De Beers Reveals Overhaul of Sight System

De Beers plans to split sightholders into three categories and offer each group a more bespoke selection of rough diamonds as part of changes to its sales system.

Manufacturers, dealers and retailers will sign specific supply contracts designed for the “broad needs” of each business model, a De Beers spokesperson told Rapaport News Thursday.

The arrangement will take effect in January 2021, following the end of the current sightholder contract, which runs until December 2020. Applications start this week, giving companies four weeks to complete the process, a source in the rough market said on condition of anonymity.

The manufacturer contract will “support the core strengths” of each cutting firm, De Beers explained. Dealers — those that buy rough for resale — will receive a “regular and consistent range of goods,” especially in higher-volume areas. The retailer contract is tailored for companies that sell jewelry to consumers and also have polishing operations. Beneficiation contracts — for sightholders that commit to polishing certain goods in the country where they were mined — will remain as modified versions of the manufacturing contract.

“It is our ambition to offer supplies and services that can help to better support the unique strengths of the great businesses of the diamond midstream, and we feel this approach is the optimal way of achieving this,” the spokesperson said.

The company has long been contemplating changes to its sightholder system amid difficult conditions in the manufacturing and trading sectors, such as tight liquidity and an inventory imbalance. Its supply rules — based on a method known as “demonstrated demand” — have also faced criticism.

Under that system, De Beers mainly determines clients’ rough supply using their purchasing record — a controversial policy because it can encourage sightholders to take on unprofitable inventory to secure future access to its goods. It offers the diamonds in prearranged boxes that customers either take or leave, with only limited flexibility to adjust the contents. That sometimes forces sightholders to buy items they don’t want just so they can get the stones they need.

The current method has come under particular scrutiny given the excess polished in the market last year, which contributed to a slump in rough demand. Last July, Dutch bank ABN Amro urged its clients to stop buying unprofitable rough, and attacked the practice of making purchases purely to maintain supply allocations.

De Beers’ revenue fell 24% to $4.61 billion in 2019, while underlying earnings slid 87% to $45 million, as the supply glut left sightholders unwilling to buy more rough. The situation forced the miner to allow unprecedented refusals and other concessions to avoid flooding the market with goods.

The “need for us to adapt to the changing world” has been the subject of talks between De Beers and sightholders for a while, the company spokesperson added.

“This new approach to sightholder contracts is one way we are going about this,” he noted.

Source: DCLA

De Beers Reveals Overhaul of Sight System

De Beers plans to split sightholders into three categories and offer each group a more bespoke selection of rough diamonds as part of changes to its sales system.

Manufacturers, dealers and retailers will sign specific supply contracts designed for the “broad needs” of each business model, a De Beers spokesperson told Rapaport News Thursday.

The arrangement will take effect in January 2021, following the end of the current sightholder contract, which runs until December 2020. Applications start this week, giving companies four weeks to complete the process, a source in the rough market said on condition of anonymity.

The manufacturer contract will “support the core strengths” of each cutting firm, De Beers explained. Dealers — those that buy rough for resale — will receive a “regular and consistent range of goods,” especially in higher-volume areas. The retailer contract is tailored for companies that sell jewelry to consumers and also have polishing operations. Beneficiation contracts — for sightholders that commit to polishing certain goods in the country where they were mined — will remain as modified versions of the manufacturing contract.

“It is our ambition to offer supplies and services that can help to better support the unique strengths of the great businesses of the diamond midstream, and we feel this approach is the optimal way of achieving this,” the spokesperson said.

The company has long been contemplating changes to its sightholder system amid difficult conditions in the manufacturing and trading sectors, such as tight liquidity and an inventory imbalance. Its supply rules — based on a method known as “demonstrated demand” — have also faced criticism.

Under that system, De Beers mainly determines clients’ rough supply using their purchasing record — a controversial policy because it can encourage sightholders to take on unprofitable inventory to secure future access to its goods. It offers the diamonds in prearranged boxes that customers either take or leave, with only limited flexibility to adjust the contents. That sometimes forces sightholders to buy items they don’t want just so they can get the stones they need.

The current method has come under particular scrutiny given the excess polished in the market last year, which contributed to a slump in rough demand. Last July, Dutch bank ABN Amro urged its clients to stop buying unprofitable rough, and attacked the practice of making purchases purely to maintain supply allocations.

