Diamond Market on the Rebound

De Beers Chief Executive Officer obviously has tabs on where the diamond market is headed.  And after a series of high-level meetings with several companies in the diamond industry, CEO Gareth Penny has concluded that there is an encouraging rebound happening in the diamond market.  “While not back to pre-crisis levels, we are seeing encouraging signs in the diamond market that the recovery has gained an important foothold and is continuing to gain traction.”  Penny also added, “After a slightly better than expected Christmas buying period, there has been significant restocking by retailers throughout the first quarter.  In addition, U.S. consumer confidence is improving, while China and India continue to show strong growth.”

diamonds

Now De Beers and other diamond retailers are looking at various maneuvers to try and increase sales over the coming year, after seeing a nearly three-fold increase in first quarter sales for the Diamond Trading Co., versus the same time last year. The enormous company is considering such strategies as sustainably maximizing the value of rough diamonds via an exclusive distribution system, retaining and investing in downstream opportunities where they can ultimately find real value creation, and investing in and protecting diamond equity.

Penney also added, “We have entered a new chapter in the history of our industry which, it must be said, offers great promise, and no doubt challenges, for all of us, but I’m very confident in our product, our people and our passion and I know that we have a hugely exciting diamond decade ahead of us.”

Clarity Project Pushing For Legit Diamond Certification

The Clarity Project is a fair jewelry social enterprise that pushes towards improving the quality of miners and their communties. Journalist Martin Rappaport recently wrote that there is an estimated “tens of thousands of carats of blood diamonds [that] are now in dealers’ inventories and jewelers’ showcases—and are being actively sold to consumers.”
The Clarity Project
Many journalists have noted the failure of the Kimberly Process Certification Scheme (KPCS) in which miners are granted certificates for being conflict-free diamonds. Yet thousands of blood diamonds are cut and sold to manufacturers and retailers under the guise of being certified.

The Clarity Project aims to clear these misguided certifications, hold miners accoutnable at the local level, involve stakeholders at the local level, be more community-oriented and conscious of local cultural and authority systems, and finally to devise a more legitimate certification system. Many important debates surrounding these topics occurred at last year’s Fair Trade Conference, which involved the Responsible Jewelry Council and Alliance for Responsible Mining. Either way you look at it, more legitimate diamond certification is a hot issue in the diamond industry right now.

Get Ready for the Super Diamonds

Lab-grown diamonds known as Super Diamonds are set to revolutionize aspects of the jewelry and mining industries.  Synthetically-grown diamonds may never replace the mystique of natural diamonds, but they certainly are changing the face of technology.

super diamonds

Aside from the jewelry industry, diamonds are also used for mining and drilling purposes, as they have a status of the hardest known substance.  But Super Diamonds are made in a controlled vacuum chamber, using high temperatures, added methane and hydrogen and microwave radiation.  Because of the totally controlled environment, the spaces between the molecules in diamonds are virtually nonexistent, resulting in Super Diamonds without flaws or impurities.  What’s the result of this?  Super diamonds end up being nearly fifty percent stronger than natural diamonds, making them an almost unbreakable substance.

The impact of this is extraordinary.  Super diamonds once took five years to create, but can now be grown in a matter of days.  They can be used to create sharper and longer-lasting drill-bits and blades.  Super diamonds can cut through regular diamonds and can be used to make more effective state-of-the-art mining equipment.  Their effect could even extend to the silicon chip, computer and mobile phone industries as Super Diamonds are unaffected by heat and could be used longer-lasting devices that could operate under more severe conditions.

Observations of changes in the diamond market as Since1910.com reaches its 100th year

Mortar Jewelry StoreIn the mid 1960′s, while still in high school, I started working part time in our family retail jewelry business which had been founded in 1910 by my great grandfather.  My grandfather, who started working in the business in 1915, and my father who joined him after serving in World War II were both active in the business at that time,  They were very innovative and unique for a retail store in that they had a diamond cutting wheel and diamond cutter on the selling floor of our retail store.  They also had an enclosed diamond room where customers could view loose diamonds and see them under the microscope.  Although the GIA [Gemological Institute of America] first began issuing certifications on diamonds in 1955, retailers and the consumer were unfamiliar with them. At the time our relatively small store was selling about a dozen engagement rings a day.

We bought most of our diamonds from Harry Winston  who used to have a large wholesale division.  There were three qualites we purchased and sold.  Our top quality was a gem color [D to F] in a flawless to VVS clarity, then a F-G color VS clarity and lastly a G-H-I color SI2  clarity.  Since there were no GIA certificates our customers would either take the diamond to an independent appraiser our trust in our reputation and use our own appraisal.

Around 1969 our salesman from Harry Winston who had become a good friend of my father was to fly to a jewelry show with some of his inventory. He was found robbed and shot to death in his car at the airport.  We gradually wound down our relationship with Winston.

In 1971, I graduated from college and entered the business full time. My grandfather had passed away by this time.  My father and I opened a total of five locations over the next couple of years and we started going on overseas diamond buying trips several times a year to the diamond cutting center at Ramat Gan, Israel.  Buying here was a different experience.  The wholesale cutting center consisted of time two high security high rise buildings.  The top floor of one of them, which was lit by natural northern light, housed the diamond bourse. Here we would sit at long tables and our diamond broker would get the word out as to what we were in the market for.

