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The Rough Guide: Who's Buying Where and Why
Insights
Jun 30, 2016 8:00 AM
By Avi Krawitz
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 RAPAPORT... There’s an unusual calm about the rough diamond market as both miners and manufacturers appear content with their performance in the first half of the year. Miners are reporting significantly better sales than last year and managed to reduce some inventory built up in 2015, while manufacturers are seeing improved profit from the rough they’re buying.
That’s in stark contrast to a year ago when higher rough prices forced manufacturers to refuse supply, resulting in a slump in sales at De Beers and ALROSA. The lack of profit from rough in 2014 and 2015 prompted many to question the value of long-term supply contracts with the major mining companies.
It seems to be less of an issue today. Rough dealers and manufacturers note they’re getting the best value from De Beers supply as the company has kept prices stable since it reduced in January. While ALROSA has not made any significant price adjustments since August, it’s having no problems selling and posted record results in the first quarter.
Both companies have implied they’ll limit supply and keep prices stable, at least for the next few months while the polished market is uncertain.
That stability and consistency of supply is what attracts manufacturers to prefer long-term contracts over competing for rough from auctions where prices tend to be more volatile and supply is not guaranteed. In fact, the larger manufacturers, which provide polished for jewelry retail programs, argue they could not fill those ongoing polished orders without the guaranteed rough supply the major miners offer.
Therefore, it’s contracted supply that sets the tone for the market. The days of the De Beers “monopoly” may be well behind us, but the market still takes its cues from the [dare I say] London-based company. ALROSA’s influence is on the rise, while Rio Tinto and Dominion Diamond Corp. are also worth noting as they too sell via long-term contracts.
Those top four miners are arguably the only companies with large-enough production to guarantee a scheduled, consistent supply of rough to a set group of clients. Others such as Okavango Diamond Company and Grib Diamonds are said to be considering a shift to contracts, while Petra Diamonds probably has the volume but seems content with its current auction platform.
However, for now, an estimated 60 percent of global supply is sold via long-term contracts among the four majors, while each also sells a smaller portion of their production through auctions. From their client lists, we can recognize which companies are the major buyers of rough on the market.
The four miners recently updated their client websites, which Rapaport News has collated to present this year’s list of who is buying the bulk of global rough supply – and, de facto, producing a major portion of the polished.
The comprehensive list counts 135 companies, up from 127 named last year. While combined production across the four miners is expected to rise by an estimated 6 percent in 2016, and considering they have left over inventory from last year being sold, it makes sense that more diamonds are being spread between a slightly higher number of companies.
The list includes diamond manufacturers and rough dealers, as well as companies with downstream activities that extend into jewelry manufacturing, wholesale and retail.
It also reaffirms a trend among the major jewelry retailers to conduct in-house polished production as they’ve developed rough sourcing and manufacturing capabilities of their own. Signet Jewelers, Tiffany & Co. (Laurelton), Chow Tai Fook, Chow Sang Sang, Luk Fook, Gitanjali Gems, Graff Diamonds (SAFDICO) and Tasaki & Co., are all examples of retailers that appear on this years’ list.
Of the total, 43 companies are headquartered in India (the largest manufacturing center), 41 in Belgium (the major rough trading hub), 14 in Israel, 10 in Russia, nine in the U.S., five in Hong Kong, three in the United Arab Emirates (UAE), two each in Canada, Japan and South Africa, and one each in the UK, Mauritius, Namibia and Switzerland.
De Beers, which sells 90 percent of its production on a schedule of 10 sights a year, has a total of 85 sightholders listed in its sightholder directory for the current contract year that ends on March 31, 2017. Of those, 75 receive rough from its main Global Sightholder Sales (GSS) division. Twenty companies receive beneficiation supply in Botswana, seven in South Africa, nine in Namibia and one in Canada. Four companies have a sight for a supply of industrial diamonds.
In addition, 10 companies have De Beers ‘accredited buyer’ status. That gives them the opportunity to purchase rough from De Beers on an ad-hoc basis depending on the availability of ex-plan – supply offered at a sight that is over and above sightholder applications.
A number of companies have multiple De Beers sights with Diacor International and Julius Klein standing out with four sights each, spanning GSS, Botswana, South Africa and Namibia. A few have contracts from more than one of the major miners with Asian Star, Diarough, Hari Krishna Exports, Laurelton Diamonds and Venus Jewel having penned contracts with all four miners.
