Petra Diamonds sold fewer carats but achieved higher prices earlier this month at its fifth tender of FY 2024, boosted by the sale of an $8.2m blue diamond.
The UK-based miner achieved an average $136 per carat on sales of 362,000 carats for $49m.
Like-for-like figures for its fourth tender, in February, were $112 per carat on sales of 429,000 carats for $48m.
Sales for the year to date are, however, lagging behind FY 2023, at $285m, down 10 per cent down on $316m.
The 14.76ct exceptional color and clarity blue diamond recovered from Cullinan, South Africa, sold for $8.2m, although it was not classified as an “exceptional stone” (over $15m).
Total revenue for Q3 FY 2024 was $66m, down 27 per cent on the previous quarter, due to the lower production and the timing of receipts from the fifth tender.
“Production for the quarter is consistent with the preceding quarter and in-line with expectations.,” said CEO Richard Duffy.
Production guidance for FY 2024 is 2.75m to 2.85m carats.
Earlier this month Petra announced the sale of its loss-making Koffiefontein mine, in South Africa, to Dubai-based Stargems for a nominal sum.
Antwerp World Diamond Centre (AWDC) chief executive Ari Epstein resigned unexpectedly on Thursday, the AWDC’s board of directors said in a statement.
A spokesperson for AWDC, Belgium’s main diamond industry group, said on Friday that Epstein, who had been CEO for 13 years, did not wish to communicate about the reason for his sudden departure, but Belgian financial newspaper De Tijd reported that Russian diamond sanctions had been the cause of conflict between the diamond sector and the Belgian government.
AWDC did not say who would replace Epstein as CEO. Epstein did not immediately respond to a request for comment sent via LinkedIn.
Following an EU ban on Russian-origin diamonds that took effect on March 1, rough and polished diamonds have to enter the EU and G7 countries with documentary proof and declarations that the stones are not of Russian origin.
Antwerp’s diamond dealers have said they are facing long and costly delays as a consequence.
Industry veteran Stuart Brown, who has led multiple diamond-mining companies, will become chairman of the board at Lucapa Diamond Company.
Brown spent 20 years at De Beers, with stints as both interim CEO and chief financial officer. He was also the head of Firestone Diamonds from 2013 to 2018, and CEO of Mountain Province for three years, Lucapa said Monday.
During his time at Firestone, he raised $225 million to develop the Liqhobong mine in Lesotho, Lucapa noted. He is currently a director of Ukrainian iron-ore miner Ferrexpo and of Digby Wells Environmental Holdings, a provider of environmental, social and governance (ESG) consulting services to the mining industry.
In addition, Ronnie Beevor will take a seat on the board. He has experience in investment banking and mining, having been the head of Rothschild Australia. He is currently a director of Canadian iron-ore miner Champion Iron and Canadian explorer Mount Royal Resources. He serves as chairman of gold explorer Felix Gold and has recently retired as chairman of Bannerman Energy.
Meanwhile, Ross Stanley has resigned from Lucapa’s board, the company added.
Blackstone Inc. (BX), the investment firm headquartered in New York, is reportedly looking to raise $300m through the IPO of India’s International Gemological Institute (IGI).
Examining a diamond Based on a Reuters report, this gemstone certification company aims for a valuation of about $1.5bn.
In May 2023, Blackstone bought IGI for $570m from Fosun International Limited (0656.HK) and the Lorie family, who founded the company. Describing itself as the world leader in the grading and accreditation of gems, IGI operates mainly in India.
According to Reuters, the organisation appointed Morgan Stanley (MS) and Kotak to captain its market debut. As of April 2024, IGI has 29 laboratory facilities worldwide that grade and appraise jewellery, natural and lab-grown diamonds, and other gemstones. Although founded in Belgium, this company’s main financial arteries are in India.
A Reuters source indicated that IGI aspires to boost interest in lab-grown diamonds in India. Although these resemble diamonds, they are less expensive. This country cut the taxes on the production of lab diamonds to promote the practice and product.
In 2021, India’s jewellery sector carried a value of $78bn. Most of its products are exported, but there seems to be a local shift from gold to diamonds. Blackstone is reportedly keen to push on with the IGI IPO as India’s debut scene is the most vibrant in the Asian market sphere.
LSEG data shows that during the first quarter of this year, Indian firms amassed approximately $2.3bn in IPOs. That is a big jump from the estimated $166.5m raised during the same period last year.
