A Colorful Life: Leibish Shares the Many Hues of His 40-Year Diamond Career

Behind his small and grandfatherly stature is a man who’s not afraid to say anything, and usually does. Leibish Polnauer has been in the diamond industry for over 40 years and runs an extremely successful business. But if not for a crazy fluke and a bit of luck, that business wouldn’t exist.

Polnauer — affectionately known in the trade as simply “Leibish” — welcomed Rapaport’s editorial team to his office in Israel’s diamond bourse to talk about how he got his start, the market for colored diamonds, what he thinks of lab-grown, and how the industry has changed over the years. We also got a sneak peek at some of the jewelry pieces his company is currently working on.

The train ride epiphany
Around 1980, after several years as a diamond polisher and the loss of his job at a factory that went out of business, Polnauer went to London to try to sell a parcel of diamonds. He didn’t manage to offload a single stone, but on the train, on the way back from his business meetings, he saw an advertisement in The Guardian for crown jeweler Garrard, featuring a pear-shaped, brown diamond. Using his abundance of “Israeli chutzpah,” he called the number and told them he had diamonds to sell. The managing director invited him to his office on Regent Street, where he told Polnauer he was making a tiara for a wedding and needed 106 pear-shaped diamonds in four weeks.

Despite his cheeky admission to our team that at the time he had never even heard of pear-shaped diamonds, Polnauer took on the challenge, flew to New York, and secured the stones needed for the piece. He brought them back to London, and Garrard, thrilled with the selection, cut him his first check for GBP 106,000, equivalent to about GBP 1 million ($1.3 million) today.

He used that experience to convince Graff to do business with him. At the time, the jewelry house worked with a sultan whose wife gifted every visitor to their palace with a diamond watch, and Graff was desperate for the pink and yellow diamonds needed to create 50 to 70 watches per year. And thus began Polnauer’s career in the colored-diamond business.

Changing with the times
Throughout the years, Polnauer has watched his business grow from diamond sourcing and manufacturing to include in-house designers that create custom pieces for clients whom they usually never meet face-to-face, but who nevertheless aren’t afraid to drop massive sums of money for a beautiful, original Leibish creation.

One of the most important lessons Polnauer has learned during his time in the colored-diamond industry is that people shop first by color, then by price tag. He has broadened his business to include colored gemstones, because if someone wants a blue diamond but can’t afford it, a sapphire or tanzanite can often present a compelling and cheaper alternative.

Most of the firm’s clients are wealthy 30- to 60-year-olds who have a penchant for color, because, as Polnauer notes, “color is excitement.” They purchase multiple pieces to match their clothing. One client in Texas bought 13 rings in a two-year period because she loved color. Meanwhile, another client ordered a ring for his wife, who then decided she needed earrings to match. When those were ready, she wanted a necklace to complete the set. Polnauer was more than happy to comply, and in a four-day time span, he saw his bank account padded with an additional $500,000.

But working in the colored-diamond industry isn’t always easy. Recently, the company was tasked with sourcing dozens of matching yellow diamonds to be used for a watch created by Jacob & Co. That search took the company on a two-year, international hunt before they finally filled the commission.

Other changes over his more than four-decade career have also been difficult. He has sadly watched as the Israeli diamond-manufacturing sector has diminished in importance with India’s growth, and learned the meaning of providing added value to customers.

“People used to just want to buy a stone, but now they want to buy a product,” he says. “You have to have an internet business; you have to manufacture jewelry. You also have to really be on point with your presentation. When business was face-to-face, if you screwed someone, he would just walk away upset. Now, with the internet, he doesn’t walk away. If he doesn’t like what he gets, he sends it back, and he writes a bad report about you on Google, and you have to pay for the return shipment, so presentation is crucial.”

No lab-grown zone
While many in the industry have welcomed the advent of lab-grown as a way to make money from clients who can’t always afford natural stones, Polnauer pulls no punches about his dislike of what he calls “fakes.”

