Rio Tinto asks court to OK sale of partner’s diamonds in Canada mine

diavik canada

Global miner Rio Tinto is seeking court approval to sell its partner’s share of diamonds from a mine in Canada’s Northwest Territories, a filing showed, hoping to recover around C$120-million plus legal fees and other costs.

Rio owns 60% of Diavik Diamond Mines Inc (DDMI) and says it is owed C$119.5-million plus about C$2.4-million in fees by junior partner Dominion Diamond.

Dominion holds a 40% stake in the northern mine, located about 300 km north of the territorial capital of Yellowknife.

Closely held Dominion sought creditor protection in April, saying it could not afford Rio’s cash calls amid coronavirus-related disruptions in the global diamond industry.

Dominion said October 9 a proposed deal to sell its nearby Ekati mine to an affiliate of its parent company The Washington Companies for $126-million fell apart. That deal did not include its minority Diavik stake.

DDMI said in court filings that Dominion has not repaid cover payments and “has no intention of doing so” and that it would be “unjust and inequitable” to not permit DDMI to recover the amounts owing to it in accordance with its joint venture agreement.

“We remain focused on ensuring Diavik diamond mine continues to operate safely, maintaining the mine’s significant contribution to the Northwest Territories and local communities through payments to government, employees and suppliers,” a spokesman for Diavik said on Friday.

A court hearing on the application is set for October 30 in Calgary, Alberta.

Diavik produced 6.7-million carats in 2019 but is scheduled to close in 2025, with cleanup costs estimated at $365.3-million, according to court documents.

Dominion declined comment on the fate of its Diavik stake. Rio has said it will not bid on the minority interest.

Source: miningweekly

Sotheby’s Nets $18M at Live New York Jewellery Sale

12.38-carat, fancy-pink diamond ring

Sotheby’s garnered $17.9 million from its Important Jewels sale in New York, with a pink-diamond ring taking the top spot.

The pear-shaped, 12.38-carat, fancy-pink, VVS2-clarity diamond ring fetched $4.6 million, or $373,337 per carat, falling within the price range the auctioneer had estimated. It led the auction house’s first live jewelry sale in the state since the coronavirus pandemic began in March.

“This auction was presented in a new and innovative format, a hybrid of online advance bidding, culminating in the drama of a live auction,” Kendall Reed, head of fine and online jewels at Sotheby’s New York, said last week.

A necklace, set with a pear-shaped, 51.92-carat, D-color, internally flawless diamond pendant, surmounted by a separate pear-shaped, 3.65-carat, fancy-brownish-orangey-pink diamond, went for $3.2 million, just above the low end of its presale valuation. Meanwhile, a diamond ring containing a cushion-cut, 19.24-carat Kashmir sapphire achieved $1.5 million, matching its low estimate.

Some 60% of items on offer sold over their high estimates, including a pink-tourmaline and diamond clip brooch by Schlumberger for Tiffany & Co., which brought in $37,800, more than double its high estimate. A ring featuring a 14.06-carat Burmese ruby went for $302,400 against a high estimate of $140,000, while a star sapphire and diamond ring sold for $52,920, more than four times its $12,000 high presale valuation.

In total, Sotheby’s sold 83% of items on offer, with participants hailing from 30 countries. Three-quarters of buyers placed their bids online.

“Our results are a clear indication that the appetite for top-quality diamonds, rare gemstones and stylish signed jewels remains strong,” Reed added. 

Source: Diamonds.net

Petra to sell blue diamonds recovered at Cullinan

A 20.08-carat Type IIb blue diamond recovered at Cullinan.

Petra Diamonds (LON: PDL) announced the launching of a special tender process for the Letlapa Tala Collection, which comprises five blue diamonds sourced from the Cullinan mine in South Africa. 

Cullinan is known as the world’s most important source of blue diamonds, as well as being the place of birth of the 3,106-carat Cullinan diamond, which was cut to form the 530-carat Great Star of Africa and the 317-carat Second Star of Africa, being the two largest diamonds in the British Crown Jewels.

In a press release, Petra said that the name of the new collection actually means ‘blue rock’ in Northern Sotho (commonly known as Pedi), the predominant language spoken in the Cullinan area.

CULLINAN IS KNOWN AS THE WORLD’S MOST IMPORTANT SOURCE OF BLUE DIAMONDS

The collection consists of five Type IIb blue diamonds of 25.75, 21.25, 17.57, 11.42 and 9.61 carats, respectively. Type II diamonds contain no detectable nitrogen in their chemical structure and tend to display exceptional transparency. Type IIb stones contain a small amount of boron, which is what determines their blue colour.

“Blue diamonds are so rare that most people working in the diamond industry have never even seen one,” the media release states. “There are no official statistics on their recovery, so it is therefore even more unusual that these five spectacular stones were all recovered within the space of one week’s production in September 2020.”