A yellow diamond ring was the star of the most recent jewelry sale at Phillips in Hong Kong, fetching HKD 8.9 million ($1.1 million).
The round brilliant-cut, 15.51-carat, fancy-vivid-yellow, VS2-clarity diamond ring fell within its estimated range at the March 28 Hong Kong Jewels auction, Phillips said last week. In total, the sale achieved HKD 32.3 million ($4.1 million), with 73% of items finding buyers.
“The sale total for our spring auction in Hong Kong increased by 20% over the previous season, demonstrating the resilience of the global demand for rare and important jewels across the board,” said Benoît Repellin, worldwide head of jewelry for Phillips. “Fancy colored diamonds commanded the sale…. Vintage signed pieces also performed well. We also saw notable demand for [the] finest Burmese rubies, emeralds and sapphires.”
Here are the rest of the top five jewels at the sale:
This Van Cleef & Arpels necklace, created in 1985, is set with alternating brilliant-cut diamonds and round cabochon turquoises, supporting a fringe of pear-shaped cabochon turquoises. It realized HKD 4.6 million ($584,302), nearly four times its HKD 1.2 million ($150,000) high estimate.
A ring bearing a pear-shaped, 2.65-carat, fancy-intense-orangey-pink, VS1-clarity diamond brought in HKD 2.9 million ($373,304), within estimates.
Phillips sold this brilliant-cut, 5.53-carat, D-color, VVS1-clarity diamond ring for HKD 1.9 million ($243,459), at the upper end of its price range.
A bracelet with 12 cushion-shaped, oval and circular-cut Burmese rubies weighing approximately 24.59 carats in total, as well as kite-shaped diamonds, went for HKD 1.5 million ($194,767), missing its HKD 1.8 million ($230,000) lower presale price.
An unusually warm winter in Canada this year has delayed the opening of a 400-kilometer (250-mile) ice road that is rebuilt every year as the main conduit for Rio Tinto, Burgundy Mines and De Beers to access their diamond mines in the remote Arctic region.
The Winter Road, which serves the region accessible only by air for 10 months of the year, opened with a two-week delay in the middle of February, disrupting movement of goods along the ice road built over 64 frozen lakes.
Earlier this week, the Tlicho government in Northwest Territories (NWT) restricted movement of commercial trucks for few days in one of the winter roads due to anticipated warmer weather across the North Slave Region.
While diamond production remains unaffected, the delay underscores the challenges that companies face as the mines that make Canada the world’s third largest diamond producer come to the end of their productive life.
It also highlights the infrastructure hurdle for the NWT and Nunavut that are positioning themselves as the next frontiers in the exploration of critical metals, such as rare earth, cobalt and lithium, in the transition to a greener future.
The delays in building the Winter Road, which first became operational in 1982, have happened in the past, but this year’s is the longest delay in recent years, according to Tom Hoefer, senior advisor to the NWT and Nunavut Chamber of Mines.
“We did start the road a bit later as a result,” he said.
Climate change, driven by the burning of fossil fuels, coupled with the emergence of the natural El Nino climate pattern, pushed the world into record heat territory in 2023.
The impact of El Nino this year resulted in Yellowknife, the capital of the NWT, recording a maximum temperature of zero degrees Celsius (32 degrees Fahrenheit) in December and minus 8.7 degrees Celsius (17.6 F) in February, making it the warmest winter days in a decade, according to data from Environment Canada.
The Winter Road opens between late January and early April and requires minimum of 29 inches (74 cm) of ice for vehicles that can carry 26,000 kilograms (57,320 lbs) of gross vehicle weight, to transport diesel and dynamite required to operate the mines.
On warmer days, the engineers have found ways to trick nature by creating artificial ice using giant sprinklers to spray water high up in the air so that they cool and form thick layer of ice when they fall.
Paul Gruner, CEO of the Indigenous corporation Tlicho Investment Corp & Group of Companies said this year the warm winter at the start and if there is a warmer end of the season or an early spring, it could risk an early closure.
“So when you’re nibbling away on both sides of that, you start to create a very short season,” Gruner said.
The Winter Road is jointly operated by Burgundy Diamond Mines, Rio Tinto and De Beers of Anglo American group, which run the Ekati, Diavik and Gahcho Kue diamond mines respectively.
De Beers and Burgundy Diamonds said operations at their mines have not been affected by the mild winter. Rio Tinto declined comment.