He believes lab-grown to be detrimental to the natural-diamond industry, because the fall of synthetic prices “pulls down the price of real diamonds.”

He’s also not shy about making it known how damaging he thinks De Beers was with its marketing of lab-grown.

“De Beers made a tremendous self-destructive move by introducing a product which is undermining the basic product they sell,” he explains. “They cannibalized their own sales and did a tremendous disservice to the industry.”

However, Polnauer believes when it comes to lab-grown, there is a light at the end of the tunnel.

“Lab-grown is stealing the story from natural diamonds,” he says. “But there is a saying: ‘When the music stops, the dancing stops,’ so hopefully everything will work out for the best.”

Staying optimistic
His brazenness has seen Polnauer ride out many market ups and downs, the latest challenge being the Israel-Hamas war that started when the latter attacked the country on October 7. When asked if it’s affected his business, he says it has. While he notes that those who want to buy his products still will, and those who don’t never would have anyway, he believes the negative sentiment is “poison” for an industry based on “illusion and sentiment.”

Despite it all, he remains hopeful. When it comes to the future of the trade, he thinks “fancy-colored diamonds will flourish, gemstones will flourish and the jewelry market will flourish, because I’m an optimist, and if you put that positivity out there, everything will work out.”

Source: DCLA

Russian Diamond Ban Will Have “Sunrise Period”

The G7’s sanctions on Russian-mined polished diamonds, set to go into effect March 1, will have a six-month “sunrise period” to let the industry adjust to the new rules, according to a statement from the U.S. Embassy in Botswana.

The ban will initially apply to polished diamonds at least one carat in weight, then expand in September to a half-carat and larger.

To verify the diamond’s provenance, the G7 will establish a new certification system based in Belgium. From March through August, G7 certification will be recommended; as of Sept. 1, it will be required.

G7 leaders committed in February, May and December 2023 to work collectively to reduce the revenue Russia uses to finance its illegal war against Ukraine that is derived from its diamond trade. The December G7 statement included the following language:
We will introduce import restrictions on non-industrial diamonds, mined, processed, or produced in Russia, by January 1, 2024, followed by further phased restrictions on the import of Russian diamonds processed in third countries targeting March 1, 2024. To further the effectiveness of these measures, those G7 members who are major importers of rough diamonds will establish a robust traceability-based verification and certification mechanism for rough diamonds within the G7 by September 1, 2024, and we will continue to consult with partners, including producing and manufacturing countries on its design and implementation. We will continue consultations among G7 members and with other partners including producing countries as well as manufacturing countries for comprehensive controls for diamonds produced and processed in third countries on measures for traceability.
Russia is the world’s largest rough diamond producer by volume and a significant global diamond exporter (> US $3.8 billion in exports in 2022). Its state-owned diamond mining conglomerate, Alrosa, accounts for 95% of Russian diamond production and is the largest diamond producer in the world by volume and second largest by value.
Approach

A “direct ban” on Russian imports (direct flows of non-industrial diamond goods exported directly from Russia to a G7 country) is in place by all G7 members as of January 1, 2024.
Specific measures and timelines are being developed to prevent indirect flows of non-industrial diamonds mined in or (for certain G7 partners) transited through Russia. This includes diamonds which are exported, processed and/or polished, in a third country and afterwards imported by a G7 member.
To avoid unintended negative consequences and undue burden on other diamond industry stakeholders, the G7 is consulting key partners, including producing and manufacturing countries, as well as industry, on proposed controls and traceability measures for diamonds produced and processed in third countries. This consultation will continue with virtual meetings and possible future in-person visits.
Through phased-in implementation, the indirect ban of Russian diamonds from G7 markets is expected to begin on March 1, 2024, with the banning of non-industrial natural diamonds mined in Russia sized 1.0 carat and larger.
The G7 is targeting September 1, 2024 to extend the indirect ban to all non-industrial natural diamonds mined in Russia sized 0.5 carats and larger.
To further the effectiveness of these measures, the December G7 statement indicates that those G7 members who are major importers of rough diamonds will establish a robust traceability-based verification and certification mechanism, detailed further below. This is envisaged to be fully operational by September 1, 2024.
From March 1, 2024, it will be encouraged to identify all non-Russian diamonds above one carat entering a G7 country through this traceability mechanism.
During a “sunrise period” from March 1, 2024 to August 31, 2024 documentary supply chain evidence will also be accepted by G7 countries, ahead of full operationalization of the traceability mechanism. Further details will be made available ahead of March 1st.
From September 1, 2024, use of the traceability mechanism will be required for import into the G7, for diamonds sized 0.5 carats and larger. In this context, traceability will be expected to begin at the point of the first export, rather than the mine-site, though we encourage mine-level traceability where possible.

