Will Gemologists Survive Automation?

Amid the tech boom that is shaping the diamond industry, a growing number of companies are challenging the grading laboratories, arguing that assessing the 4Cs should not be a subjective science.

“Five to 10 years from now, diamond grading won’t be done by gemologists,” claimed Haim Volner, the owner of Shirtal Diamonds, whose subsidiary Shirtal DiaCam is developing an automated solution for grading. “With the progress of artificial intelligence [AI] and deep learning, computers will do the job.”

DiaCam has teamed up with Matrix, an Israel-based software-services provider, to analyze the images of diamonds taken by the DiaCam360 system — a technology that enables a 360-degree view of the diamond.

Tapping its database of “hundreds of thousands” of images allows the platform to learn how to grade the stones, Volner explained in a recent interview at the JCK Las Vegas show.

When compared to the results of grading by the Gemological Institute of America (GIA), DiaCam360 showed 90% accuracy in assessing the color of the stone. DiaCam is confident it can raise that to more than 95% by making minor adjustments from that initial trial, noted Lior Hirsh, DiaCam’s chief operating officer, who is credited with developing the concept.

The company is conducting similar analysis to determine clarity through its deep-learning techniques. It is looking for strategic investors to help market the service and take the project to the next stage.

You need both

Others are also tackling automation in grading, acknowledging that color and clarity provide the biggest hurdles since cut, shape and carat weight have more standardized measured.

Sarine Technologies has developed machines that can determine the color and clarity of a diamond, based on its concept of “repeatability and accuracy” from the analysis of tens of thousands of stones, the company has explained.

Meanwhile, both De Beers and the GIA stressed that it is important to complement the use of technology with the skills and analysis of their grading experts.

“While we have equipment with the ability to automatically grade color, clarity and carat, it is important to remember that every natural diamond is unique and therefore there will always be some stones that require greater analysis by a grading specialist,” explained Jonathan Kendall, president of De Beers Group Institute of Diamonds, which oversees the company’s grading activity. “These specialists are not only vital for grading certain stones, but also for developing equipment that is highly accurate.”

Similarly, the standards set out in the GIA International Diamond Grading System are best applied using a combination of instrumentation and experienced diamond graders who apply those standards daily, stressed Tom Moses, the GIA’s executive vice president and chief laboratory and research officer.

The GIA applies its capabilities to automate grading in other areas. For example, its melee analysis service automatically separates natural melee from potential lab-grown diamonds and simulants, and sorts the natural diamonds by color, the lab explained. Last year, the GIA began a collaboration with IBM to test an application of the tech-giant’s software using AI to predict clarity grades.

Volner differentiates DiaCam, as the company has no ambition to be a lab. Rather, he envisages labs using the technology to provide accurate and more consistent grading results than a gemologist, “who is prone to human error.” It can also be used by manufacturers, dealers or jewelers to produce fast and cost-effective evaluation of the diamond that is compatible with a grading report, the company suggested.

“The idea is not necessarily to replace the labs,” Volner explained. “But [the technology] gives companies access to a gemologist in a machine. Such automation eliminates human error, saves time and money, and improves efficiency.”

Image: Grading experts at a De Beers Group Institute of Diamonds facility. (De Beers)

Source: DCLA

Will Gemologists Survive Automation?

Amid the tech boom that is shaping the diamond industry, a growing number of companies are challenging the grading laboratories, arguing that assessing the 4Cs should not be a subjective science.

“Five to 10 years from now, diamond grading won’t be done by gemologists,” claimed Haim Volner, the owner of Shirtal Diamonds, whose subsidiary Shirtal DiaCam is developing an automated solution for grading. “With the progress of artificial intelligence [AI] and deep learning, computers will do the job.”

DiaCam has teamed up with Matrix, an Israel-based software-services provider, to analyze the images of diamonds taken by the DiaCam360 system — a technology that enables a 360-degree view of the diamond.

Tapping its database of “hundreds of thousands” of images allows the platform to learn how to grade the stones, Volner explained in a recent interview at the JCK Las Vegas show.

When compared to the results of grading by the Gemological Institute of America (GIA), DiaCam360 showed 90% accuracy in assessing the color of the stone. DiaCam is confident it can raise that to more than 95% by making minor adjustments from that initial trial, noted Lior Hirsh, DiaCam’s chief operating officer, who is credited with developing the concept.

The company is conducting similar analysis to determine clarity through its deep-learning techniques. It is looking for strategic investors to help market the service and take the project to the next stage.

You need both

Others are also tackling automation in grading, acknowledging that color and clarity provide the biggest hurdles since cut, shape and carat weight have more standardized measured.

