How De Beers Went From Star to Scapegoat

By Rob Bates, JCK

Here is how fast things can change in the diamond industry.

In March 2014, Anglo American’s CEO Mark Cutifani, then a year into the job, publicly fretted his company had overpaid for De Beers in 2011. “The acquisition is not delivering what we would expect it to deliver,” he said, adding that he wants De Beers to attain a 15 percent return on capital employed (ROCE).

Drastic Rough Diamond Price Cuts Will Result In Billion-Dollar Losses

There’s absolutely no argument that rough diamond prices are much too high today. Manufacturers are having an extremely difficult time selling the polished coming out of this rough as buyers are simply unwilling to pay more. That this is mainly because diamond miners have only looked at their own bottom lines and ignored the warning signs in the production pipeline is also an uncontested fact. That this has considerably weakened and destabilised the diamond production pipeline is also undeniable.

Is The Diamond System Broken?

Rob Bates from JCK wrote a very good article titled “The Diamond Selling System Is Broken. Can It Be Fixed?”

The focus of Rob’s article was very much on the relationship between mining and manufacturing, and the possibilities of developing possible variations of the rational way the two interact. Whether it’s a site, a tender, a cost plus method, increasing credit terms and outright negotiation on each purchase and so on the article concluded correctly that information is so readily available and so quick to get to the market that this in itself impacts on prices, and therefore the need for greater transparency by miners to the market about how they price could go a long way in improving the status quo.

No Tolerance and No Leniency For Wrong-Doers

The recent case in which employees of the Indian technology company the GIA uses to maintain its secure database allegedly fraudulently upgraded the reports of just over 1,000 diamonds that were submitted to the GIA for grading clearly sets off alarm bells. We cannot but be horrified at the details published about this case.

Clearly, we must wait for the police and any other authorities to fully investigate, but on the face of it the case indicates very strongly the high level of vigilance our industry needs to maintain. The number of stones affected is relatively small, but this is not the point. The diamond bourses cannot allow any illicit activity whatsoever in our trade and must take all steps possible to ensure that consumers know we are an industry that has zero tolerance for any such illegality.

Hong Kong Indian Group Officially Launched

A group of Hong Kong-based Indian diamond companies have launched the Hong Kong Indian Diamond Association (HKIDA), which aims to protect and promote the natural diamond trade.

Ramesh Virani, chairman of HKIDA, cited the support and commitment of the association’s 35 founding members, which include the largest Indian diamond traders and jewelry manufacturers in Hong Kong, according to a report in Jewellery News Asia.

Antwerp Court Hands Down Harsh Punishment In Certification Fraud Case

The Antwerp World Diamond Centre (AWDC) said that four traders have received "extremely harsh sentences" from the Correctional Court in Antwerp for committing fraud concerning diamond certificates.

The traders bribed an employee from the HRD Antwerp diamond lab to obtain certificates stating a higher color grade for their diamonds than is actually the case.

Idar-Oberstein Provides Spectacular Backdrop To ExCo Meeting

By Albert Robinson

WFDB Communications and Media Consultant

When WFDB Treasurer Dieter Hahn sent me an email out of the blue in the early days of July inviting me to take part in the WFDB Executive Committee meeting to be hosted by the German Diamond and Gemstone Bourse in Idar-Oberstein, I was delighted to be able to accept the invitation. "It will definitely be worth your while to attend," Dieter rather cryptically teased me.

DDC Announces New Initiative To Safeguard Diamond Transactions

The Diamond Dealers Club (DDC) of New York has announced a new initiative to expand its arbitration program in an effort to help increase the security of diamond and jewelry transactions. For the first time, by putting an acceptable arbitration clause into their memos, invoices, or on their letterhead, DDC members will be able to use DDC arbitration to resolve disputes about transactions with non-members.