According to Petra, this is likely to be the first time that five blue rough diamonds have ever been offered for sale at one time, with buyers being offered the chance to bid either on individual stones, more than one, or for the entire collection.

The Letlapa Tala gems will be available for viewings in Antwerp from October 25 to November 1; Hong Kong from November 5  to November 10; and New York from November 16 to November 20, 2020.

Source: Mining.com

Rio Tinto to Sell Final Argyle Specials

Rio Tinto Diavik Helios a 74.48 carat Fancy yellow diamond

Rio Tinto will launch a tender of large rough diamonds, including the last of its special stones from the Argyle deposit in Australia.

The miner will feature 28,399 carats of special-sized rough — weighing more than 10.8 carats — from Argyle at the sale, which will take place in October and November, Rio Tinto said Tuesday. Colored diamonds from the site, which is due to close at the end of the year, as well as a 26-carat, gem-quality rough, will also be available.

“The Argyle rough diamonds presented at this tender are a final rare and collectible offering from one of the world’s greatest diamond mines,” noted Andrew Wilson, general manager of Argyle.

Rio Tinto will also offer large diamonds from its Diavik mine in Canada, including the Diavik Helios, which will headline the sale. The 74.48-carat, fancy-yellow diamond was named for the pure yellow sunlight emitted by the mythical Greek sun god.

“The Diavik Helios is an exceptional diamond in terms of its color saturation and clarity, and will be in strong demand from colored-diamond specialists around the world,” said Patrick Coppens, general manager of sales and marketing for Rio Tinto’s diamond business.

The company will showcase the diamonds physically in Antwerp and Tel Aviv, Israel, prior to the sale. It will also hold virtual and online viewings due to Covid-19 travel restrictions, it said. 

Source: Diamonds.net

Petra Diamonds shares fall on debt for equity deal

Petra Diamonds Cullinan Diamond Mine

Petra Diamonds has abandoned plans to sell the business in favour of a debt-for-equity restructuring, it said on Tuesday, sending its shares lower because of the deal’s dilutive effect on existing stakeholders.

The London-listed company, which mines diamonds in South Africa and Tanzania, had put itself up for sale in June as part of the restructuring process but has received no viable offers, it said.

Its shares have slumped by more than 80% this year as the COVID-19 pandemic has battered the global diamond sector, with mines forced to shut down while consumer demand collapsed. The shares opened with an 18% drop and by 0952 GMT were down 3.6%.

Petra said its existing $650 million of bond debt will be partly replaced by up to $337 million of new notes, including $30 million of new money contributed by debtholders.

The remaining note debt will be converted into equity, leaving debtholders with a combined 91% of the company while diluting existing shareholders to a combined stake of only 9%.

“For existing equity holders it is very dilutive, as expected,” wrote Liberum analyst Ben Davis.

Existing shareholders will be diluted to “next to nothing”, Shore Capital analysts wrote.

Peel Hunt analysts took a more optimistic view, saying the restructuring would give Petra a more sustainable balance sheet and help it to benefit from a recovery in markets for rough diamonds. They calculated that Petra would be left with $444 million of gross debt.

Petra said it expects to seal a “lock-up agreement” cementing the terms with the noteholder group and South African lenders in early November. It expects the restructuring to become effective in the first quarter of 2021.

The agreement also includes new governance arrangements and cashflow controls.

Petra Chief Executive Richard Duffy expressed the company’s gratitude to the noteholder group and South African lenders for their agreement in principle to provide “meaningful additional liquidity” in what has been a difficult period.

Source: reuters

India Says Slump in Diamond Exports Is Much Worse Than 2008

India diamond

Diamond exports from India, which polishes about 90% of the world’s rough diamonds, will collapse by as much as a quarter this year as the pandemic crushes demand and breaks supply chains.

Overseas sales of cut and polished diamonds may slump 20% to 25% in the year ending March from $18.66 billion last year, according to Colin Shah, chairman of the Gem & Jewellery Export Promotion Council. That will push exports to the lowest in data going back to the 2009 fiscal year on the association’s website.

“In 2008, things were bad for a quarter and business recovered after that,” Shah said in an interview. “This is now two quarters gone.” While festivals such as Diwali, Christmas and Valentine’s Day will prop up demand in the next six months, that won’t be enough to lift full-year exports, he said.

Losing Luster

India imposed one of the world’s strictest lockdowns in March to contain the coronavirus outbreak. That brought activity to a halt and put the economy on course for its first annual contraction in more than four decades. With more than 7 million infections, the country is one of the world’s virus hot spots.

