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In-Depth

Diamond trade gets to the source

With the Russia-Ukraine war continuing, source verification moved up the industry’s agenda as companies worked to comply with both sanctions and consumer preferences.

By Rapaport News
“There has been huge interest from all the different players in the industry over the last month or two, since the conflict broke out, with regards to traceability,” Sarine Technologies CEO David Block told Rapaport Magazine in mid-May. “What used to be regarded as something that’s nice to have and maybe will happen in the future, people now understand this is something that is needed.”

De Beers unveiled an expanded version of blockchain platform Tracr during May, noting that the geopolitical situation had accelerated its plans. The company can now trace all of its diamonds to the jewelry retailer; the platform stores each stone’s specifications and gives it an identification number. Another traceability service that moved from its pilot phase to a full launch during the month was Belgium-based company iTraceiT. And earlier this year, the Gemological Institute of America (GIA) said it was developing a consumer-facing provenance program.

Meanwhile, the Rapaport Group banned Russian diamonds from its RapNet trading platform, regardless of where they were manufactured.

Retail feels the pinch
Brilliant Earth lowered its revenue guidance for 2022 as geopolitical and economic concerns weighed on retail demand. The online-focused jeweler expects sales of $450 million to $470 million, versus an earlier outlook of $485 million to $500 million.


Blue ribbon
The much-hyped De Beers Cullinan Blue sold for HKD 450.9 million ($57.5 million) at a special Sotheby’s auction in Hong Kong.


Rocking the show
This pear-shaped, 228.31-carat, G-color, VS1-clarity stone made history as the largest white diamond ever to sell at auction. Named The Rock, it fetched $21.9 million at Christie’s Magnificent Jewels in Geneva on May 11.


Brilliant Earth under fire
Brilliant Earth removed a promotion from its advertising material after competitor Blue Nile lodged a complaint with a regulatory body. The ad for “free diamond earrings” was misleading because it failed to disclose that the complimentary jewelry contained lab-grown stones, Blue Nile argued. Blue Nile brought the matter to the National Advertising Division (NAD), part of industry self-regulator BBB National Programs.


49%
Jewelry sales at Richemont grew 49% to EUR 11.08 billion ($11.7 billion) for the fiscal year that ended March 31, amid a global market recovery. The US and Europe put in strong performances, said the company, which owns Cartier and Van Cleef & Arpels.


India seeks larger share of lab-grown market
India’s Gem & Jewellery Export Promotion Council (GJEPC) has asked the government for help promoting the country’s lab-grown diamond industry. Among the group’s proposals is to include synthetics in the production-linked incentives (PLI) scheme, which encourages manufacturing by offering benefits to businesses. The sector has the potential to contribute 150 million carats of polished stones a year and employ one million workers, the council estimated.


Restoring the land
Nongovernmental organization Resolve has launched a project to rehabilitate land affected by artisanal and small-scale diamond mining in Africa. Starting in Sierra Leone, the Peace Diamonds Restoration Initiative will combat problems such as the loss of farming land. Many pits fill up with water and become safety hazards when miners leave, Resolve explained.


Alrosa might sell rough to Gokhran
Russia’s state gem depository could buy diamonds from Alrosa this year, the country’s finance minister reportedly said. The potential move comes amid Western sanctions against Russia and Alrosa that have threatened the company’s ability to sell rough. “We do not rule out the possibility of Gokhran purchasing diamonds produced by Alrosa,” Reuters quoted Anton Siluanov as saying in late April. “The amount will be determined later.”


End in site?
Petra Diamonds announced it was “exploring a responsible exit” from its Koffiefontein mine in South Africa. It may be possible for another owner to extend the site’s life span beyond its current scheduled closure date of 2025, management noted. The company has begun a “right-sizing” operation at the mine and expects to reduce worker numbers.


Fair value
Sarine Technologies has begun pricing certain diamond scans according to stones’ value rather than purely by weight. This enables clients to put large but cheap rough through Galaxy planning machines at a lower cost, the company said. Scanning these items had been uneconomical when it was weight determining the prices.


Movers & Shakers
  • The London Diamond Bourse (LDB) has elected David Troostwyk as vice president. Troostwyk, director of polished-diamond company Salotro, is already a member of the UK exchange’s board and works closely with the Young Diamantaires group. The election took place on May 12 at the bourse’s first in-person annual general meeting since 2019. Alan Cohen will remain as president.


  • Moshe Salem will serve another term as president of the Diamond Club West Coast (DCWC). Salem is president of MS Diamonds and Jewelry and has been part of the DCWC since 1988. The vote that reaffirmed his appointment also saw Kalpesh Jhaveri and Antranig (Tony) Ayvazian reelected as co-vice presidents. Founded in 1946, the Los Angeles-based DCWC has about 275 members.


  • The American Gem Society (AGS) has named Lisa Bridge as president of its board of directors. The CEO of US retailer Ben Bridge Jeweler will serve a one-year term, taking over from Michael Richards of Underwood Jewelers. The AGS made the announcement at its annual Conclave in Oklahoma City, Oklahoma, in April. Alexis Padis, president of Padis Jewelry, will become the group’s president-elect.


  • Fawaz Gruosi has departed his position as creative consultant to the jewelry house that bears his name. Gruosi failed to reach a licensing deal with holding company Creative Luxury Holding (CLH) for his name and the brand following lengthy negotiations, Rapaport Magazine understands. Gruosi is also the founder of De Grisogono, a Swiss luxury jeweler that he left three years ago.


In memoriam
  • Sanjay Shah, a partner at Indian diamond manufacturer KBS Group, has died. Shah was a convener of the diamond panel committee at the country’s Gem & Jewellery Export Promotion Council (GJEPC), and was an active member of the trade group’s committee of administration. He was a board member for the World Diamond Council (WDC) and the International Diamond Manufacturers Association (IDMA).


  • Steven Kaiser, longtime Swiss watch specialist and CEO of Kennedy North America, died suddenly on May 20 at the age of 68. During his time in the industry, Kaiser served on the board of directors of various industry organizations, including the Jewelers’ Security Alliance (JSA), where he had been chair since 2019. He is survived by his wife of 39 years, Vivian, and his two children, Jeff and Emily.

Article from the Rapaport Magazine - June 2022. To subscribe click here.

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