Some 57 companies are listed as ‘ALROSA Alliance’ customers, while Rio Tinto has 21 ‘Select Diamantaires,’ and Dominion sells its rough to 32 ‘Preferred Purchasers.’
Ultimately, it will be left to those 135 companies to safeguard the balance in the diamond market. While it has taken some degree of discipline for the mining companies to limit supply, rough sales have still increased compared to last year. De Beers sales rose an estimated 12 percent in the first six months of the year compared with a period in the first half of 2015 when manufacturers were still willing to pay high prices and were fairly aggressive in the rough market.
That scenario became unsustainable in the second half of last year and prices fell about 15 percent as demand plummeted and mining company sales slumped. This year, as polished inventory levels reduced over the holiday period, rough demand has been stimulated once again. But, while polished demand remains sluggish, there has been some concern about over-exuberant rough demand again this year.
It will be up to these 135 contracted rough buyers, along with the mining companies, to ensure long-term stability in the market. After all, their ability to buy rough and sell the resulting polished sets a benchmark for determining the sustainability of the diamond industry. With their supply contracts in check, that’s a responsibility they shouldn’t take lightly.
The following is a list of companies which have supply contracts with De Beers – including Global Sightholder Sales (GSS), beneficiation supply in Botswana, Namibia, South Africa and Canada, its accredited buyers and industrial sightholders – ALROSA, Rio Tinto and Dominion Diamond Corp:
| Company Name |
Head Office |
De
Beers |
ALROSA |
Rio Tinto |
Dominion |
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| A.
Dalumi Diamonds Ltd |
Israel |
GSS,
Botswana |
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| A.B.T.
Diamonds Ltd |
Israel |
Accredited
Buyer |
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| A.C.
DIAM B.V.B.A. |
Belgium |
|
ALROSA |
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| Almod
Diamonds Ltd (Duiker Investment) |
USA |
Namibia,
Accredited Buyer |
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| Ankit
Gems Pvt Ltd |
India |
GSS,
Namibia |
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| Arjav
Diamonds NV |
Belgium |
GSS,
Botswana |
ALROSA |
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| Arodiam
Manufacturing Co NV |
Belgium |
GSS,
South Africa |
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| Arslanian Freres |
Belgium |
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ALROSA |
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| Asian
Star Co Ltd |
India |
GSS |
ALROSA |
Rio
Tinto |
Dominion |
| Aspeco
N.V. |
Belgium |
|
ALROSA |
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| Bhavani
Gems |
India |
GSS |
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| Blue
Star Diamonds Pvt Ltd |
India |
GSS,
Botswana |
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Dominion |
| Brilliant Gems NV |
Belgium |
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ALROSA |
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| Brilliant Trading Company (1974) Limited |
Hong
Kong |
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ALROSA |
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| Bronner
Trading Company Ltd. |
Belgium |
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ALROSA |
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| Choron
Diamonds NV |
Belgium |
Accredited
Buyer |
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| Chow
Sang Sang Jewellery Co. Ltd |
Hong
Kong |
GSS |
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| Chow
Tai Fook Jewellery Co. Ltd |
Hong
Kong |
GSS |
ALROSA |
Rio
Tinto |
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| Classic
Diam BVBA |
Belgium |
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Dominion |
| Comdragmetall of RS(Y) |
Russia |
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ALROSA |
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| Corona
Jewellery Company Ltd. |
Canada |
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Dominion |
| Crossworks Manufacturing Ltd |
Canada |
Namibia,
Canada |
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| D.