Options are being considered with respect to how to treat existing stocks of diamonds (grandfathered diamonds) and jewelry.
A G7 technical working group, led by the European Commission, has been established to continue consultations and provide recommendations on the way forward. Governments and industry stakeholders are encouraged to engage with the technical group, with the understanding that ultimate decisions concerning the import requirements for G7 countries are taken consistent with respective national systems.
Traceability mechanism detail

To ensure the provenance of diamonds entering G7 countries, a certified traceability mechanism known as “G7 Certification” will be recommended as of March 1, 2024, and required as of September 1, 2024.
G7 Certification will verify and certify the provenance of rough diamonds from the point of first export through the use of a central import hub in Belgium during the period when the traceability mechanism system is tested. Thereafter, other credible options to the single node can be considered. Diamonds will then carry this verification throughout the supply chain, including through polishing, processing and manufacturing. This will enable stones to be checked at the point of import into the G7, ensuring their non-Russian provenance.
G7 Certification will work by using and expanding on existing tracing technologies and controls.
Diamond producers and manufacturers, throughout the supply chain, will need to incorporate validated traceability solutions into their operations. The G7 will determine and communicate standards that solution(s) will need to meet to qualify for G7 Certification.
These third-party traceability solutions will then communicate key data points, including provenance information, with a secure, independent Distributed Ledger.
To ensure the system is viable and credible, this information will be complemented by a physical check on rough diamonds, in Belgium. This check provides the G7 certificate, based on a high level of assurance, which will be carried onwards through the supply chain. This approach is needed to ensure that verification and certification is completed in a node where no Russian diamonds can be present given legal requirements that have been put in place.
Belgium is developing the details for the way this system will function. The G7 will coordinate with Belgium during this phase to ensure the system is functional and presents minimal additional costs and delays.
As noted, once this system is in place, tested, and perfected, the G7 will consider additional options and approaches beyond the central G7 import hub in Belgium.
We expect to implement mitigating measures for beneficiation (polishing in the mining country). Export of the polished, beneficiated goods to the G7 countries may be direct if appropriate measures are put in place to ensure non-contamination of Russian diamonds.
This system will provide traders, manufacturers, retailers and ultimately customers with the highest assurances of the non-Russian provenance of their diamonds in accordance with the G7 measures. Greater data intelligence and controls will also significantly enhance the overall levels of traceability in the diamond industry.

Source: DCLA

Asian Star Sales Slip Amid Weak Diamond Demand

Sales slumped at Indian diamond manufacturer Asian Star in the final three months of the year amid a weak market and an oversupply in the midstream.

Revenue on a consolidated basis — which includes subsidiaries in the US, Dubai and Hong Kong — fell 13% year on year to INR 6.98 billion ($84.1 million) in the company’s third fiscal quarter, which ended December 31, it reported last week. Sales slid 24% compared to the previous quarter. Net profit grew 37% to INR 182.5 million ($2.2 million).

