Midsize Stones Sluggish at Petra Diamond Tender

Petra Diamonds’ rough prices decreased at its first tender of the fiscal year as the anticipated pickup in demand proved disappointing.

The August trading session brought in $79.3 million from the sale of 696,194 carats, with like-for-like prices — those for similar categories of diamonds — falling 4.3% compared with May, the miner reported Friday.

The slowdown was primarily due to flagging prices for rough between 2 and 10.8 carats, which dropped 14% on a like-for-like basis. Prices for diamonds under 2 carats rose 1% to 2%, Petra noted.

While the tender saw strong attendance, “demand was more muted than we had expected in exiting the summer holiday period,” explained Petra CEO Richard Duffy. “The expected seasonal improvement in demand was evident for higher-quality 10.8-carat-plus stones, with solid prices realized. [However,] this was offset by slower demand for 2- to 10-carat size ranges.”

The miner did not sell any exceptional stones during the tender, it reported, though it did garner $1.7 million for a 20.9-carat yellow diamond from its Cullinan deposit.

Overall sales value rose 88% from May’s $42.1 million but slid 23% from the equivalent tender a year earlier, which took place in September 2022. Sales volume was up 49% from May and 34% year on year, while the average price jumped to $114 per carat from the previous tender’s $90.

The August tender did not include any output from the Williamson mine; Petra plans to sell material from that site at its September sale. However, the latest round did feature all the rough Petra had chosen to defer in June, when it postponed its sixth tender due to the sluggish market.

The August sale also contained 75,880 carats of goods that Petra had withdrawn from the May tender due to low bids. Prices for those goods were largely unchanged from May’s offers, but Petra expects demand to rise in the coming months.

“As we enter a seasonally stronger period [that] includes Diwali, Thanksgiving, Christmas and the Chinese New Year, we remain optimistic that jewelry demand will improve and provide some support to prices over the balance of the calendar year,” Duffy said.

Main image: Ore processing at the Williamson mine.

Source: DCLA

Agape Diamonds Receives Warning over Lab-Grown Disclosure

A US advertising watchdog has called on e-tailer Agape Diamonds to make the origins of its synthetic and simulated stones clearer.

The recommendation came from the National Advertising Division (NAD) of BBB National Programs — a nonprofit that helps businesses self-regulate — after the National Diamond Council (NDC) challenged Agape’s claims, the NAD reported last week.

Agape’s promotional material, including how it was presenting products for sale on its website, did not clearly and conspicuously disclose the origins of its stones, the NDC had argued, according to the NAD. As such, the council claimed, the online retailer and lab-grown manufacturer was violating the Federal Trade Commission (FTC) guidelines on jewelry marketing.

Agape changed its advertising across its website and social media in response to the NDC’s complaint, and the NAD declared the company’s modified disclosures effective and consistent with the FTC rules. However, other online advertising lacked “clear and conspicuous” origin disclosure, the watchdog said.

Race to the Bottom? Retailers’ Lab-Grown Doubts

The NAD urged Agape to rectify this by including words such as “simulated” or “lab-grown” immediately before the words “diamond” or “stone,” with “equal conspicuousness so as to clearly disclose the nature and origin of the product and the fact that it is not a mined gemstone.”

Agape and the NDC were unavailable for comment on Sunday. In its advertiser statement to the NAD, Agape said it was “committed to accurate and truthful advertising, as recommended by NAD and as codified in the federal regulations and enforced by the FTC.”

Source: DCLA

India’s Titan Company Buys Out CaratLane for $557M

Indian jewelry giant Titan Company will up its stake in e-tailer CaratLane to 98%, acquiring the share it didn’t already own for INR 46.21 billion ($557.2 million).

Titan, which already owns 71% of the online jewelry retailer, plans to buy an additional 27% in an all-cash deal, it said Saturday in a notice to the Bombay Stock Exchange (BSE). It intends to complete the buyout by October 31, subject to requisite approvals.

The deal values CaratLane at INR 170.01 billion ($2.05 billion), according to Rapaport calculations.

Incorporated in 2007, CaratLane operates in India and in the US through a local subsidiary. Titan first took a stake in the business in 2016.

Source: DCLA

Lucara Unearths 692ct. Rough at Karowe

Lucara Diamond Corp. has recovered a 692.3-carat diamond from its Karowe mine in Botswana, the second massive rough from the deposit this month.

The white, type IIa stone came from the EM/PK(S) unit in the south lobe, known for its large, high-quality rough, Lucara said Monday. The miner found the diamond via its XRT unit, which uses X-ray technology to identify huge stones in large pieces of ore before they get broken up.

The new discovery is the fourth diamond over 300 carats that Lucara has unearthed so far this year, including one earlier this month: a high-quality white, type IIa rough weighing 1,080.1 carats, which the miner announced on August 8.