The measures to control the pandemic meant production centers were closed or operating at very low levels, and rough-diamond imports fell in line with poor end-product demand. The country’s diamond exports sank 37% to $5.5 billion in the six months through September from the year-earlier period.

Workers have now started returning to the diamond-polishing hubs of Surat, Mumbai and Kolkata, and factories are operating at 70% to 80% of capacity with social-distancing norms in place, Shah said. Still, it’s difficult to predict global supply chains as rules to control the virus change frequently, he said.

Uneven Recovery

The International Monetary Fund warned this week the world economy faces an uneven recovery until the virus is tamed. Chinese consumers are starting to spend again, while in Europe, the luxury sector is back near pre-pandemic levels despite a surge in Covid-19 cases that’s hurting normal tourism.

De Beers sold about $467 million of rough diamonds in its eighth sales cycle of 2020, Anglo American Plc said Wednesday. Sales improved compared with $334 million in the previous cycle, and $297 million during the same cycle in 2019.

“We continue to see a steady improvement in demand for rough diamonds in the eighth sales cycle of the year, with cutters and polishers increasing their purchases,” said Bruce Cleaver, chief executive officer of De Beers. “But these are still early days and there is a long way to go before we can be sure of a sustained recovery in trading conditions.”

Source: bloomberg

GIA Unveils New Lab-Grown Reports

The new GIA lab-grown diamond reports. (GIA)

The Gemological Institute of America (GIA) has launched its new grading reports for lab-grown diamonds, offering an updated look and format.

The new documents, branded “LGDR by GIA,” come in digital-only form and use specific color and clarity scores rather than the descriptive terms and ranges that appeared in its previous reports, the organization said Tuesday.

“The evolution of GIA’s reports for laboratory-grown diamonds is fully aligned with our mission to protect all consumers,” said Susan Jacques, GIA president and CEO. “Everyone who purchases gemstone jewelry — whether natural or laboratory-grown — expects and deserves the information, confidence and protection that come with a GIA report.”

The offering includes two different Laboratory-Grown Diamond Reports for colorless synthetic diamonds — a standard report and a dossier — and two for colored diamonds: one with plot diagrams and one without.

Notably, the GIA avoids calling the documents “grading reports” — a term it reserves for natural diamonds. Earlier this week, the World Jewellery Confederation (CIBJO) recommended that laboratories use that term only for natural stones and instead call synthetics reports “Laboratory-Grown Diamond Product Specifications,” arguing that the concept of grading implies rarity.

“The color and clarity specifications for laboratory-grown diamonds are described on the same scale as GIA grading reports for natural diamonds, but that does not correlate to nature’s continuum of rarity,” the GIA noted.

The reports state that a stone was created by chemical vapor deposition (CVD) or High Pressure-High Temperature (HPHT) and that it may include post-growth treatments to change the color. Each report also comes with a QR code linking to a custom page on GIA’s website with information about lab-grown diamonds.

Each stone will also receive a laser inscription with the report number and the words “laboratory-grown,” unless another acceptable term already appears on the girdle.

Source: Diamonds.net

De Beers sales show steady recovery in diamond market

debeers-rough-diamond

De Beers, the world’s largest diamond producer by value, said on Wednesday that its latest sale of roughs yielded 40% more revenue than the seventh cycle, which already was more successful than the previous event.

The Anglo American unit, which sells diamonds to a handpicked group of about 80 buyers 10 times a year at events called “sights”, sold $467 million worth of rough diamonds in the eighth cycle, compared to $320 in the previous one.

The results bring De Beers’ total revenue from rough diamonds in the second half of 2020 to more than $900 million.

De Beers’ chief executive Bruce Cleaver said that while the demand increase was encouraging, it was too early to be sure of a sustained recovery in trading conditions.

“We continue to see a steady improvement in demand for rough diamonds in the eighth sales cycle of the year, with cutters and polishers increasing their purchases as retail orders come through ahead of the key holiday season,” Cleaver said in the statement.

The strong figures are further evidence of improving demand for rough diamonds, according to said BMO analyst Edward Sterck. He warned, however, that there is a significant accumulation of upstream diamond inventories, which could suppress the recovery if liquidated too soon and too quickly.

“Maintaining good diamond prices through the recovery will depend upon the pace at which the inventory is unwound, with De Beers and Alrosa holding the keys to the bulk of this inventory,” Sterck wrote in a note to investors.

The analyst also said the fact De Beers only provided a revenue figure meant it was unable to gauge how prices were trending.

Lower prices, more flexibility
De Beers has continued to implement a more flexible approach to sales during the sixth and seventh sales cycles of the year, as a result of restrictions triggered by the pandemic.

The usual week-long sight holder events have been extended towards near-continuous sales.

It has also cut prices of its stones, sometimes by almost 10% for larger diamonds, in an effort to spark sales.