Navinchandra Gems BVBA |
Belgium |
GSS |
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Dominion |
| Dali
Diamond Co NV |
Belgium |
GSS |
ALROSA |
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| DDK |
Russia |
|
ALROSA |
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| De
Toledo Diamonds Ltd |
Israel |
GSS |
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| Dharmanandan Diamonds Pvt Ltd |
India |
GSS |
ALROSA |
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| Diacor
International Ltd |
South
Africa |
GSS,
Botswana, South Africa, Namibia |
ALROSA |
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| Diajewel NV |
Belgium |
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ALROSA |
|
Dominion |
| Diamant
Impex Bvba |
Belgium |
Accredited
Buyer |
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| Diambel
NV |
Belgium |
GSS |
|
Rio
Tinto |
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| Diamond
India Ltd |
India |
|
ALROSA |
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| Diamtrade BVBA |
Belgium |
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|
Dominion |
| Dianco
BVBA |
Belgium |
GSS |
ALROSA |
Rio
Tinto |
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| Diarough
Sourcing SA |
Belgium |
GSS |
ALROSA |
Rio
Tinto |
Dominion |
| Diarush
DMCC |
UAE |
GSS |
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| Dimexon
International Holdings |
India |
GSS |
ALROSA |
Rio
Tinto |
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| Eloquence
Corporation |
USA |
Industrial |
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| EPL
Diamond |
Russia |
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ALROSA |
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| Espeka
B.V.B.A. |
Belgium |
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ALROSA |
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| Eurostar Diamonds Traders NV |
Belgium |
GSS,
Botswana |
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| Exelco
NV |
Belgium |
GSS,
Botswana |
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| EZ
Diamonds Ltd |
Israel |
GSS |
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| Finestar Jewellery & Diamonds Private Ltd |
India |
Accredited
Buyer |
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| Fischler Diamonds NV |
Belgium |
|
ALROSA |
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| Fruchter
Gad Diamonds Ltd |
Israel |
GSS |
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| G.G.
Export |
India |
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Dominion |
| Gemmata
N.V. |
Belgium |
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Rio
Tinto |
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| Gitanjali Gems Ltd |
India |
GSS |
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| Gold
Star Diamond Pvt Ltd |
India |
GSS |
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| Gomel
PO Kristall OAO |
Russia |
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ALROSA |
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| H Dipak
& Co |
India |
GSS |
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| Hard
Stone Processing (Pty) Ltd |
Namibia |
Namibia |
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| Hari
Darshan Exports Private Ltd |
India |
Accredited
Buyer |
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| Hari
Krishna Exports Pvt Ltd |
India |
GSS |
ALROSA |
Rio
Tinto |
Dominion |
| Hasenfeld-Stein Inc |
USA |
GSS |
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| Henri
Polak |
USA |
Industrial |
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| HVK
International Pvt Ltd |
India |
GSS |
ALROSA |
|
Dominion |
| I.D.R.P. BVBA |
Belgium |
|
ALROSA |
|
Dominion |
| IDH
Diamonds N.V. |
Belgium |
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Rio
Tinto |
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| IGC
Group NV |
Belgium |
GSS,
Botswana |
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| Interjewel Europe NV |
Belgium |
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Dominion |
| Interjewel Pvt. Ltd. |
India |
|
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Rio
Tinto |
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| Jasani
Gems Pvt Ltd |
India |
GSS |
ALROSA |
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| Jewelex
India Pvt Ltd |
India |
GSS |
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| Julius
Klein Diamonds LLC |
USA |
GSS,
Botswana, South Africa |
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| K
Girdharlal International Ltd |
India |
GSS |
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| Kapu
Gems |
India |
|
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Rio
Tinto |
Dominion |
| KARP
Impex Ltd |
India |
GSS |
ALROSA |
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| KGK
Diamonds (I) Pvt Ltd |
India |
GSS,
Botswana, South Africa |
ALROSA |
Rio
Tinto |
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| Kiran
Exports BVBA |
Belgium |
|
|
Rio
Tinto |
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| Kiran
Gems Pvt Ltd |
India |
GSS |
ALROSA |
|
Dominion |
| Komal
Gems NV |
Belgium |
|
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|
Dominion |
| KP
Sanghvi & Sons |
India |
GSS |
ALROSA |
Rio
Tinto |
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| Kristall Production Corporation OAO |
Russia |
Accredited
Buyer |
ALROSA |
|
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| Kristall-99 |
Russia |
|
ALROSA |
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| L&N DIAMONDS LTD |
Israel |
|
ALROSA |
Rio
Tinto |
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| L. M.
Van Moppes & Sons Ltd |
UK |
Industrial |
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| L.L.D.
Diamonds Ltd |
Israel |
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ALROSA |
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| Laurelton
Diamonds Inc |
Belgium |
GSS,
Botswana |
ALROSA |
Rio
Tinto |
Dominion |
| Laxmi
Diamond Pvt Ltd |
India |
GSS |
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| Lazare
Kaplan International Inc |
USA |
Namibia,
Accredited Buyer |
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| Lazyrit-D |
Russia |
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ALROSA |
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| Leo
Schachter International Ltd |
Israel |
GSS,
Botswana |
ALROSA |
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| Lieber
& Solow Ltd |
USA |
Industrial |
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| Luk
Fook |
Hong
Kong |
GSS |
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| M.
