No Easy Answers
November 17, 22
Three stories in the diamond world particularly took my interest this week. I'll come to the details in a moment, but first, allow me a moment to digress briefly and provide a little context. There was a newspaper quiz that became something of a Saturday highlight for us when we lived in England. The Guardian ran a weekly set of general knowledge questions, followed by a handful of "What Links", such as "What links Monarch; Laker; Sabena; Malev; Pan Am?" Or "What links Sinopec; Rosneft; Petrobras; Saudi Aramco?" (answers below).
My wife and I took the quiz very seriously. So much so that on one occasion I (wrongly) suspected her of cheating (the answers were printed on another page). I spoke to our newsagent (a quaint British tradition. They send small boys on bicycles to deliver newspapers to your door). I told him of my (unfounded) suspicions, and he agreed to cut the answers from the page and put them in a sealed envelope before sending the paper out.
Back to diamonds. Sometimes a news story strikes you as particularly poignant, for whatever reason. In recent days the first story that struck me was that US-based Blue Nile is moving into the lab grown bridal market. It's been selling lab growns, from Lightbox, as fashion jewelry, for the last couple of years. But it's now expanding, following a $360m buyout by Signet, and now has over 7,000 lab growns listed on its "design your own ring" facility online.
The second was an announcement by the state government in Surat that lab grown manufacturers would no longer have to pay duty of up to 15 per cent on their electricity bills. High pressure and high temperature, two of the key requirements for making diamonds, don't come cheap, so the intervention will make a significant difference. India, currently producing about 15 per cent of the world's lab growns, is keen to challenge China for the number one spot. The move follows the State Bank of India's announcement in August that it would start lending for capital expenditure on machinery to produce lab growns.
The third takes us to Tanzania, where grey sludge burst through the wall of a tailings dam at the Williamson diamond mine, leaving a five-mile trail of destruction in its wake. Thankfully no lives were lost - unlike a similar incident only weeks earlier in Jagersfontein, South Africa - but there were some injuries, over a dozen homes damaged, and a massive clean-up operation required. Petra, UK-based owners of the mine, it could take three months before they're able to start mining diamonds again
Three snapshots of life in the diamond industry. Everyone will have their own answer to the "What Links" question and it's not necessarily an easy one. Mine is in a sealed envelope. But if you're looking for more straightforward answers, try these (with thanks to The Guardian): Defunct airlines. State-owned oil companies: China; Russia; Brazil; Saudi Arabia.
Have a fabulous weekend.