RAPAPORT... Botswana’s diamond exports increased by 101 percent to $477 million during the first quarter of 2010, according to preliminary statistics compiled by the Bank of Botswana. January’s exports totaled nearly $253 million, but February’s exports were lower at $172 million. March was the weakest month, with exports of only $53 million. Though diamond exports increased compared with the first quarter of 2009, during the first quarter of 2008, exports stood at $924 million.
GIA Trains Law Enforcement Officers
Law officers from Brazil, Colombia, Belgium, India, Thailand, the U.K. and the United Arab Emirates (UAE) joined detectives from the New York and Los Angeles police departments and Federal Bureau of Investigation (FBI) special agents at the Gemological Institute of America’s (GIA) Carlsbad, California campus for a two-week crash course in gemology that was specifically requested by the FBI. The group was instructed in a broad range of gemstone topics, including how to use loupes, tweezers and microscopes; the 4Cs; synthetics, imitations and color treatments; the Kimberley Process (KP); and how to read GIA grading reports. Donna Baker, GIA’s president, explained that working with law enforcement officials is a very important aspect of GIA’s mission to protect the public trust.
Antwerp Diamond Bank Posts Loss
The Antwerp Diamond Bank (ADB) reported a net loss of $15.3 million (EUR 12 million) in 2009, compared with a profit of $37.9 million (EUR 29.7 million) in 2008. A statement from the bank noted that this is the first time in 25 years that ADB closed the fiscal year with a negative result. The loss was attributed to a $68.9 million (EUR 54 million) impairment made for doubtful debtors. ADB is the only lender that caters exclusively to the diamond and jewelry industry.
Kristall’s Profits Drop
Kristall of Smolensk, Russia’s biggest cut and polished diamond producer, saw its net profit plummet 44 percent to $302,420 (RUB 8.9 million) in 2009 as the cost of servicing loans mounted, Interfax reported, citing a financial report from the state-owned production association. Sales edged up slightly to $263.5 million (RUB 7.8 billion) from $245.6 million (RUB 7.5 billion) in 2008. The cost of goods sold rose 5 percent to $241.2 million (RUB 7.1 billion), but gross profit fell 8.6 percent.
Sales to the Gokhran, the state’s precious metals and gemstones repository, accounted for 56.6 percent of Kristall’s entire sales in dollars, the news service said. Kristall sold 0.7 percent of its cut diamonds in the domestic market, 13.5 percent to Israel, 11.2 percent to the United Arab Emirates (UAE), 8.6 percent to the U.S., 4.6 percent to Hong Kong and 3.7 percent to Belgium. Kristall’s long-term debt was $1.4 million (RUB 444.2 million) and its short-term debt was $3.8 million (RUB 116 million) at the end of the year, with Sberbank and VTB-Northwest as the primary creditors.
– Additional reporting provided by Acquire Media.
Lazare Kaplan Sues Insurers
Lazare Kaplan International Inc. (LKI) filed a federal lawsuit against various Lloyds of London syndicates and European insurers for $640 million on May 17, 2010. In a written statement, LKI explained that the suit arose out of the disappearance of diamonds that LKI alleges were insured by the defendants. The lawsuit states that the insurers breached two “all risk” New York property insurance policies and an agreement for interim payment, under which the insurers made a nonrefundable interim payment of $28 million to LKI in January 2010. After making this payment, LKI claims that the insurers reversed course and refused to acknowledge coverage or to pay any covered losses under the policies.
The complaint alleges, among other things, that the insurers, who also issued separate policies to LKI under English law, created a virtual coverage “whipsaw” by denying coverage under the English policies while at the same time, asserting that under the New York policies, there is no coverage because LKI insured the same property under the English policies. LKI’s statement noted that the company expects to conduct broad-ranging discovery around the world as the lawsuit progresses.
Article from the Rapaport Magazine - June 2010. To subscribe click here.