The Winter Road costs C$25 million ($18.54 million) to operate for two months, which is shared by the three companies based on goods transported on the road and distance traveled.
However, the mines have a operational life of around 20 years and as they reach the end of life, they need to be shut down.
Rio Tinto has said it will close the Diavik mine in 2026 and De Beers plans to shut Snap Lake end of this year, while seeking to extend the life of Gahcho Kue.
Chicken and egg Canada’s remote Arctic region, home to around 86,000 people, is facing the complete closure of all the diamond mines by 2030 and is looking for ways to keep mining alive.
The lack of infrastructure is a challenge and the shortened seasonal use of the ice road could hurt investments needed to mine critical minerals.
“If you’re in the exploration phase … and looking at using the winter road as part of your core business model, the risks start to come into … your decision making whether or not to advance a project,” Tlicho Investment’s Gruner said.
Hoefer of NWT and Nunavut Chamber of Mines said the two Northern territories, which are as big as Europe, have the highest infrastructure deficits in Canada – one of the reasons for the very high costs of living and doing business in the North.
“It is a chicken-and-egg situation, the mining companies probably won’t come unless there is some infrastructure, it’s just too expensive,” said Heather Exner-Pirot, director of Energy, Natural Resources and Environment program at Macdonald-Laurier Institute.
It costs C$3 million a kilometer to build gravel roads, Pirot said.
Mining groups are pushing for a mega infrastructure project that connects NWT to Nunavut that runs through the diamond mines could help unlock the mineral riches in the region. At least 23 of the 31 critical minerals listed by the Canadian government is found in the NWT.
“When the project comes up, it would replace the roads that have served mining for 40 years, but until that happens, the ice roads are required,” Hoefer said.
A ring with a rare fancy-vivid-yellowish-orange diamond is set to lead the upcoming Sotheby’s jewelry sale in Hong Kong, which will take place during its luxury week.
The auction house has not disclosed the estimate for the cushion-shaped, 7.01-carat, VS2-clarity diamond it will offer at the April 6 Magnificent Jewels event.
Along with that stone, Sotheby’s will feature several other colored diamonds in its top 10, as well as jadeite pieces. Jewels from well-known design houses, including Harry Winston, Graff, Chopard, Tiffany & Co., Bulgari, and Boucheron, will also take center stage.
Here are the rest of the top 10 jewels Sotheby’s will offer at the auction:
This unmounted oval brilliant-cut, 55.55-carat, D-flawless, type IIa diamond has a presale estimate of HKD 38 million to HKD 50 million ($4.9 million to $6.4 million).A ring with a heart-shaped, 10.33-carat, fancy-intense-orangey-pink, VVS1-clarity diamond is estimated to fetch HKD 25.3 million to HKD 40 million ($3.2 million to $5.1 million).Sotheby’s will sell this ring bearing a round-cornered rectangular modified brilliant-cut, 4.01-carat, fancy-intense-purplish-pink, internally flawless diamond for up to HKD 30 million ($3.8 million).This necklace, containing 18 oval jadeite cabochons with brilliant-cut diamonds, is estimated to bring in up to HKD 28 million ($3.6 million).A collection featuring a detachable pendant necklace, composed of seven oval jadeite cabochons as well as diamonds, in addition to a pair of earrings and a ring will be offered for HKD 18 million ($2.3 million) to HKD 28 million.A ring by Jacques Timey for Harry Winston contains a cushion-shaped, 16.65-carat Kashmir sapphire flanked by two triangular-shaped diamonds. It carries a presale estimate of HKD 17 million to HKD 20 million ($2.2 million to $2.6 million).This jadeite bangle is set to go under the hammer at the Hong Kong auction, where it has a price range of HKD 16.8 million to HKD 22 million ($2.1 million to $2.8 million).A ring with a cushion-shaped, 5.07-carat, pigeon’s blood Burmese ruby surrounded by epaulette- and marquise-shaped diamonds is due to bring in between HKD 12.8 million ($1.6 million) and HKD 18 million.Another jadeite collection, comprising a necklace set with 14 oval jadeite cabochons and brilliant-cut, pear- and marquise-shaped diamonds, together with a ring and a pair of earrings, has a price range of HKD 12 million ($1.5 million) to HKD 18 million.