Suresh Company Private Ltd |
India |
GSS,
Botswana |
|
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Dominion |
| Mahendra
Brothers Exports Pvt Ltd |
India |
GSS |
|
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Dominion |
| Mohit
Diamonds Pvt Ltd |
India |
GSS |
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| Motiganz Diamond Group |
Israel |
Botswana,
Accredited Buyer |
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| MUNIC
GEMS NV |
Belgium |
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ALROSA |
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| Niru
Diamonds Israel (1987) Ltd |
Israel |
GSS |
|
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| Pluczenik Diamond Company NV |
Belgium |
GSS,
Botswana, Namibia |
ALROSA |
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| Pratham
International DMCC |
India |
|
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Dominion |
| Premier
Diamond Alliance LLC |
USA |
GSS |
|
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| Priti
Gems Exports Pvt. Ltd. |
India |
|
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Rio
Tinto |
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| Richold
S.A. |
Switzerland |
GSS |
|
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| Rosy
Blue (India) Pvt Ltd |
India |
GSS |
ALROSA |
|
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| Rosy
Blue NV |
Belgium |
GSS |
ALROSA |
|
Dominion |
| Ruis
Diamonds |
Russia |
|
ALROSA |
|
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| S.
Vinodkumar Diamonds Pvt Ltd |
India |
GSS |
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| S.D.
Diamond |
Russia |
|
ALROSA |
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| S.V.
Gems |
Belgium |
|
ALROSA |
|
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| Safdico
International Ltd |
Mauritius |
GSS,
Botswana, South Africa |
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| Sahar
Atid Diamonds Ltd |
Israel |
GSS |
ALROSA |
|
Dominion |
| Sakha
Diamond |
Japan |
|
ALROSA |
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| Sauraj
Diamonds NV |
Belgium |
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Dominion |
| SBMH
Group DMCC |
UAE |
GSS |
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| Schachter and Namdar (Pty) Ltd |
South
Africa |
Namibia,
Accredited Buyer in South Africa |
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| Shairu
Gems Diamonds |
India |
GSS |
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| Sheetal
Manufacturing Company |
India |
GSS |
ALROSA |
Rio
Tinto |
Dominion |
| Shree
Ramkrishna Exports |
India |
GSS |
ALROSA |
|
Dominion |
| Shrenuj
& Co Ltd |
India |
GSS,
Botswana, South Africa |
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| Shri
Hari Gems |
India |
|
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Rio
Tinto |
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| Signet
Direct Diamond Sourcing Ltd |
USA |
GSS,
Botswana |
ALROSA |
Rio
Tinto |
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| Simoni
Gems BVBA |
Belgium |
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Dominion |
| Singh
Diamonds |
India |
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|
Dominion |
| Soradiam NV |
Belgium |
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Dominion |
| Star
Diamond Group BV |
Belgium |
GSS |
ALROSA |
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| Star
Rays |
India |
GSS |
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Dominion |
| Suashish Diamonds Ltd |
India |
GSS |
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| SWINTU
DIAM BVBA |
Belgium |
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ALROSA |
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| Taché
NV |
Belgium |
GSS,
Botswana, South Africa |
ALROSA |
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| TASAKI
& Co Ltd |
Japan |
GSS |
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| Trau
Bros NV |
Belgium |
GSS,
Botswana, Namibia |
ALROSA |
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| Tunalgy |
Russia |
|
ALROSA |
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| V D
Global |
India |
GSS |
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| Venus
Jewel |
India |
GSS |
ALROSA |
Rio
Tinto |
Dominion |
| Vijay
Diamond (FZE) |
UAE |
GSS |
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| Vishindas Holaram |
India |
GSS |
|
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Dominion |
| Wing
Hang Diamond Co Ltd |
Hong
Kong |
GSS |
ALROSA |
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| Yaelstar BVBA |
Belgium |
GSS |
|
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Dominion |
| Yerushalmi Bros Diamonds Ltd |
Israel |
GSS,
Botswana |
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| Yoshfe
Diamonds International Ltd |
Israel |
GSS |
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| Yosi
Glick Diamonds (2003) Ltd |
Israel |
GSS |
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The writer can be contacted at avi@diamonds.net. Follow Avi on Twitter: @AviKrawitz and on LinkedIn.
*Picture courtesy of De Beers.
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Tags:
Alrosa, Avi Krawitz, De Beers, diamonds, Dominion, Rapaport News, Rio Tinto
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