Namibia bemoans popularity of lab-grown diamonds on global market

Namibia is one of Africa’s top five diamond exporters, right behind Angola, Botswana, and South Africa. In 2022, the country exported more than $940 million worth of diamonds.

The world’s demand for natural diamonds has bounced back from a slump during the COVID-19 pandemic, with Namibia’s largest marine dining company, Debmarine, reporting a sales increase of 83% in 2022 from the previous year.

Still, Debmarine CEO Willy Mertens is worried about competition from synthetic diamonds, sector of the business that could cost many Namibians their jobs.

Though trained jewelers can tell the difference between lab-grown and natural diamonds, there’s nothing obvious to distinguish lab-grown diamonds from natural ones.

The Modern Mining publication recently said that in 2022, lab-grown diamond jewelry surpassed 10% of the market of global jewelry sales for the first time. The publication said artificial diamond sales are forecast to continue growing at an annual double-digit percentage rate in coming years.

Namibia, where workers extracted 2.1 million carats in diamonds in 2022, is embarking on a campaign to tout natural diamonds as environmentally sound and holding greater value for the money.

“We’ve seen in the past couple of years that lab-grown diamonds, or synthetics as you call them, have sort of infiltrated the natural diamond market,” said Mertens. ” … people were first marketing them as real diamonds and we’ve done a lot of work around trying to differentiate them.”

One of the challenges of marketing Namibian natural diamonds is the environmental impact that diamonds have on the landscape.

Mertens said Debmarine invests a significant amount of its profits into environmental rehabilitation and restoration of landscapes and the seabed damaged by mining.

“The restoration of the seabed actually happens naturally as the waves move,” Mertens said. “So what we are doing is that we are monitoring that, and what we do is we mine out a specific area and we leave an area next to it vacant, and over time we monitor how the area where we have recovered diamonds looks like compared to the one that was not touched and we’ve seen that it takes about three to 10 years maximum for that to completely restore. By completely restoring, mean about 70% of the organisms have returned to that place. On the land, it is sand that we are moving and what we do now is that we are using that same sand to keep the sea walls in tact.”

Mertens recently paid a courtesy call on Namibian President Nangolo Mbumba, to introduce the De Beers global ambassador for natural diamonds, Hollywood actor Lupita Nyong’o, and talk to the president about challenges facing Namibia’s diamond industry.

De Beers Natural Diamonds Global Ambassador Lupita Nyong’o, left, Namibia President Nangolo Mbumba, center, and Debmarine CEO Willy Mertens in Windhoek, Namibia, July 19, 2024. (Vitalio Angula/VOA)
De Beers Natural Diamonds Global Ambassador Lupita Nyong’o, left, Namibia President Nangolo Mbumba, center, and Debmarine CEO Willy Mertens in Windhoek, Namibia, July 19, 2024. (Vitalio Angula/VOA)
President Mbumba lamented a proposal for the Kimberley process — the process meant to screen out so-called “conflict diamonds” from entering the international market — to begin certifying all diamonds in Antwerp, Belgium.

The Group of Seven largest economies said that is an effort to prevent Russian diamonds from being sold abroad.

Mbumba said the measure would hurt African diamond producers.

“Recently, the decision was made by the G7 countries to route all rough and polished diamonds destined for G7 countries via Belgium,” said Mbumba. “This decision poses a serious risk and threat to our economies, especially the economies of Angola, Botswana and Namibia by increasing the cost as well as curtailing freedom of trade for our countries’ products.”

Namibia’s president said he and his counterparts from Angola and Botswana have written a letter to the G7 to ask them to halt their plans.

Source: DCL

Botswana aims to negotiate bigger stake in HB Antwerp diamond dealer

Botswana intends to renegotiate its proposed purchase of a stake in Belgian gem dealer HB Antwerp to double the size of its shareholding at no extra cost following the downturn in the diamond market, the country’s mines minister said on Tuesday.

Botswana is the world’s biggest diamond producer by value, meaning its economy has been disproportionately hit by a drop in demand for diamonds caused by a global economic slowdown.

Lefoko Moagi told Parliament the weaker diamond market had also affected the company’s valuation, giving the country room to renegotiate.

“We will not be injecting more capital, but we will get more shares for the same amount proposed in 2023,” Moagi said. “Instead of the 24%, we will negotiate to get 49.9% for the same amount initially proposed.”

Finance ministry budget documents showed in February that the country had set aside 890 million pula ($65.95 million) for the 24% stake, valuing the Belgian company at about $275-million.

The HB Antwerp deal was announced during Botswana’s negotiations for a new sales contract with Anglo American’s diamond unit De Beers in March 2023.

As Botswana sought to increase its power to market its stones outside a decades-old agreement with De Beers, it said the HB Antwerp deal would strengthen its presence in the downstream diamond industry.

It includes supplying the trader with rough diamonds for five years through the state-owned Okavango Diamond Company (ODC).

