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Diamond Hallmarking Seeks to Make Its Mark
Jul 17, 2015 8:00 AM
By Avi Krawitz
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RAPAPORT... Hallmarking, long used in precious metals, is being promoted as a means to differentiate diamond production as plans for industry-wide chain of custody standards are on hold.
Unlike a gold or platinum hallmark, which attests to the composition of the precious metal, a diamond hallmark serves as a certificate of origin to ensure that the diamond has met the sourcing criteria that millennials are demanding.
“We’re dealing with a younger generation which is looking on the internet for social responsibility in the sourcing of their diamonds,” said Marc Altman, of Philadelphia, Pennsylvania-based B&E Jewelers. “They’re the ones who are asking for it, even though it’s a small percentage who do. They like the story of knowing where the diamond comes from.” Altman added that CanadaMark, a hallmarking program which the jeweler recently joined, is particularly appealing for U.S. consumers given that the diamonds are sourced in North America, with no association to conflict diamonds.
For some producers, such as in Canada and Botswana, hallmarking could enable premium pricing for diamonds, with 70 percent of consumers prepared to pay a little more for their purchase, according to James Pounds, Dominion Diamond Corporation’s president and marketing exec. The miner, which relaunched the CanadaMark in May 2014, noted that its goals for the mark extend beyond the conflict diamond issue. It hopes to highlight the environmental stewardship and social responsibility of the Canadian diamond industry, which will ultimately create a premium for the company’s diamond production.
Chain of Custody Hurdles
Dominion claims it can create an audit trail from its Ekati and Diavik mines in Canada through the polishing process. The manufacturer receives an invoice and assigns a tracking number to each Dominion diamond designated for CanadaMark, as it is separated from other rough supply during the polishing process. Once polished, the manufacturer enters the information into Dominion’s system, along with the details and characteristics of the stone. A unique serial number is then laser inscribed onto the girdle of the diamond and Dominion issues a CanadaMark certificate.
The difficulty of implementing such segregation on a large scale is frequently cited as a roadblock to implementing the often touted chain-of-custody standards for diamonds.
Calls for Claims of Provenance
The Responsible Jewellery Council (RJC) has no immediate plans to implement chain of custody for diamonds as it has for gold and platinum, a representative explained in a March 2015 interview. RJC’s code of practices now has a provision that satisfies those entities that wish to make a claim on the provenance of their diamonds, according to the interview. RJC did not respond to Rapaport News’s request for further comment in time for this article.
Martin Rapaport, chairman of Rapaport Group, stressed in a June presentation to U.S. jewelers and diamantaires that hallmarking would help companies differentiate with a chain of custody which recognizes a mine or mining company supplying a product that meets certain ethical standards and physical characteristics.
Not a Traditional Hallmark…
Such hallmarks, or certificates of origin, differ from other hallmarking in the jewelry industry. Marion Wilson, a director at the Assay Office Birmingham, explained that hallmarking is a U.K. legal requirement which guarantees the precious metal content in a piece of jewelry. This is assessed using scientific processes to determine the amount of either gold, silver, platinum or palladium present. An appropriate hallmark is then applied to every piece, Wilson said.
“For example, when we strike a 750 mark on a piece of gold, that’s our guarantee that there is 75 percent gold in the metal used in a piece of jewelry,” she explained. “Assessing a diamond is a completely different process and not just about the composition. Our diamond grading and authentication service is all about assessing the quality of the diamond, the color and clarity, and whether it’s natural or been enhanced. It is based on scientific analysis but coupled with expert opinion and the application of industry standards."
…Not a Brand
Neither should hallmarking be confused with diamond branding, which focuses on the quality of the goods as well as their sourcing, among the characteristics that tell its story.
De Beers uses its own laboratories to ensure that each diamond meets its Forevermark brand grading standard. Those stones are responsibly sourced from just a few select mines – not all owned by De Beers – which meet its social, business and environmental standards.
However, De Beers is unable to pinpoint exactly which mine a particular diamond comes from, given that it mixes the production from its different mines in Botswana, South Africa, Namibia and Canada, before supplying to the market. Jewelers and De Beers sightholders are relying on the company’s promise of responsible sourcing in their own branding initiatives, rather than a true certificate of origin. Some are taking that promise and leveraging the location of their polishing facility to brand and market their diamonds.
Emanuel Namdar, general manager of Schachter & Namdar Asia (SN Asia), said he’s been able to benefit from the strong association that consumers and jewelers in China and Hong Kong have with diamonds from South Africa in his company’s own branding initiatives. As part of the Pretoria government’s ‘Proudly South African’ initiative, SN Asia has the exclusive rights to inscribe the logo and wording ‘Proudly South African’ on the girdle of diamonds polished in its Johannesburg factory. “This is accompanied with a certificate that this diamond was made from rough purchased and polished in South Africa,” Namdar said.
Similarly, Botswana’s Diamond Hub authorized manufacturers to use the stamp ‘Polished in Botswana,’ in their disclosures.
Consumer Confidence at the Core
Some feel that Botswana might be missing an opportunity to extend that message for diamonds that are mined in the country. While De Beers supply is sold in an aggregated mix with production from other locations, the state-owned Okavango Diamond Company (ODC) was set up in late 2013 to sell exclusively Botswana diamonds.
Jacob Thamage, Botswana’s Diamond Hub coordinator and chairman of ODC, noted in an email to Rapaport News that there were proposals for such hallmarking-type programs in the early stages of setting up ODC. However, these were shelved as the company started operating and implementing its auction sales.
Proponents argue that such a certificate of origin helps polished suppliers enhance their brand and is becoming increasingly important to millennials who are looking for such differentiation.
“We’re definitely seeing growth in our appeal for the ecological and social responsibility around our mines. It’s a story that resonates with people,” Pounds said. “Consumer confidence is at the center of our business and that confidence and integrity is represented by the hallmark.”
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Tags:
Avi Krawitz, CanadaMark, De Beers, diamonds, Dominion
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