Sarine Technologies has developed machines that can determine the color and clarity of a diamond, based on its concept of “repeatability and accuracy” from the analysis of tens of thousands of stones, the company has explained.

Meanwhile, both De Beers and the GIA stressed that it is important to complement the use of technology with the skills and analysis of their grading experts.

“While we have equipment with the ability to automatically grade color, clarity and carat, it is important to remember that every natural diamond is unique and therefore there will always be some stones that require greater analysis by a grading specialist,” explained Jonathan Kendall, president of De Beers Group Institute of Diamonds, which oversees the company’s grading activity. “These specialists are not only vital for grading certain stones, but also for developing equipment that is highly accurate.”

Similarly, the standards set out in the GIA International Diamond Grading System are best applied using a combination of instrumentation and experienced diamond graders who apply those standards daily, stressed Tom Moses, the GIA’s executive vice president and chief laboratory and research officer.

The GIA applies its capabilities to automate grading in other areas. For example, its melee analysis service automatically separates natural melee from potential lab-grown diamonds and simulants, and sorts the natural diamonds by color, the lab explained. Last year, the GIA began a collaboration with IBM to test an application of the tech-giant’s software using AI to predict clarity grades.

Volner differentiates DiaCam, as the company has no ambition to be a lab. Rather, he envisages labs using the technology to provide accurate and more consistent grading results than a gemologist, “who is prone to human error.” It can also be used by manufacturers, dealers or jewelers to produce fast and cost-effective evaluation of the diamond that is compatible with a grading report, the company suggested.

“The idea is not necessarily to replace the labs,” Volner explained. “But [the technology] gives companies access to a gemologist in a machine. Such automation eliminates human error, saves time and money, and improves efficiency.”

Image: Grading experts at a De Beers Group Institute of Diamonds facility. (De Beers)

Source: DCLA

World’s biggest diamond producer Alrosa hit by Sino-US trade war

The US trade war with Beijing has wiped out sales targets of the world’s largest diamond producer Alrosa in China and hit purchases by the country’s tourists in the west.

“When there’s any political instability or tensions, luxury goods sales immediately react, including jewellery with diamonds,” chief executive Sergei Ivanov of the Russian diamond miner said in an interview with the Financial Times. 

“We thought our sales growth in China would go up by 2 or 3 per cent, but now the outlook is likely more pessimistic — growth rates will either be neutral or slightly negative.” 

Mr Ivanov has backed a push into China, which analysts expect to drive growth in the diamond market in the next decade along with India, as Alrosa seeks to meet demand from China’s burgeoning middle class. 

The state-owned company, which produces about half the world’s rough diamonds along with De Beers, is attempting to catch up with its rival and has raised China sales from $50m to $200m in recent years. 

But headwinds from the US-China trade war and a broader market slump are hitting the industry’s profits.

Alrosa’s revenue fell 27 per cent year-on-year to Rbs70.5bn in the first quarter of 2019. Anglo American, the owner of De Beers, blamed a 6.3 per cent decline in its most recent sales period last month on a “more challenging environment” in China. 

The industry is also facing a supply glut that has tempered demand for polished stones, which analysts at Russian investment bank VTB Capital expect to decrease by 2 per cent this year and remain poor until 2021. 

Mr Ivanov said Alrosa would continue to favour price over volume despite the struggles. “We could cut the price by 10 per cent and sell everything we have, but we won’t help the market by doing that because it’d lead to prices on diamonds in the midstream falling.”

He predicted that Alrosa’s sales, which fell 38 per cent year-on-year to $988m in the first quarter this year and had continued to slump since, would continue to remain “much worse” than 2018 before normalising in the fourth quarter this year. “In the end, Christmas in the US and Chinese new year in February aren’t going anywhere. There’ll be good demand and the market will normalise,” he said. 

The slump has not deterred Alrosa from seeking new avenues for production, with its existing reserves, mostly located in Yakutia in northeastern Russia, set to run out by 2047. Mr Ivanov said new ones will probably be discovered in the near future. 

Half a world away, Alrosa opened operations in Zimbabwe this year and is increasing its presence in Angola, where it has a stake in Catoca, the world’s fourth-largest mine, and developing the $1.5bn Luaxe kimberlite project, which is expected to be even larger. 

The company has ramped up its African operations even as other foreign nationals have stopped operating or wound down their presences in Zimbabwe and Angola. 

The move comes as Russia has raised its presence in Africa through further investment in raw materials from oil to bauxite, arms sales and security advice.

Alrosa signed its deal to enter Zimbabwe after president Emmerson Mnangagwa visited Moscow this year, ahead of a larger Russia-Africa summit scheduled in Sochi on the Black Sea for October. 