De Beers’ revenue fell 24% to $4.61 billion in 2019, while underlying earnings slid 87% to $45 million, as the supply glut left sightholders unwilling to buy more rough. The situation forced the miner to allow unprecedented refusals and other concessions to avoid flooding the market with goods.

The “need for us to adapt to the changing world” has been the subject of talks between De Beers and sightholders for a while, the company spokesperson added.

“This new approach to sightholder contracts is one way we are going about this,” he noted.

Source: DCLA

Your Engagement Ring Probably Has A Hidden Serial Number You Didn't Know About

If you've ever gone through the process of shopping for an engagement ring, you'll know there can be an overwhelming number of things to consider.

Aside from the look and style of your ring, you quickly start to learn an awful lot about diamonds, from the cut, to the colour and clarity.

What you may not know is most diamonds in Australia over the last 10 years have been laser inscribed with a serial number likened to a 'fingerprint' -- which makes it easier to trace should the unfortunate event that your engagement ring is lost or stolen ever take place.

This code in turn makes your ring a 'low risk' theft item because it's easy for police to trace it. But don't go pulling your ring off your finger to check for that little serial number just yet.

The code is inscribed directly onto the girdle of the diamond which is quite difficult to get to when it's in a setting and it can't be seen with the naked eye either, having to be checked under a microscope instead.

The laser inscription can only be seen under a microscope. Image: Supplied

Speaking to 10 daily, Roy Cohen, a diamond expert from Certified Diamond Insurance, said this spot was specifically chosen instead of on the engagement ring band as this could be lost if it was melted down. Yet removing the code from the diamond itself is near impossible.

"It cannot be removed unless the diamond goes back to a diamond polishing factory where it is put back on the wheel and polished off. I mean, there are very few diamond polishing factories in Australia so the chances of that happening are very remote," Cohen said.

"It’s even harder than for example, the engine number of a motor car. They could just machine it off. I mean, anyone could do that. But with a diamond? No. Only diamond cuts diamond."

A close up of a laser inscription code. Image: Supplied

This process of inscription is completed by Certified Diamond Insurance (CDI) who are in partnership with a Australia’s leading diamond certifier, Diamond Certification Laboratory of Australia (DCLA), as well as the Woodina Underwiting Agency.

Together they're working towards driving the costs associated with insuring diamonds down for Australians, with new research finding almost half of Australia diamond engagement rings aren't insured. If they are, 70 percent of these have inadequate insurance as they're usually lumped with other items as part of home contents insurance.

"If you go and get household insurance, you’ll be paying a standard kind of rate and because they cover everything, you’ll be paying slightly higher premiums," Cohen said.

"What we’ve done is we’ve pulled out all certified diamonds that are laser inscribed and we only ensure those diamonds. These are the lowest risk diamonds."

Laser inscribed diamonds are considered 'low risk' diamonds. Image: Supplied

According to Cohen, these diamonds are a 'thief's worst nightmare' because they often aren't able to tell if it has been laser inscribed or not.

"Thieves can get caught so much easier with this type of diamond. If they go and sell that to a hock shop and it has the laser inscription on it, it is very easy to identify that that diamond has been stolen," he told 10 daily.

So how can you check if your diamond has the laser inscription on it or not? According to Cohen, it's as easy as checking your diamond certification certificate.

"Most diamonds that are of value are sold with diamond grading certificates in Australia and most of those are laser inscribed," he said.The certificate will make note that the diamond has been laser inscribed and it will have the number that’s on the actual diamond.

Yet while most diamonds now have the laser inscribed code on them, if your engagement ring happens to be an heirloom or has been passed down through the family, it likely doesn't. The upside is CDI are offering complementary diamond grading and laser inscription for diamonds owners in this situation.

"So if anybody wants take advantage of the lower premiums that CDI is offering and the diamond is not certified and not laser inscribed, we will actually do that for them," he said.

"The diamond gets removed from the setting, the diamond is graded, laser inscribed and then set back in the setting. Then it is eligible for CDI insurance."

Roy Cohen. Image: Supplied

CDI are further working on establishing a nation wide data base where individuals can register their ring along with it's details and pictures. Should the ring ever be lost or stolen, it can then be flagged in this system, making it easier to locate.

"Then wherever it ends up or if it’s ever checked against that data base or it ends up at a diamond grading laboratory, it will be identified," Cohen said.

