Debswana Resumes Production at Three Mines

by Admin on April 20th, 2009

Debswana, the joint venture between De Beers and the Botswana government, has resumed operations at three of its mines after a two-month shutdown at the sites. De Beers said that operations at the Jwaneng, Orapa and Letlhakane mines restarted on Wednesday, with 5,800 people returning to work. Production at the Damtshaa mine and the Orapa No. 2 Plant will remain suspended until the end of 2009, De Beers said.

Production was suspended in February due to reduced demand for rough diamonds from Diamond Trading Company (DTC) sightholders, brought about by the global economic crisis. “The economic downturn has impacted all stages of the diamond pipeline, and as retailers have lowered their level of purchasing it has taken time for inventory to work through the pipeline leading to a disproportionately negative knock-on effect on production,” said Stephen Lussier, chairman of De Beers Botswana. “We have begun to see signs of improvement in the market and expect this to continue as the year unfolds.”

The resumption of mining follows reports of increased demand and higher sales at the March-April DTC sight. The sight had an estimated value of $200 million, approximately double the sales at each of the three previous sights. DTC sales for the first quarter were nevertheless about 76 percent down from last year. Underpinning its difficult situation, the mining giant recently took a $500 million loan from its shareholders to help weather the depressed market in 2009.

Christopher LaFemina, analyst at Barclays Capital, wrote last week, in a note concerning the drag that De Beers may have on parent company Anglo American, that the extent of De Beers problems may be underappreciated by the market. “We are concerned that more shareholder loans may be necessary to keep De Beers afloat,” LaFemina wrote.

LaFemina said he expects demand for diamonds to lag behind the upturn in the equity markets and the potential recovery in the global economy. “We believe diamond demand and prices will only gradually recover after 2009 and will not get back to 2007 levels until at least 2012,” he added.

LaFemina concluded that De Beers should ultimately be an incremental negative for the Anglo share price. Anglo owns 45 percent of De Beers, with the Oppenheimer family holding 40 percent and the Botswana government 15 percent.

JFK Officials Seize $800K Worth of Uncertified Diamonds

by Admin on April 20th, 2009

 

Rough diamonds worth $800,000 were reportedly seized by customs officials two weekends ago at JFK Airport, after the jewelers carrying the stones failed to produce the required documentation for the gems. Two U.S. jewelers, who arrived from Sierra Leone by way of London, were caught with 28 rough diamonds that weighed a total of 1,200 carats, according to a report by NBC New York. The diamonds were headed for Brentwood, New York, the report noted.

Customs officials confiscated the stones after the jewelers could not provide their Kimberly Process certification, and thus could not prove that they were not conflict diamonds. By definition, conflict — or “blood” — diamonds are those that are used to fund conflict in a country. 

Sierra Leone became synonymous with the term “blood diamonds” during the decade-long civil war in that country that ended in 2002. Charles Taylor, the former president of Liberia, is currently standing trial for war crimes for his role in supplying weapons to rebel groups in Sierra Leone in return for diamonds. According to the World Diamond Council, the only known conflict diamonds currently in the market come from Cote d’Ivoire.

Future Grooms Seek Fake Diamonds to Save Cash

by Admin on April 20th, 2009

 

 

Brides in New York appear to be among the victims of the recession, with retailers saying more grooms are buying cubic zirconia rings instead of diamonds. New York diamond district retailers said that an increasing number of would-be husbands are purchasing the fake diamonds for their brides’ engagement rings to save money during the economic downturn.

“There are people who will buy a setting and put a cubic zirconia in it for now, hoping to replace it later,” Shella Eckhouse, a private jeweler, said of the recent trend. Luxury jeweler Kara Ackerman said some of those grooms not purchasing cubic zirconia settings are instead turning to one-carat diamond rings instead of the more traditional and expensive two-carat rings. “The budget used to be $65,000. Now it’s closer to $10,000,” she said.

Ackerman added that not all brides appear to be happy with the cost-cutting measures of their potential spouses. “The women are little hostile about it,” Ackerman said. “They have been waiting a long time for a ring!”