Before the price reduction, De Beers had made major concessions to their normal sales rules — allowing customers to renege on contracts and view diamonds in alternative locations.

Along with Russia’s Alrosa, the world’s top diamond producer by output, it has also axed supply of roughs to the market, but built up their own stockpiles.

The diamond giant noted that despite ongoing efforts, it expected it would take “some time” to get back to pre-pandemic levels of demand.

De Beers and Alrosa’s view is shared by many in the industry. India, which polishes about 90% of the world’s rough diamonds, expect the slump in exports to be worse this year than in 2008.

Colin Shah, chairman of the Gem & Jewellery Export Promotion Council, told Bloomberg News on Wednesday that overseas sales of cut and polished diamonds may slump 20% to 25% in the year ending March from $18.66 billion last year.

Source: mining.com

‘Grading’ Is Just for Natural Diamonds, Says CIBJO

Polished diamonds

Laboratories should reserve the term “grading report” for natural diamonds rather than lab-grown stones, the World Jewellery Confederation (CIBJO) has urged.

Lab-grown diamonds lack the rarity that underpins the concept of grading, CIBJO argued Tuesday. Instead, documents providing details of synthetics should be called “Laboratory-Grown Diamond Product Specifications,” the organization says in a new set of guidelines it released to the trade this week.

The standard grading report implies “a degree of rarity of the product,” a CIBJO spokesperson told Rapaport News. “But on the other hand, the consumer has a right to know what the components of the product are. The important element is that the term ‘grading’ is taken out.”

CIBJO’s board has made its new Laboratory-Grown Diamond Guidance available for review by affiliated companies and national associations, the organization said. The consultation phase is the final stage in a two-year process to create harmonized standards for man-made stones.

The rule book, which is not binding, also calls for laboratories to include extra information such as the name of the manufacturer, the country and method of manufacture (chemical vapor deposition or High Pressure-High Temperature), and information about post-growth treatments. It also recommends that the letters “LG” precede the color and clarity grades on the report to indicate the stones are lab-grown.

The guidelines deal with how to describe lab-grown diamonds and display them at events such as trade shows. They also provide recommendations on how companies should disclose the origin of the stones on invoices and consignment documents, and discuss synthetics detection technology.

“A key principle of the Laboratory-Grown Diamond Guidance is that, to ensure confidence, consumers must receive complete and unambiguous information about what they are buying, so that they can make consciously informed purchasing decisions,” CIBJO explained.

CIBJO’s Blue Book, a separate document on grading standards and terminology, notably kept “natural” in its definition of diamonds even after the US Federal Trade Commission dropped the word in 2018.

Source: diamonds.net

Dominion Diamond Mines sale of Ekati falls through

Ekati and Diavik diamond mines

The future of the Ekati diamond mine in Canada’s Northwest Territories remains uncertain after Dominion Diamond Mines announced that a deal to sell it to a subsidiary owned by its parent company, The Washington Companies, has fallen apart.

Dominion Diamond reported on Oct. 9 that three insurance companies – Aviva Insurance Company of Canada, Argonaut Insurance and Zurich Insurance – had reached “an impasse” in negotiation with the purchaser, and stated “there is no reasonable prospect of reaching a satisfactory agreement among them.”

Dominion Diamond, which was purchased by The Washington Companies in November 2017 for $1.2 billion, was granted creditor protection in April. Mining was suspended and the Ekati mine placed on care and maintenance in March due to the coronavirus.

Altogether, the three insurance companies have issued about C$280 million in surety bonds to the government of the Northwest Territories that were intended to guarantee that the diamond mine could be closed safely and reclaimed once the mine closes permanently.

The sale was subject to a condition that the insurance companies and the purchaser reached an agreement on the treatment of the existing surety bonds.

Dominion remains in creditor protection until November 7, 2020, unless extended, it said, and is working with its advisors on next steps.

“The company will be assessing all strategic alternatives to return the Ekati diamond mine to full operations for the benefit of its employees, the Northwest Territories and other stakeholders,” Dominion Diamond stated in its news release.

The company has also confirmed that Pat Merrin, the company’s interim CEO since February, has relinquished that role. “In light of this development, Pat has advised that it would be appropriate that he step down as Interim CEO,” a company spokesman wrote in an email to The Northern Miner.

“Kristal Kaye, CFO and Mike Welch, COO will lead Dominion through this challenging period with strong support from the rest of the management team and our independent Chairman Brendan Bell.”

Dominion Diamond Mines is one of the world’s largest producers and suppliers of premium rough diamonds. The company owns a controlling interest in the Ekati diamond mine, which it operates, and 40% of the Diavik diamond mine. It also holds a controlling interest in the Lac de Gras diamond project. All of its assets are in the Northwest Territories.

Source: Northern Miner