"So the benefit is, let's say it was a heritage diamond from your grandma or something like that, you actually have a chance of getting the diamond back."

Valentina Todoroska

10 daily Lifestyle Editor

Your Engagement Ring Probably Has A Hidden Serial Number You Didn't Know About

If you've ever gone through the process of shopping for an engagement ring, you'll know there can be an overwhelming number of things to consider.

Aside from the look and style of your ring, you quickly start to learn an awful lot about diamonds, from the cut, to the colour and clarity.

What you may not know is most diamonds in Australia over the last 10 years have been laser inscribed with a serial number likened to a 'fingerprint' -- which makes it easier to trace should the unfortunate event that your engagement ring is lost or stolen ever take place.

This code in turn makes your ring a 'low risk' theft item because it's easy for police to trace it. But don't go pulling your ring off your finger to check for that little serial number just yet.

The code is inscribed directly onto the girdle of the diamond which is quite difficult to get to when it's in a setting and it can't be seen with the naked eye either, having to be checked under a microscope instead.

The laser inscription can only be seen under a microscope. Image: Supplied

Speaking to 10 daily, Roy Cohen, a diamond expert from Certified Diamond Insurance, said this spot was specifically chosen instead of on the engagement ring band as this could be lost if it was melted down. Yet removing the code from the diamond itself is near impossible.

"It cannot be removed unless the diamond goes back to a diamond polishing factory where it is put back on the wheel and polished off. I mean, there are very few diamond polishing factories in Australia so the chances of that happening are very remote," Cohen said.

"It’s even harder than for example, the engine number of a motor car. They could just machine it off. I mean, anyone could do that. But with a diamond? No. Only diamond cuts diamond."

A close up of a laser inscription code. Image: Supplied

This process of inscription is completed by Certified Diamond Insurance (CDI) who are in partnership with a Australia’s leading diamond certifier, Diamond Certification Laboratory of Australia (DCLA), as well as the Woodina Underwiting Agency.

Together they're working towards driving the costs associated with insuring diamonds down for Australians, with new research finding almost half of Australia diamond engagement rings aren't insured. If they are, 70 percent of these have inadequate insurance as they're usually lumped with other items as part of home contents insurance.

"If you go and get household insurance, you’ll be paying a standard kind of rate and because they cover everything, you’ll be paying slightly higher premiums," Cohen said.

"What we’ve done is we’ve pulled out all certified diamonds that are laser inscribed and we only ensure those diamonds. These are the lowest risk diamonds."

Laser inscribed diamonds are considered 'low risk' diamonds. Image: Supplied

According to Cohen, these diamonds are a 'thief's worst nightmare' because they often aren't able to tell if it has been laser inscribed or not.

"Thieves can get caught so much easier with this type of diamond. If they go and sell that to a hock shop and it has the laser inscription on it, it is very easy to identify that that diamond has been stolen," he told 10 daily.

So how can you check if your diamond has the laser inscription on it or not? According to Cohen, it's as easy as checking your diamond certification certificate.

"Most diamonds that are of value are sold with diamond grading certificates in Australia and most of those are laser inscribed," he said.The certificate will make note that the diamond has been laser inscribed and it will have the number that’s on the actual diamond.

Yet while most diamonds now have the laser inscribed code on them, if your engagement ring happens to be an heirloom or has been passed down through the family, it likely doesn't. The upside is CDI are offering complementary diamond grading and laser inscription for diamonds owners in this situation.

"So if anybody wants take advantage of the lower premiums that CDI is offering and the diamond is not certified and not laser inscribed, we will actually do that for them," he said.

"The diamond gets removed from the setting, the diamond is graded, laser inscribed and then set back in the setting. Then it is eligible for CDI insurance."

Roy Cohen. Image: Supplied

CDI are further working on establishing a nation wide data base where individuals can register their ring along with it's details and pictures. Should the ring ever be lost or stolen, it can then be flagged in this system, making it easier to locate.

"Then wherever it ends up or if it’s ever checked against that data base or it ends up at a diamond grading laboratory, it will be identified," Cohen said.

"So the benefit is, let's say it was a heritage diamond from your grandma or something like that, you actually have a chance of getting the diamond back."