Antwerp police conducted six raids on Wednesday and made four arrests as part of an investigation into some diamond imports suspected of being Russian-origin, Antwerp’s public prosecutor office said in a statement on Friday.
The investigation is the first related to the EU and Group of Seven (G7) import ban on diamonds from Russia that began on Jan. 1 to punish Moscow for its invasion of Ukraine. A wider ban on Russian-origin stones imported via third countries began on March 1. Russia’s state-owned company Alrosa is one of the world’s largest diamond miners.
The investigation was launched after customs officials seized diamonds in late February, the statement said. A spokesperson for the prosecutor said three shipments had been confiscated.
The Belgian city has for centuries been a global diamond hub, particularly for rough diamonds, though 90% of polishing is now done in India.
Sources familiar with the matter said the value of the three seized shipments was in the millions of euros. One source specified the overall value was around 8 million euro ($8.64 million).
A spokesperson for the prosecutor declined to comment on the combined value of the shipments. In the statement, the prosecutor’s office added that documents and digital media were seized during the raid.
Source: Reuters
Would be interesting to know how they test for origin
Australia’s Lucapa Diamond has recovered a 203 carat diamond at its prolific Lulo mine in Angola, the fifth largest ever found at the operation.
The diamond is also the third 100 carat plus stone found at Lulo this year.
Lucapa said the high quality, type IIa diamond was recovered during the processing of run of mine stockpiled ore and its recovery follows those of a 162 and a 116 carat diamonds on successive days last month.
The mine, which hosts the world’s highest dollar per carat alluvial diamonds, began commercial production in January 2015. Only a year later, it delivered the largest ever diamond recovered in Angola a 404 carat white stone later named the “4th February Stone”.
Lucapa has a 40% stake in the Lulo mine. The rest is held by Angola’s national diamond company Endiama and Rosas & Petalas, a private entity.
Angola is the world’s fifth diamond producer by value and sixth by volume. Its industry, which began a century ago under Portuguese colonial rule, is successfully being liberalized.
The Group of Seven (G7) import restrictions targeting Russian diamonds will have a detrimental impact on Botswana’s diamond trade and may reverse the gains the country has made in recent years, government officials told Rapaport News.
The proposal to create a single-node location through which all diamonds should pass to verify G7 compliance would be a logistical nightmare for producer countries, Lefoko Moagi, Botswana’s minister of mineral resources, green technology, and energy security, said in an interview.
“It creates added time in terms of processing our diamonds and it affects our beneficiation trajectory,” Moagi explained. “This may bring about added costs and unintended consequences that will affect the producer countries.”
In December, the G7 — which comprises Canada, France, Germany, Italy, Japan, the UK, and the US, as well as the European Union — announced new restrictions to prevent the flow of Russian diamonds to their markets. The measures include a ban on direct imports of diamonds from Russia, taking effect at the beginning of the year. From March 1, the sanctions were extended to Russian-origin diamonds polished in a third country, which prompted each G7 nation to issue interim guidelines requiring self-certification by members of the trade declaring their goods did not originate in Russia.
A blockchain-enabled traceability system will be implemented in the final stage on September 1, which the European Commission stipulated will require verification of the diamonds in Antwerp.
Systems in place Botswana is concerned such a system will result in delays and additional costs, and consequently slow down the development of its own trade.
The government is petitioning the G7 to allow such verification to take place in the producer countries, particularly in Botswana, since it can easily adjust its processes to meet the G7 requirements, noted Emma Peloetletse, permanent secretary to the president, in a separate interview.
“Why not build on what already exists, because we have it?” she contended.
The government hosted the G7 working committee in January to demonstrate its systems and to convince the group that a local registration point can be trusted without fear of contamination by Russian goods.
“The G7 working group was shocked to see our robust systems,” Peloetletse said. “These took years of work and investment to develop.”
She expressed frustration at the lack of engagement by the G7 following the visit and that the working group didn’t have the answers to Botswana’s questions.
Risk to the economy As a nonaligned nation, Botswana is not opposed to the sanctions, Peloetletse stressed. The country is primarily concerned about the effect their implementation will have on its diamond industry, and subsequently on the economy, she added.
Diamond mining accounts for an estimated 20% of gross domestic product (GDP), while diamond cutting, polishing, and trading makes up about 5%, according to local economist Keith Jefferis, managing director at econsult Botswana.