In addition, “this stone is the 20th diamond larger than 100 carats recovered during 2023 at Karowe,” said Lucara CEO William Lamb. “The recovery of large diamonds from the EM/PK(S) lithology of the south lobe strongly supports our expectations for the underground project.”

Lamb, who replaced Eira Thomas as CEO earlier this month, will lead the continued development of Karowe’s underground expansion. The miner invested $683 million in the project, which it believes will extend the mine’s life until at least 2040, 15 years beyond the original 2025 closure date.

In its most recent results, Lucara announced a 21% drop in its second-quarter revenue to $41.1 million amid a slowdown in market demand. Profit slid 60% to $5 million.

Source: DCLA

Former De Beers Chairman Julian Ogilvie Thompson Dies

Mr Julian Ogilvie Thompson

Julian Ogilvie Thompson, former chairman and CEO of De Beers as well as of its parent company, Anglo American, died on August 11 aged 89.

Ogilvie Thompson, a South African native, first joined Anglo American in 1956. He was promoted to personal assistant to then chairman Harry Oppenheimer a year later, De Beers told Rapaport News. In 1966, he joined the board of De Beers, and he became deputy chairman in 1982. Three years later, Ogilvie Thompson took over as executive chairman of De Beers, while Oppenheimer’s son, Nicky, filled his previous role.

In 1997, Ogilvie Thompson retired as chairman but remained deputy chairman until stepping down from the company in 2002. He was committed to supporting the development of young leaders from across Africa, forming an 18-year affiliation with the Mandela Rhodes Foundation, which offers scholarship and leadership programs to youth throughout the continent.

“Julian Ogilvie Thompson — often known in the business simply as JOT — was a hugely influential figure in the history not only of De Beers and Anglo American, but also in the broader South African landscape,” a De Beers spokesperson said. “As the former chairman and chief executive of both Anglo American and De Beers, and as a proud South African, he played a key role in shaping both companies and the nation.”

Source: DCLA

Alrosa Diamond Sales Unaffected by Sanctions

Alrosa’s diamond sales have been unaffected by sanctions, according to the company’s first published set of financial results since Russia invaded Ukraine in February 2022.

First-half sales for 2023 were RUB 188.2 billion ($1.9 bn), up 0.2% from RUB 187.8bn ($1.9 bn), for H1 of 2022, and up 3.5 per cent on H1 of 2021. Net profit for H1 2023 was down 35 per cent year-on-year to RUB 55.57bn ($562.5m).

More detailed breakdowns of diamond sales are marked as being restricted by decree of the Government of the Russian Federation.

The US has imposed banking restrictions and sanctioned direct imports of Russian diamonds. But Russian stones polished elsewhere are not sanctioned.

The G7 countries were expected to impose restrictions when they met in May, but instead announced plans to consider a traceability solution.

India and Dubai have not imposed restrictions on Russian diamonds.

In its interim financial statement, Alrosa, the state-controlled diamond miner, says: “Ongoing geopolitical tensions in the region have escalated significantly as the situation regarding Ukraine continues to evolve, which remains highly volatile.

“The sanctions against Russia, in turn, have caused economically unjustified costs in a number of foreign economies, disrupted the efficiency of supply chains and trade flows.”

Source: DCLA

De Beers Loosens Buying Rules as Inventories Accumulate

De Beers will allow sightholders to defer up to half of rough purchases to early next year amid sluggish consumer demand and high midstream stockpiles, market insiders told Rapaport News Wednesday.

The miner wrote to customers on Friday, informing them that they could avoid buying parts of their allocations of 1-carat goods and larger for the rest of 2023, the sources said on condition of anonymity. The allowance is 25% by value for some boxes and 50% for others, and applies to sights 8 to 10 — which will take place in September, October and December.

The rule does not apply to the August sight, which runs this week in Botswana, they added.

De Beers does not usually let sightholders defer more than one box per category of rough diamonds in each half year. In normal circumstances, failure to buy can affect access to goods in future intention-to-offer (ITO) periods — the yearlong session for which allocations are planned.

The new concession is unusual because it allows buyers to push off purchases to a new ITO. De Beers did not specify when the final deadline would be in early 2024, the sources said.

However, it told clients they must buy at least 65% of the non-deferred goods or the deferred stones will count as refusals, the sources explained.

The move comes amid persistent weak retail sales in the US and China. Manufacturers have been carrying large inventories of the less salable polished, especially in the 0.30- to 2.99-carat sizes that originate from rough above 0.75 carats. 

“There is already a buildup of polished, and therefore there is enough…to fulfill the demand for the holiday,” said one of the sources. “[De Beers will] keep [the rough] for you rather than sightholders needing to buy it and store it themselves.”

Rough prices were stable at this week’s sight, while the buyback policy remains unchanged, the market participants noted. This allows clients to sell up to 10% or up to 30% of purchases back to De Beers, depending on the category.

“We continue to provide sightholders with elements of supply flexibility to support their business needs in response to evolving demand plans,” a De Beers spokesperson commented.

Source: DCLA