Source: miningweekly

Lucara sold 76 387 ct during the second quarter

Diamond producer Lucara Diamond Corp sold 76 387 ct of diamonds, generating $41.3-million in revenue, during the second quarter ended June 30.

The company recovered 92 419 ct of diamonds at a grade of 12.9 ct for every 100 t of direct milled ore.

Additionally, 8 349 ct were recovered from processing historic recovery tailings. The company recovered 206 special diamonds, defined as rough diamonds weighing more than 10.8 ct, representing 6.9% by weight of the total recovered carats from the second quarter’s processed ore. This aligns with the company’s expectations, Lucara said.

Noteworthy recoveries during the period included a 491 ct Type IIa diamond, a 225.6 ct Type IIa diamond and a 109 ct Type IIa diamond.

Significant progress was made in shaft sinking for the ventilation and production shafts during the second quarter, with the critical path ventilation shaft ahead of the July 2023 rebase schedule. By the end of the quarter, the production and ventilation shafts had reached depths of 557 m below collar and 550 m below collar, respectively.

Operational highlights from the Karowe mine for the quarter included ore and waste mined of 700 000 t, with ore processed totalling 700 000 t.

Financial highlights for the second quarter revealed operating margins of 67%, compared with 59% in the second quarter of 2023. This strong operating margin is attributed to robust pricing for the company’s larger stones and cost reduction initiatives, supported by a strong dollar.

The operating cost was $26.32/t processed, a 6% decrease from $27.97/t in the second quarter of 2023 and consistent with the $26/t in the first quarter of this year.

Lucara believes the impact of inflationary pressures, particularly in labour, was well-managed by the operation, with a strong dollar offsetting a slight increase in costs compared with the previous period.

Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) were $18.8-million, up from $16.5-million in the second quarter of 2023, driven by increased revenue and lower operating expenses.

During the second quarter, the company invested $11.2-million into the Karowe Underground Project (KUP), excluding capitalised cash borrowing costs. The ventilation shaft sank 128 m, and development of the 470-level station, located at about 550 m below collar, began.

Production shaft activities included the sinking of 104 m and the completion of three probe hole covers, with no water being intersected. A total of 26 m of lateral development on the 470-level, along with the 470-level station development, was completed.

As of June 30, Lucara reported cash and cash equivalents of $21.9-million and working capital of $21.7-million. The company had drawn $165-million on the $190-million project facility for the KUP, with an additional $25-million drawn on the $30-million working capital facility and a cost overrun reserve account balance of $37.5-million.

The Karowe mine registered no lost-time injuries during the second quarter, taking the mine to more than three years without a lost-time injury.

“Lucara’s performance this quarter reaffirms our position as a leader in the diamond industry. Our . . . safety and operational excellence [record] continues to drive our success, with both our openpit operations and underground construction progressing admirably. The Underground Expansion Project, in particular, is advancing well, with shaft sinking progress surpassing our expectations,” Lucara president and CEO William Lamb said on August 12.

Lucara noted that, in the diamond market, the long-term outlook for natural diamond prices remains positive owing to improving supply and demand dynamics, largely driven by long-term reductions from major producing mines.

However, the market for smaller-sized diamonds remains soft, impacted by a weak Asian market and the rise of laboratory-grown diamonds.

Lucara said demand for larger diamonds over 10.8 ct remained robust, as reflected in the company’s sales.

However, the G7 sanctions on Russian diamonds over 1 ct, effective March this year, have caused some trade delays owing to new regulations requiring these diamonds to be processed through the Antwerp World Diamond Centre for origin verification.

Lucara, with its established operations producing Botswana diamonds, stands to benefit from this heightened focus on origin verification.

Sales of laboratory-grown diamonds increased steadily through 2023 and into this year, with many smaller retail outlets increasingly adopting these diamonds as a product.

In the second quarter, diamond producer De Beers announced that it would cease creating synthetic diamonds and focus on selling natural diamonds. This decision aligns with several major brands confirming they would not market laboratory-grown diamonds.

Lucara said the long-term impact was expected to support the natural diamond market, with a bifurcation between the natural and laboratory-grown diamond markets expected in the medium term.

The company believes that the longer-term market fundamentals for natural diamonds remain positive, as demand is expected to outstrip future supply, which has been declining globally over the past few years.

Source: DCLA

Falling prices, low consumer trust, imports issues for lab-grown diamond: GTRI

New Delhi: India’s lab-grown diamond industry is facing challenges such as significant fall in prices, eroding consumer interest and competition from imports, think tank Global Trade Research Initiative (GTRI) said Sunday, adding said that though India faces the issue of production overcapacity, it continues to import in large amounts and this issue needs deeper investigation.

To address these challenges, the government needs to take certain steps such as setting clear and consistent rules to standardize quality, certification, and market practices; issuing a Quality Control Order to check quality of imports; and investment in research and development to improve production processes, reduce costs, and enhance the quality of lab-grown diamonds.