The domestic economy was estimated to grow 3.2% in 2023, Finance Minister Peggy Serame said in her budget speech on February 5. That represents a slowdown from 5.5% growth in 2022, reflecting “the relatively weak performance of diamond trading and mining activities throughout 2023,” she explained.
Serame projected the economy would grow 4.2% in 2024, but noted several risks that could reverse such gains. Among them are those from within the diamond industry, particularly in the beneficiation subsector, “which would be worsened by the G7 plan to verify the origin of non-Russian goods through diamond certification in Antwerp,” the minister said.
After the De Beers high The government continues to rely on diamonds to elevate the standard of living in the country and expects its new sales agreement with De Beers, announced last June, will be a catalyst for continued economic growth.
“Diamonds are something we guard with our lives, given what it has done for Botswana and what it can still do for the country,” Moagi said. “That resonated throughout our negotiations with De Beers. There was a meeting of minds with them to reach an agreement that can really boost the economy.”
The agreement will see state-owned Okavango Diamond Company (ODC) increase its share of local production from 25% to 50% over the next decade. That will enable ODC to introduce contract sales and subsequently designate rough for beneficiation — something it has been unable to do with its current auction-only sales channels.
The government wants more diamonds to be manufactured in Botswana and views that program as a path to encourage local entrepreneurship in the diamond trade, Moagi explained. ODC is planning to include an allocation for citizens to incubate local diamond manufacturers looking to develop in the beneficiation sector, he continued.
The deal also marked the establishment of the Diamonds for Development Fund (DDF) as a way to enable entrepreneurship both within and outside the diamond industry, the minister explained.
While the De Beers agreement left the government on a high, the G7 plans burst its bubble, Peloetletse added. “Now, when we are supposed to reap what we have sowed, we get this,” she said. “It has left us very anxious about our prospects.”
African lobby The concern is shared by other producer countries. Botswana President Mokgweetsi Masisi met with his counterparts in Angola and Namibia in late February and sent a joint letter to the G7 leaders outlining their concerns. Their sentiment was echoed by the African Diamond Producers Association (ADPA), which emphasized the negative economic consequences the G7 measures would have on the entire diamond supply chain.
“In the absence of proper consultation with African producers, it is concluded that the G7 restrictions on diamonds will disrupt the current supply chains and the fundamental business model of the diamond sector by introducing segregation requirements,” the ADPA said in its February 29 statement.
Minister Moagi is hoping for stronger engagement with the G7 decision-makers, rather than just the working committee. There is a sense that not all G7 members agree with the proposed approach to implementation, and that the African producers can leverage their position to negotiate a more practical approach, he said.
Brace for the worst Ultimately, the African producers, and Botswana in particular, want a stronger say in how their production is handled and leveraged.
While giving license to others to tell the Botswana story, there has been a realization that those outsiders have their own agenda, Peloetletse said. “There is nobody who can tell our story better than us,” she stressed, while referencing the country’s path toward independence as a former British protectorate.
In a similar tone, Moagi stressed that from Botswana’s perspective this is more than an economic issue: “It is an assault on our democracy and the sovereignty of countries,” he cautioned. Peloetletse added that the G7 sanctions constitute just one example in which Botswana is still trying to exert its independence.
Other battles include the reclamation of land from foreign entities, after the government in November set aside BWP 1.4 billion ($102.6 million) for the acquisition of 45,000 hectares in the country’s Northeast District from British-registered Tati Company. While Tati’s status as the largest private landowner in Botswana stems from a 1911 allocation, the recent deal sparked a debate about why the country should pay such a hefty price for its own land.
The government is also engaged in a battle over its wildlife policy as European legislators attempt to ban the import of animal-trophy hunting products from the country. With the largest herd of elephants in the world, and an oversupply of game, the country must manage its ecosystem and incentivize communities to coexist with the animal population, Peloetletse explained. The government has granted the rural communities quotas for trophy hunting, arguing that banning the practice would greatly affect the livelihoods of their residents.
The convergence of these issues, and most notably the potential impact of the G7 sanctions on its diamonds, has left the government feeling uneasy and uncertain how to move forward, said Peloetletse, whose role is to advise President Masisi.
“We have to brace for the worst-case scenario because it’s not clear the G7 is willing to listen or know what it means to our economy,” she said. “Once you close the diamond tap, and the tourism tap, then we’re done, and that’s not what Botswana wants. We aspire to be a high-income country. We want to liberate ourselves.”