Those figures reflected weak demand for diamonds in the US and Chinese markets, which discouraged jewelers from restocking. In China, gold jewelry was more popular throughout the period than those set with diamonds, according to Hong Kong jewelry retailers Chow Tai Fook and Luk Fook.

Revenue from the company’s diamond segment dropped 17% to INR 5.7 billion ($68.7 million), while sales of gold jewelry increased 9% to INR 1.74 billion ($20.9 million).

Source: DCLA

New method could simplify detection of diamond deposits

Geologists from ETH Zurich and the University of Melbourne have established a link between diamond occurrence and the mineral olivine.

In a paper published in the journal Nature Communications, the scientists explain that their method will simplify the detection of diamond deposits. The process relies on the chemical composition of kimberlites, which occur only on very old continental blocks that have remained geologically unchanged for billions of years, predominantly in Canada, South America, central and southern Africa, Australia and Siberia.

According to the study’s lead author, Andrea Giuliani, olivine is a mineral that makes up around half of kimberlite rock and consists of varying proportions of magnesium and iron. The more iron olivine contains, the less magnesium it has and vice versa.

“In rock samples where the olivine was very rich in iron, there were no diamonds or only very few,” Giuliani, who has been studying the formation and occurrence of the gemstones since 2015, said in a media statement. “We started to collect more samples and data, and we always got the same result.”

His investigations ultimately confirmed that olivine’s iron-to-magnesium ratio is directly related to the diamond content of the kimberlite. Giuliani and his team took these findings back to De Beers, who had provided them with the kimberlite samples. The company was interested and provided the scientific study with financial support and asked the researchers not to publish the results for the time being.

A slow, repetitive process
In 2019, Giuliani moved from Melbourne to ETH Zurich and, supported by the Swiss National Science Foundation, began to look for explanations for the connection between olivine’s magnesium and iron content and the presence of diamonds.

With his new colleagues, he examined how the process of metasomatism, which takes place in the earth’s interior, affects diamonds. In metasomatism, hot liquids and melts attack the rock. The minerals present in the rock react with the substances dissolved in the fluids to form other minerals.

The geologists analyzed kimberlite samples that contained olivines with a high iron content—and hence no diamonds. They discovered that olivine becomes richer in iron in the places where melt penetrates the lithospheric mantle and changes the composition of mantle rocks significantly. And it is precisely in this layer, at a depth of around 150 kilometres, that diamonds are present.

The infiltration of the melt that makes olivine richer in iron destroys diamonds. If, on the other hand, no or only a small amount of melt from underlying layers penetrates the lithospheric mantle and thus no metasomatism takes place, the olivine contains more magnesium—and the diamonds are preserved.

“Our study shows that diamonds remain intact only when kimberlites entrain mantle fragments on their way up that haven’t extensively interacted with previous melt,” Giuliani said.

A key point is that kimberlites don’t normally reach the earth’s surface in one go. Rather, they begin to rise as a liquid mass, pick up fragments of the mantle on the way, cool down and then get stuck. In the next wave, more melt swells up from the depths, entrains components of the cooled mantle, rises higher, cools, and gets stuck. This process can happen multiple times.

“It’s a real stop-and-go process of melting, ascent and solidification. And that has a destructive effect on diamonds,” Giuliani noted. If, on the other hand, conditions prevail that allow kimberlites to rise directly to the surface, then this is ideal for the preservation of the gemstones.

De Beers is already using olivine analysis
Olivine analysis is as reliable as previous prospecting methods, which are mainly based on the minerals clinopyroxene and garnet. However, the new method is easier and faster: it takes only a few analyses to get an idea of whether a given kimberlite field has diamonds or not.

“The great thing about this new method is not only that it’s simpler, but also that it finally allows us to understand why the previous methods worked,” Giuliani said. “De Beers is already using this new method.”

Source: DCLA

Botswana Assigns $65M for Stake in Belgian Manufacturer

Botswana has designated BWP 890 million ($65 million) from its new fiscal 2024-2025 budget for the purchase of a 24% stake in Belgian manufacturer HB Antwerp.