Representatives from the different cutters would bring to us large parcels of diamonds for us to consider.  The asking prices were almost always to high.  If interested, we would make an offer on the parcel. If the parcel was larger then what we wanted we could offer on a portion of it.  If we picked individual stones from the parcel the price would be higher.  We rarely got an answer the same day as to if our offer was accepted.  Since we were making offers on many parcels we never knew until the last day as to the total number of offers accepted. Our diamond broker would ship the diamonds back to us. We would send many of these diamonds to the GIA, which we began using at  this time, for certification.

Today,over 100 years after my great grandfather founded H.L. Gross & Bro. our business still consists of selling diamonds in our store but now we also sell on our online site Since1910.com as well as to wholesalers and diamond cutters worldwide through our wholesale division.  Almost all our diamonds today are GIA certified.  When I started in the business in the 1960′s we would sit down with a customer and although we would show them the diamond under a microscope and point out why one would be more expensive then the next we would stress the beauty, romance and tradition of the diamond to make a sale.

Today the sale is more likely made on the desirability of the GIA certificate that accompanies it which includes all of its technical details.

Michael Gross
President
4th generation Since1910.com

Russia Now World’s Largest Diamond Producer

Russia is quickly surpassing De Beers as the world’s largest diamond producer.  And yet this feat hasn’t been translating into extensive sales as Russia has been stockpiling the gems during the global economic crisis.  The Alrosa diamond company, which is 90 percent owned by the Russian government, hasn’t sold any of their rough stones since December. And so Russia has, in a way, become the decisive force in the pricing of diamonds on the global scale.  What it decides in terms of production, diamond distribution, and pricing will largely determine the value of diamond rings, earring, tennis bracelets and jewelry for several years.

russia diamondsAs Alrosa replaces De Beers as the world’s largest diamond producer, many believe that it is a precarious moment for the Russian company to assume leadership of the diamond industry.

But since de Beers has agreed to an European Union antitrust agreement from stockpiling and has closed mines  as a result of a massive increase in rough stones, Alrosa, and Russia along with it, has emerged as the diamond industry leader.

Alrosa  is also working with the Moscow bank investment titan, Leader, which markets the stockpiled diamonds to foreign investors.  Under the Alrosa plan, foreign investors would buy the stockpiled diamonds, but not release the gems for several yeas.

Zimbabwe Continues to Be Associated with Conflict Diamonds

kimberley processThe Kimberly Process, an international effort to put a stop in the trade of what are known as conflict diamonds, has pushed a strong rebuke against Zimbabwe for its refusal to comply with international diamond industry standards.  Zimbabwe has been under tremendous amounts of international pressure for its direct involvement in illegal mining activities and violence against civilians as a result of diamond trade sales fueling conflict in the area.

The World Federation of Diamond Bourses has strongly recommended that its members in twenty countries refrain from the illegal diamond trades operated by the Marange deposits in Eastern Zimbabwe.  These mining deposits have been the subject of numerous violations and reports of civilian abuses by the military.

Of course, governement officials have notoriously denied state-sponsored violence reports.  The state-owned newspaper has reported the Zimbabwe government’s willingness to comply with all the Kimberly Process suggestions, before they even issued their final reports.  The Zimbabwe government’s deputy mining minister has also agreed to gradually remove its soldiers from diamond mining fields as proper security forces are set in place.  There is, however, some contention that the proper security forces will simply be unofficial military forces.

Furthermore, Zimbabwe President Robert Mugabe is hostile towards the tactics of Western nations and anyone who attempts to interfere with his rule, in spite of the numerous reports of human rights violations.

Jewelers of America Releases Responsible Diamonds Statement

Jewelers of AmericaJewelers of America came out with a Responsible Diamonds Statement today, posting it to their website.  In the statement, Jewelers of America came out with their position of responsibility in the diamond industry and the importance of advocating high ethical, social and environmental standards.

In the statement, Jewelers of America asserted how important it was that their members adhere to a code of professional business practices.  This means that members adhere to a code of conduct that includes making sure suppliers participate in responsible practice at every point in the supply chain.

The U.S. Department of State has also stressed the importance of supporting cogent and responsible business practices at every level of the diamond jewelry supply chain.

In their statement, Jewelers of America directly addressed the problem of human rights violations in the Marange region of Zimbabwe.  Exporting diamonds from this region is illegal, as numerous human rights violations have accrued and been reported in the finding of such “rough diamonds”.  Jewelers of America reasserted their commitment that they will make sure the law is upheld to halt this illegal diamond trade.  They fully support the position held by the U.S. Department of State, which has called for a “full and expeditious implementation of the stringent controls”, which were agreed upon at the KP Plenary.

The statement goes on to say that Jewelers of America loathes the way that so-called “conflict diamonds” have been used.  These are diamonds from illegitimate sources, which are traded in order to fund regional conflicts.

Lastly, Jewelers of America uphold their commitment to the Responsible Jewelry Council, which seeks to create a worldwide diamond and gold jewelry supply chain system, from mining through retail.