Valentina Todoroska

10 daily Lifestyle Editor

De Beers Lets Sightholders Defer Chinese Goods

De Beers has allowed clients to forgo buying certain rough diamonds at this week’s sight, as the coronavirus outbreak has raised concerns about a polished glut.

The miner has let sightholders defer purchases of goods that produce the types of polished popular in the Chinese retail market, a source at the sight told Rapaport News Wednesday. The concessions apply to 1- to 2-carat rough diamonds that can make polished under a carat, as Chinese demand is highly focused on that size category, especially the 0.30- to 0.50-carat range.

Instead of taking up those allocations at this sale, the second of the year, customers will be able push them back to sights 3, 4 and 5. Those who already deferred their supply from the last two sales of 2019 will only be able to delay their purchases to sight 3, which begins March 30.

“People are very afraid of the market, and stocks are building because there are no sales to the Far East,” the source said on condition of anonymity. De Beers declined to comment on the move.

De Beers apportions rough supply to sightholders based mainly on their purchase history, and divides those allocations across the 10 sights that take place during the year. Clients can usually defer only a limited proportion of the goods earmarked from them, but the miner has provided more flexibility of late because of the weak market.

In the second half of last year, De Beers offered unprecedented measures, such as letting customers refuse half of the goods in a box or sell up to 30% of their rough purchases back to the miner.

It ended the special rules at the December sight, as an oversupply of polished in the midstream started to ease. However, the coronavirus epidemic has lowered jewelry demand in China, where the outbreak started, creating uncertainty about manufacturers’ ability to sell their polished. Concerns escalated this week when it emerged the disease had spread beyond the Far East to Europe and Iran.

“The virus has the potential to badly damage the market for the next few months, but we don’t know [the extent of the impact],” an executive at a Mumbai-based sightholder commented. “If it goes on for a long time, it will be a problem not only for De Beers, but for many, many companies in India.”

Source: DCLA

De Beers Lets Sightholders Defer Chinese Goods

De Beers has allowed clients to forgo buying certain rough diamonds at this week’s sight, as the coronavirus outbreak has raised concerns about a polished glut.

The miner has let sightholders defer purchases of goods that produce the types of polished popular in the Chinese retail market, a source at the sight told Rapaport News Wednesday. The concessions apply to 1- to 2-carat rough diamonds that can make polished under a carat, as Chinese demand is highly focused on that size category, especially the 0.30- to 0.50-carat range.

Instead of taking up those allocations at this sale, the second of the year, customers will be able push them back to sights 3, 4 and 5. Those who already deferred their supply from the last two sales of 2019 will only be able to delay their purchases to sight 3, which begins March 30.

“People are very afraid of the market, and stocks are building because there are no sales to the Far East,” the source said on condition of anonymity. De Beers declined to comment on the move.

De Beers apportions rough supply to sightholders based mainly on their purchase history, and divides those allocations across the 10 sights that take place during the year. Clients can usually defer only a limited proportion of the goods earmarked from them, but the miner has provided more flexibility of late because of the weak market.

In the second half of last year, De Beers offered unprecedented measures, such as letting customers refuse half of the goods in a box or sell up to 30% of their rough purchases back to the miner.

It ended the special rules at the December sight, as an oversupply of polished in the midstream started to ease. However, the coronavirus epidemic has lowered jewelry demand in China, where the outbreak started, creating uncertainty about manufacturers’ ability to sell their polished. Concerns escalated this week when it emerged the disease had spread beyond the Far East to Europe and Iran.

“The virus has the potential to badly damage the market for the next few months, but we don’t know [the extent of the impact],” an executive at a Mumbai-based sightholder commented. “If it goes on for a long time, it will be a problem not only for De Beers, but for many, many companies in India.”

Source: DCLA

Angola Seizes 6,579 carats of Illegal Rough Diamonds

Authorities in Angola have seized 6,579 carats of rough diamonds in a crackdown on illegal mining and immigration.

Nineteen cars and $275,000 in cash were also confiscated, according to the government-run Angop news agency.

Operation Transparency was aimed at more than 700 small diamond prospectors in the country. Two thirds were found not to meet the interior ministry’s requirements and only 260 have been allowed to carry on prospecting.

The government also deported many migrant working in diamond mines from the neighboring Democratic Republic of the Congo, a move that attracted sharp criticism from the independent Human Rights Watch.

The operation was launched in the north-eastern Lunda Norte Province December 2018.  

Source: DCLA