The deal, which it first announced in March, calls for the African country to supply rough from state-owned Okavango Diamond Company (ODC) to HB Botswana for five years. The partnership would operate in a similar fashion to HB’s previous supply deal with Lucara Diamond Corp, enabling Botswana to retain a share of the polished profits.

Lucara terminated its rough-supply agreement with HB in September, citing a “material breach of financial commitments” by the Belgian manufacturer as the reason for the split. That decision came on the heels of HB’s departure from cofounder and managing partner Oded Mansori, whom it has since reinstated to his original role.

There was media speculation late last year that the Botswana government was pressuring Lucara to reconnect with HB, and that the split could affect Botswana’s interest in the manufacturer. Lucara owns the Karowe mine in Botswana. The miner has since announced that it planned to form new supply deals with other vendors.

Source: DCLA

De Beers Rough Prices Slip 6% in 2023

De Beers’ prices fell last year as a prolonged oversupply in the midstream and economic challenges weighed on demand.

The company’s rough-price index, which reflects like-for-like values, dropped 6% for the 12-month period, parent company Anglo American reported Thursday.

Sales volume slipped 19% to 27.4 million carats, with the average selling price sliding 25% to $147 per carat. While the company has not published its full-year revenue, rough sales decreased 36% to $3.63 billion, according to data from De Beers’ 10 sight reports for 2023.

Output for the year was down 8% to 31.9 million carats as the company transitioned its Venetia deposit in South Africa to underground mining and processed lower-grade ore from its Canadian and Namibian sites, outweighing an increase in Botswana.

In the fourth quarter, sales volume plunged 63% year on year to 2.7 million carats, while production declined 3% to 7.9 million carats.

“De Beers offered full flexibility for rough-diamond allocations…as sightholders continued to take a cautious approach to their purchasing during the quarter as a result of the prevailing market conditions and extended cutting and polishing factory closures in India,” the company noted. “De Beers was loss-making in the second half of 2023 owing to the subdued sight sale results, reflecting conditions of cyclical lows driven by the prevailing macroeconomic environment. Whilst there has been some improvement coming into 2024, the prospects for economic growth remain uncertain and it may take some time for rough-diamond demand to fully recover.”

The miner expects to produce between 29 million and 32 million carats in 2024. However, it has cautioned that it “will assess options to reduce production in response to prevailing market conditions.”

Source: DCLA

Robust Business for Vintage Jewels at Winter Show

Seven days into the Winter Show antiques, art and design fair, there was still a steady flow of well-heeled collectors moving about the Park Avenue Armory on New York’s Upper East side. In its 70th year, the show, which ran from January 19 to 28, featured 76 exhibitors from seven countries including about nine exhibitors who specialize in collectible jewels. Several of the jewelry galleries and dealers have been longtime participants in the annual show, and nearly all were happy with business this year.

Each of the jewelry exhibitors holds a unique niche in antique and period jewels, and most say collectors were looking at a broad range of pieces that these dealers offered. As always, signed jewels were popular, but so were unsigned pieces. People were also looking for easily wearable and versatile pieces. Jewels and sketches by René Lalique were seen throughout the fair.

One of the exhibitors that had good results from pieces by the French jewelry artist was London-based Wartski, which focuses on Fabergé objects and historic European jewels, many with royal pedigree. The person behind the stand said attendees were looking for a variety of pieces from the firm’s vast collection of European and Russian jewels. Lalique was popular.

An Italian Renaissance Revival Bracelet. (Winter Show)

Benjamin Macklowe of Macklowe Gallery in New York also featured Lalique jewelry, displaying about a dozen items by the Art Nouveau jeweler at its booth this year.

“We sold across our product line. Bulgari, Cartier, Lalique and more,” he said. “Every time we sold something, regardless of the price, it was a great example of what it was.”

