outlook.
Te diamond industry continues to
operate at near capacity, as onshore
production continues to wind-
down, reducing production over
the medium term, the central bank
said. Ofshore production is, thus,
Diamond from the Karowe Mine (illustration)
Image: Lucara Diamond Corp.
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127
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mining > news
|
Referring to the signing of a loan
deal in January with Tifany & Co. for
$4 million, Loudon said the period
also marks the start of a long-term
association with Tifany, which will
allow the retailer access to a new
supply of diamonds that both meets
its quality standards and allows for
increased traceability from source to
end user.
DiamondCorp reported a widening of
its net loss for the six months to June
30 to $3.4 million from $2.4 million a
year before. IDEX
expected to continue to be the main
source in total diamond extraction.
Namibia is the worlds biggest miner
of ofshore diamonds.
Lace Mine on Track
to Produce 500,000
Carats Annually
From 2015
DiamondCorp reported its results for
the frst half of the year, saying that
its Lace mine will produce 500,000
carats of diamonds per annum for
more than 25 years starting in 2015.
Underground mine development
began at its Lace mine in South
Africa in the frst quarter of this year
and remains on schedule and within
budget for production to start in the
frst half of 2015.
CEO Paul Loudon said, Te mine is
expected to produce up to 500,000
carats of diamonds per annum for
over 25 years commencing in the
frst half of 2015, and heralds the
transition of DiamondCorp from
explorer to diamond producer.
News Round Up
London-Listed steLLar diamonds pLc has BegUn
begun bulk sampling at its Tongo project as part of
the planned feasibility study of the 1.1-million carat
resource at Dyke-1. Stellar says it intends to drill, blast
and process approximately 2,000 tons of kimberlite
from the previous bulk sample site on Dyke-1. Bulk
sampling has yielded some 1,150 carats. The Tongo
project has a current JORC compliant inferred resource
of 1,074,000 carats at a grade of 120cpht and modeled
average diamond value of $248 per carat giving an in-
situ value of $298 per ton of kimberlite ore.
rockweLL diamonds inc. has given an Update
on its aim of increasing monthly production volumes
in the Middle Orange River region to 500,000 m3 per
month in a bid to improve quarterly earnings through
the increased recovery of large, high-value diamonds.
The miner has built two new mines, the Saxendrift Hill
Complex, which is in production, and Niewejaarskraal,
which is in production ramp up, as a key part of the
new plan. The company invested $3.6 million for the
development of the two mines.
mozamBiqUe has signed an agreement with
Angola for the transfer of information relating to
diamond mining. The agreement followed a visit to
Mozambique by Angolas Minister of Geology and
Mines, Manuel Queiroz. Although there are diamonds
in Mozambique, which sits to the north of Sough
Africa, little is known about their quality and the
country wants to fnd out exactly where they can be
found and in what quantities.
de Beers canada is investigating the expansion
of its Victor mine on northern Ontarios James Bay
Coast into traditional land 90 kilometers west of the
Attawapiskat First Nation. The mine has an estimated
fve years remaining at the open pit diamond mine.
The extension plan is in an advanced exploration stage
at the moment, meaning a fnal decision on whether
to pursue the extension is still at least 18 months away,
said Tom Ormsby, director of External and Corporate
Affairs at De Beers Canada. Ormsby said the company
wants to determine the feasibility of the extension
project, before holding more community consultations.
FOR LIVE UPDATES
V
I
S
I
T
128
|
What is the best piece of advice you have ever
received?
Diamonds are all about business and trust.
What is your best business tip?
You always have to look for long-term business.
Who or What other business or business people
inspire you?
Warren Bufet and Ratan Tata.
if you had only one Word to describe yourself,
What Would it be?
Trustworthy.
What do you most enjoy about your Work?
Tere are so many issues I really enjoy. Sharing and using
my knowledge, experiencing the diferent cultures that I
see in the course of my work by traveling and also the social
contact I have daily.
What do you do to relax?
Yoga is the best way to relax.
What Would be your dream job?
I practice my dream job.
What sets your company apart from others in the
industry?
We are proud to have an RJC certifcate, but we work with
long-term relationships and that gives us the proof that we
are doing business correctly. Te rivalry is tough, but we
are still standing.
What are your plans for your business in the
future?
We would like to continue with our fundamentals.
Modernization, experience and knowledge are giving us
the opportunity to expand year by year.
What makes you most proud about your company?
Tat we have built up a respected reputation.
What is the biggest risk you have ever taken?
I will use a quote from Warren Bufet, Risk comes from not
knowing what youre doing.
Profile
name: Girdharbhai Gajera
position: Director
company name: Komal Gems NV
type of business: Import and export of rough
and polished diamonds
years in business: 40 years
business philosophy: Our favorite holding
period is forever
|
129
ADVERTISERS LIST
Advertiser pAge Advertiser pAge
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Accadia Software 38 Kiran Gems Pvt. Ltd 11
Aloni Diamonds 33 Komal Gems NV 5
Ankit Gems 17 Kristall Production Corp. 3
Asian Star 43 Lucee Diamonds 4
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Basel Show 2014 26 Mahendra Brothers Exports Pvt. Ltd. 55
Bhavani Gems 45 Malca Amit Antwerp 30
D. Navinchandra 15 Manak 81
DDS - Direct Diamond Solutions 29 Millei Diamonds 63
Dharmanandan Diamonds 41 National Jeweler 71
Dialit 47 Priti Gems Exports Pvt. Ltd. 89
Eurostar Diamond Traders N.V 82,132 RDI 130
GemeWizard 79 Rosy Blue NV - Insert 82/83
GemFind 18 Rubel & Mnasch 131
GIA - Gemological Institute of America 51 Sheetal Manufacturing 13
Hari Krishna Exports 9 Shimony Diamonds 66
HRD Antwerp 69 Shree Ramkrishna Export 23
Ideal Brilliant 19 Stuller 2
IDEX Online 24,82/83, 122 Tach 7
IGI - International Gemological Institute 75 The Jeweler Magazine 20
Instore Magazine 120-121 The Munich Show 88
Interjewel Pvt. Ltd. 10 Venus Jewel 6
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Joris Co. BVBA 32 Y.L. Golan 12
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