But Mr Ivanov said Alrosa’s interest in the continent was entirely geological. “Reserves in other African countries have all been researched and the chance of finding a large deposit there is close to zero,” Mr Ivanov said. 

Alrosa has also overcome suspicion of Russia to grow its operations in the US, where it has reopened a New York office, increased rough diamond sales, and plans to begin selling polished diamonds.

Mr Ivanov said that 70 per cent of investors in its recent $500m bond issue were western-based, while about half the company’s free float was owned by US entities. 

“Investors don’t bring up sanctions at all any more,” he added. 

Source: DCLA

World’s biggest diamond producer Alrosa hit by Sino-US trade war

The US trade war with Beijing has wiped out sales targets of the world’s largest diamond producer Alrosa in China and hit purchases by the country’s tourists in the west.

“When there’s any political instability or tensions, luxury goods sales immediately react, including jewellery with diamonds,” chief executive Sergei Ivanov of the Russian diamond miner said in an interview with the Financial Times. 

“We thought our sales growth in China would go up by 2 or 3 per cent, but now the outlook is likely more pessimistic — growth rates will either be neutral or slightly negative.” 

Mr Ivanov has backed a push into China, which analysts expect to drive growth in the diamond market in the next decade along with India, as Alrosa seeks to meet demand from China’s burgeoning middle class. 

The state-owned company, which produces about half the world’s rough diamonds along with De Beers, is attempting to catch up with its rival and has raised China sales from $50m to $200m in recent years. 

But headwinds from the US-China trade war and a broader market slump are hitting the industry’s profits.

Alrosa’s revenue fell 27 per cent year-on-year to Rbs70.5bn in the first quarter of 2019. Anglo American, the owner of De Beers, blamed a 6.3 per cent decline in its most recent sales period last month on a “more challenging environment” in China. 

The industry is also facing a supply glut that has tempered demand for polished stones, which analysts at Russian investment bank VTB Capital expect to decrease by 2 per cent this year and remain poor until 2021. 

Mr Ivanov said Alrosa would continue to favour price over volume despite the struggles. “We could cut the price by 10 per cent and sell everything we have, but we won’t help the market by doing that because it’d lead to prices on diamonds in the midstream falling.”

He predicted that Alrosa’s sales, which fell 38 per cent year-on-year to $988m in the first quarter this year and had continued to slump since, would continue to remain “much worse” than 2018 before normalising in the fourth quarter this year. “In the end, Christmas in the US and Chinese new year in February aren’t going anywhere. There’ll be good demand and the market will normalise,” he said. 

The slump has not deterred Alrosa from seeking new avenues for production, with its existing reserves, mostly located in Yakutia in northeastern Russia, set to run out by 2047. Mr Ivanov said new ones will probably be discovered in the near future. 

Half a world away, Alrosa opened operations in Zimbabwe this year and is increasing its presence in Angola, where it has a stake in Catoca, the world’s fourth-largest mine, and developing the $1.5bn Luaxe kimberlite project, which is expected to be even larger. 

The company has ramped up its African operations even as other foreign nationals have stopped operating or wound down their presences in Zimbabwe and Angola. 

The move comes as Russia has raised its presence in Africa through further investment in raw materials from oil to bauxite, arms sales and security advice.

Alrosa signed its deal to enter Zimbabwe after president Emmerson Mnangagwa visited Moscow this year, ahead of a larger Russia-Africa summit scheduled in Sochi on the Black Sea for October. 

But Mr Ivanov said Alrosa’s interest in the continent was entirely geological. “Reserves in other African countries have all been researched and the chance of finding a large deposit there is close to zero,” Mr Ivanov said. 

Alrosa has also overcome suspicion of Russia to grow its operations in the US, where it has reopened a New York office, increased rough diamond sales, and plans to begin selling polished diamonds.

Mr Ivanov said that 70 per cent of investors in its recent $500m bond issue were western-based, while about half the company’s free float was owned by US entities. 

“Investors don’t bring up sanctions at all any more,” he added. 

Source: DCLA

Firestone Diamonds recovers largest fancy yellow diamond to date

Firestone Diamonds has recovered a 54 carat intense fancy yellow, sawable diamond from its Liqhobong mine in Lesotho.

“The Liqhobong mine has become known for its fancy yellow stones but this one is the largest we’ve recovered so far and is therefore quite special,” says Firestone Diamonds CEO Paul Bosma.

Although certain segments of the diamond market are currently struggling, the demand for unique natural stones remains positive,” he says.

The 54 carat diamond will go on sale at the next tender scheduled to take place during September 2019.

The recovery of its latest fancy yellow diamond follows the recovery of a 72 carat diamond which was recovered together with a 22 carat makeable white stone, followed by an 11 carat fancy light-pink stone in April.