Macklowe’s firm handles Tiffany & Co. lamps and objects, furniture, and antique and period jewels. Among the highlights of its sales was a pair of Bulgari ruby cabochon earrings for $175,000.

A Bulgari Toi & Moi ring in platinum and yellow gold set with diamonds and a Burma ruby from Véronique Bamps. (Winter Show)

Veteran exhibitors reported feeling pleased with the outcome of the show.

This year’s installment drew “one of the best crowds” they’d ever seen, said Carrie Imberman and her brother Matthew Imberman, owners of Kentshire in New York, who have been working the Winter Show for 33 years. Like others, they say sales from the show continue after it’s over, based on the relationships they form.

Signed jewels were also popular. Among the company’s sales during the show was an Art Deco Boucheron diamond bracelet, a Hermès gold panel necklace and bombé diamond ring, and an Art Deco diamond bracelet by Cartier.

An Art Moderne gold and diamond bracelet in 18k and platinum by René Boivin. (Winter Show)

“We’ve had a good fair,” Matthew said. “We have jewels from different periods, designers and a variety of gem-set pieces. People are buying items that have a specific meaning to them.”

A La Vieille Russie has exhibited at the Winter Show almost since its inception. The company has expertise in Fabergé and other art objects of Russian origin, as well as European antique and vintage jewels. Peter Schaffer, one of the family members who lead the company, and specialist Adam Patrick were satisfied with the fair, saying they made some sales but just as importantly, they had the opportunity to meet new potential clients. For many, buying historic jewels isn’t an impulse purchase.

It’s the third time exhibiting at the Winter Show for Monaco-based dealer Véronique Bamps, who sells signed pieces from historic jewelry houses and designers. She plans to return, saying it attracts both well-cultured locals and an international crowd.

“I’ve spoken to people from a lot of countries and states,” she said. “[This show] attracts a very large crowd. And a lot of younger people who are buying pieces that they feel they could wear every day.”

Victorian ruby and diamond butterfly brooch, circa 1890. (ALVR)

For New York ladies, she added, the period is less significant. “The key is elegance when they buy jewelry,” she observed. “They fall in love, and they buy.”

Perhaps no one at the show was more pleased than Didier and Martine Haspeslagh, owners of Didier, a London-based firm that specializes in artist-designed jewels acquired on the secondary market. The couple sold several important pieces, including creations in the “five-figure” range by artists comprising Arnaldo Pomodoro, Franco Cannilla, Salvador Dali, Pablo Picasso and Sonia Delaunay, among others.

“We’ve had a very good show,” said Didier Haspeslagh. “We’ve had a number of new clients. This fair attracts people with taste, money and a need for artistic content.” People were most attracted to “big, spectacular pieces,” he continued.

18k yellow gold necklace with three abstract repoussé pendants with kinetic elements, and set with diamonds. Designed by Italian artist, Afro Basaldella, and made in the gold workshop of Mario Masenza, Rome. On offer by Didier.
(Winter Show)

Like others, Simon Teakle, whose eponymous firm is located in Greenwich, Connecticut, said that jewels by the European heritage brands were popular at the show. “There’s always a demand for signed jewels,” he noted.

Simon Teakle pair of cameo and diamond earrings by Hemmerle.
(Winter Show)

Another gallery owner who cited Art Deco jewels was James Boening, director of New York-based James Robinson, a New York-based gallery that spotlights vintage jewels, art objects, silver and flatware. He also sold items that can be worn in formal and casual surroundings. “Women are looking for jewels that are versatile,” he said. “Pieces that can be worn with jeans. Pieces that are more approachable.”  

American black opal and diamond cluster ring mounted in platinum and 14k gold, circa 1910, from James Robinson. (Winter Show)

Still, not everyone experienced successful jewelry sales at the show. Tim Martin, owner of New York-based S.J. Shrubsole specializes in vintage jewels, silver and art objects. While the other two categories did well, jewelry sales were slow, he said.

Source: DCLA