As per the report, India’s lab-grown diamond industry is facing a major challenge, with prices falling by 65% in the past year to Rs 20,000 per carat from Rs 60,000 due to local overproduction and oversupply from abroad, which points to problems like overproduction, high imports, and lack of regulation. The number of units producing lab-grown diamonds in India has increased to 10,000 units, leading to over supply and tougher competition.

The industry lacks clear regulations checking such practices, making it hard to ensure quality. Lack of proper certification, and low trust market operations could slow down the industry’s growth, according to GTRI founder Ajay Srivastava.

He added that 98% of India’s imports of rough lab-grown diamonds come from Hong Kong (63.7% or $728.2 million) and the UAE (28.5% or $326 million).

In FY24, India imported rough lab-grown diamonds worth $1.14 billion and exported cut and polished ones worth $1.3 billion.

Natural diamonds cost around Rs 3.5 lakh per carat and this price drop is making it difficult for manufacturers to repay loans taken for purchasing lab-grown diamond making machines, putting them under financial strain, GTRI said.

Source: DCLA

One of the Last Argyle Pinks Leads Online Auction

A loose 0.94 carat Argyle Pink – one of the last recovered from the iconic mine in Western Australia – is being sold at auction.

It is the highlight of a 416-lot online event (ending 11 August), featuring many items that belonged to Graham Jackson, former owner of Loloma Jewellers, located in Townsville, Australia, who died aged 92 in May.

The cushion cut fancy intense VS1 gem is designated as 6P – 6/10 for intensity of hue and P for pink as the dominant hue.

It was sold at the 2021 Argyle Pink Tender-Rio Tinto’s Final Collection, the last tender from the mine, which closed in November 2020 after 37 years, during which it produced 90 per cent of the world’s pink diamonds.

The stone is being sold by Sydney-based First State Auctions, with an estimate of AUD$700,000 to AUD$800,000 (US$455,000 to U$520,000).

Last January Tiffany & Co. has bought a parcel of 35 Argyle pinks – from 0.35 carats to 1.52 carats – for “select clients”.

Source: DCLA

Gem Diamonds digs up 145 carat diamond in Lesotho

Africa-focused miner Gem Diamonds has unearthed a 145.55 carat, Type II white diamond at its prolific Letsěng mine in Lesotho.

The diamond, recovered on August 3rd, is the ninth greater than 100-carat precious stone recovered this year at the operation, the company said.

Type IIa diamonds are the most valued and collectable precious gemstones, as they contain either very little or no nitrogen atoms in their crystal structure. Boart diamonds are stones of low quality that are used in powder form as an abrasive.

The Type II, white diamond is the ninth greater than 100-carat precious stone recovered this year at the Letsěng mine.

The Letšeng mine is one of the world’s ten largest diamond operations by revenue. At 3,100 metres (10,000 feet) above sea level, it is also one of the world’s most elevated diamond mines.

Diamond miners are going through a rough patch as US and Chinese demand for diamond jewellery continues to be weak and the popularity of cheaper laboratory grown diamonds continues to rise.

In 2015, man-made diamonds had barely made an appearance as a competitor to natural diamonds. By last year, these stones accounted for more than 10% of the global diamond jewelry market, according to industry specialist Paul Zimnisky.

The market values of small to medium diamond mining companies, including Canada’s Lucara, South Africa’s Petra, and Gem Diamonds itself, are around $100 million or less. This is only about a third or a fourth of the price the large stones they aim to find may be worth.

The news comes as competitor Petra Diamonds postponed the sale of rough stones mined at its South African operations that would have been offered during the August/September event of the year, amid low demand.

Source: DCLA

Petra defers another diamond tender amid weak demand

Petra Diamonds has once again postponed the sale of roughs, holding on to the diamonds from its South African operations that would have been offered during the August/September event of the year, amid low demand.

The tender of diamonds from Petra’s Williamson mine in Tanzania will proceed as planned, the company said. It noted that this decision aimed to “support steps taken by major producers to restrict supply during this period of weaker demand.”

Rough diamond parcels from the miner’s South African operations, originally earmarked for sale as part of the first tender of fiscal year 2025, are now planned to be offered in the second tender, expected to close mid-October 2024.

Petra will sell diamonds from its Williamson mine in Tanzania during August/September as planned.

Petra’s South African producing operations include the Cullinan and Finsch mines.

“Our expectation is that supply discipline, together with the expected seasonally stronger demand as we head towards the festive season, will provide some pricing support later in the calendar year,” chief executive Richard Duffy said in the statement.

Petra had differed in June the majority of what would have been its sixth sale for its 2024 fiscal year to the August/September offering, or tender one of fiscal 2025.

The company said recent steps taken to improve its financial position have provided it with the ability to adjust the timing of its tenders based on market conditions.

Source: DCLA