Source: DCLA

Firestone Diamonds recovers largest fancy yellow diamond to date

Firestone Diamonds has recovered a 54 carat intense fancy yellow, sawable diamond from its Liqhobong mine in Lesotho.

“The Liqhobong mine has become known for its fancy yellow stones but this one is the largest we’ve recovered so far and is therefore quite special,” says Firestone Diamonds CEO Paul Bosma.

Although certain segments of the diamond market are currently struggling, the demand for unique natural stones remains positive,” he says.

The 54 carat diamond will go on sale at the next tender scheduled to take place during September 2019.

The recovery of its latest fancy yellow diamond follows the recovery of a 72 carat diamond which was recovered together with a 22 carat makeable white stone, followed by an 11 carat fancy light-pink stone in April.

Source: DCLA

Russia digs for diamonds in permafrost n Yakutia

Diamonds are forever, and so is the permanently frozen ground of Yakutia in north eastern Siberia, home to huge diamond deposits that ensure Russia’s supremacy in world production of the luxury stone.

In the city of Mirny, the sun shines almost continuously during the region’s white night season in early July, with temperatures exceeding 30 degrees Celsius.

But the summer does not last long. Yakutia is known for having the coldest winters on the planet, which drag on for nine dark months.

This region—rich in oil, gas and precious metals—is also home to eleven out of twelve mines belonging to Russia’s Alrosa group, the world’s largest producer of rough carats.

The majority state- and local government-owned company employs most of Mirny’s 35,000 inhabitants and contributes around 40 percent of the wider region’s budget in taxes.

Alrosa, which has been criticised by some locals for alleged environmental damage including polluting water supplies, has a reputation for secrecy but is now making efforts to demonstrate some of its work.

In Mirny, a gaping hole of massive depths—the abandoned mine “Mir”—stretches out into the city. It is more than a kilometre in diameter and 525 meters deep, or nearly two Eiffel towers placed end to end.

Oleg Popov, the director of Mirny’s diamond sorting centre, shows off a billiard table covered in shiny stones.

Nearly two Eiffel Towers deep

Alrosa mine

“There are 14,000 carats worth around $9 million on this table,” he said.

Explosions in -55 centigrade

“Each stone must be sorted by size,” said Irina Senyukova, leaning on stones in the nearby sorting room.

To reach the next diamond deposits themselves, visitors board a 20-seater Antonov plane and head north, across the taiga, to Nakyn, where Alrosa operates two open pit mines and is planning for a third out in the wilderness.

The most productive mine, Botuobinskaya, is currently only 130 metres deep, but the company plans to dig down 580 metres.

The operating mines will be exploitable until 2041, the company hopes.

Inside the mines, the temperature drops to -55 degrees Celsius in winter, which requires an increased use of explosives to extract diamonds.

“The climate has an impact on our machines, but they are adapted to the extreme conditions,” said Mikhail Dyachenko, deputy chief of the mine, standing on the edge of the precipice and wearing a safety helmet.

Alrosa has become more willing to show off its work
“Man will adapt to anything, most of the miners are natives of the region. They know this climate well,” he added.

Trucks go down the mine slowly, spiralling down thin dirt roads dug into the rock. The descent can last up to an hour.

In each ton of ground, there are around 6.2 carats of diamonds. After sorting, the rough diamonds are transported on secret flights to be sold around the world.

Some are flown to polishing centres in Moscow and Smolensk, a city in Western Russia.

The process takes place under heavy security, which was tightened further since a small gang of employees stole three million dollars worth of diamonds last month.

The diamonds were later recovered.

Drinking water

Mirny was founded in the mid-1950s after the discovery of the first diamonds. Its first mine functioned until 2001, and it was closed down in 2017 after a flood killed eight people.

It’s a man’s world
Last year several dams built by the company broke and villages around Yakutia’s Vilyuy River said they could no longer use it as a water source.

Russia’s environment watchdog estimated the damage to the Vilyuy basin at 22.1 billion rubles (over $330 million, 290 million euros) but said Alrosa would not be held accountable as the accident was caused by a natural disaster.

Separately, the company said in April it would provide 833 million rubles ($13 million, 11.5 million euros) over five years for a programme to improve the quality of drinking water in the river area.

Miners are exclusively men, predominantly from the region but also from the rest of Russia. Planes or helicopters carry the miners to the sites, where they work eleven hours a day for two weeks, then have a two week break.

“Local, indigenous communities lived here, and still live nearby—they are reindeer herders, but some of them go to the city to look for work,” said Dmitry Averyanov, who drives trucks that survey the mines.

As for the future, Alrosa is looking for ways to re-open Mirny’s mine. Works are not due to start before 2024 and their cost is estimated at 73 million rubles.

Source: DCLA