Brave New World
December 19, 12
Change is inevitable, but it’s sometimes difficult. Here’s a roundup of some of the events changing the face of the diamond and jewelry industries in 2012. What change lies ahead in 2013? Only time will tell.
One of the biggest changes this year was the news that De Beers was embarking on changes of its corporate structure. The company basically turned its entire model on its head by saying it needed to put the consumer at the start of the diamond pipeline. Through a series of yet to be disclosed changes, De Beers intends to “realign” itself. Early stages for this corporate realignment include a group renaming and the consolidation of the De Beers corporate identity. In a letter to Sightholders, DTC CEO Varda Shine wrote, "We have therefore begun a piece of work to start to realign our organization a little better to enable us to better translate your needs into a responsive production and sales strategy – so that together we can grow the value of diamonds for decades to come.”
This was also the end of an era for De Beers as the Oppenheimer family left the diamond industry after 80 years. The family’s 40-percent share in De Beers was officially acquired by Anglo American, which paid $5.2 billion in cash for the stake.
 Image: Lucara Diamond Corp. |
Another change took place with the migration of De Beers’ worldwide diamond aggregation to Gaborone, Botswana, two months ahead of schedule. For the past 80 years, aggregation had taken place in London. The aggregation activities will take place in the new purpose-built De Beers facility housed within the DTC Botswana building. De Beers is relocating its Sights and sales operations – including professionals, skills, equipment and technology – from London to Gaborone over the next year.
Rio Tinto Diamonds this year announced it would be exiting the diamond industry. Speculation was rife about who would buy the multi-miners operations, but at the time of print, no announcement had been made about a possible purchaser. According to the company’s chief financial officer, the company’s plans to sell its diamond assets are “well advanced.” Harry Winston, which holds a 40 percent stake in the Diavik mine, has the first right of refusal to purchase Rio Tinto’s 60 percent share of the Canadian mine.
BHP Billiton also did exit the diamond business. Towards the end of the year, it was announced that Harry Winston had bought the Ekati mine in Canada and the Diamonds Marketing business in Antwerp for a cool $500 million. It’s definitely the end of an era for BHP, but the start of a new chapter in Harry Winston’s diamond story.
This was the year that the GIA finally came to Israel. The diamond grading lab opened a facility that is estimated to save the local industry some $30-$50 million a year. As well as the financial saving, grading lag time is estimated to have been cut from six to eight weeks to as little as one week. Donna Baker, GIA president and CEO, said the capacity of the lab would be small to begin with and would grow according to local demand.
In India, 2012 saw a large influx of companies moving away from the traditional South Mumbai Opera House diamond center and into the purpose-built Bharat Diamond Bourse (BDB). While the BDB is far from completely full, it has now been inhabited by some of the largest and most influential Indian firms, paving the way for others to follow.
In an attempt to maintain its position as leading rough diamond bourse, the Antwerp Diamond Tender Facility was opened on the first floor of the AWDC building in the heart of the Antwerp diamond district. The facility includes seven viewing rooms, access and video controls.
In a sign of the times, the International Colored Gemstone Association (ICA) moved its international headquarters from New York to Hong Kong. The organization said the move was aimed at bringing it into closer touch with the rapidly expanding Asian markets – and its increased membership in the region – and to actively participate in the further development of the colored gemstones and jewelry industry in the region. ICA will still maintain its presence in New York.
Lucara Diamond Corp. began producing diamonds from its Karowe mine in Botswana. Full production was reached at the end of the second quarter. Lucara is also the 75-percent owner of the Motha Project in Lesotho, which is in the trial mining stage.
The first diamonds from the Bunder Diamond Project in Madhya Pradesh, India were handed over to selected Indian diamantaires for cutting and polishing. The diamonds were set into jewelry designed by Reena Ahluwalia, a Canadian-based designer who was born in Madhya Pradesh. This was the first time in a century that India has produced diamonds that have gone into indigenously fabricated jewelry.
 Gillian Milovanovic |
Towards the end of the year, there was some disagreement over the Diamond Source Warranty Protocol, a chain of custody initiative proposed by a group of American organizations. The initiative was announced by the Jewelers of America (JA), the Jewelers Vigilance Committee (JVC) and the Diamond Manufacturers and Importers Association (DMIA), but saw opposition from other sectors of the industry.
In a year when lab-created diamonds made the news for all the wrong reasons, Gemesis announced that it was now able to produce colorless diamonds. The IGI certified colorless diamonds are priced according to their overall quality and color in the same way as natural diamonds. After a spate of attempts to pass off lab-made diamonds as natural, grading labs are increasingly on the lookout for undisclosed synthetic diamonds. No doubt this is a topic that we will hear more about in 2013.
This was the year that diamonds from Zimbabwe were allowed to be exported following approval from the Kimberley Process. The country seems to be back on the diamond production map as it hosted a two-day international diamond conference highlighting its accomplishments.
This was also the year that saw the first woman to serve as chair of the Kimberley Process. Ambassador Gillian Milovanovic served as chair on behalf of the U.S. Change could be afoot for the Kimberley Process itself, especially its definition of “conflict diamonds” in a bid to make it more relevant and far reaching.