Diamond Market Report
Market sentiment remains strong although trading activity has eased due to the vacation season. Both polished and rough prices remain steady adding further stability to trading environment. Alrosa estimates one billion dollar shortage of rough in the diamond pipeline and alludes to the potential intention of the Gokhran of selling part of its stockpile in the second half of the year. This may well curb the sharp rises in rough diamond prices that was prevalent during the first half of the year. De Beers posts a seventy-four percent rise in H1 sales to $2.98 billion. Polished diamond imports into the United States rose 26 percent to $1.58 billion indicating the continued rebound in the U.S. market. The consumer price index (CPI) for jewelry in the U.S. increased 3.2 percent in June.
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Leviev: African Governments Should Subsidize Rough Diamonds
Africa's diamond-producing nations should help subsidize the sale of rough diamonds to polishers, diamantaire Lev Leviev said Thursday.
Speaking at the World Diamond Council's (WDC) 7th Annual Meeting in St. Petersburg, Leviev pointed out that is was crucial to guarantee that polishing plants had a regular supply of rough diamonds. The diamantaire compared the need to safeguard the supply of rough diamonds to the steps the Russian government took to protect mines in times of crisis.
Polishing plants in Namibia, Botswana, Angola, and South Africa were forced to deal with "unsecured quotas and lack of subsidies versus insatiable demand," Leviev said, warning that unless governments intervened, the diamond polishing industry in those countries would see plants closed.
"It is preferable to sell the rough for one dollar less, thus helping to create a healthy industry, able to support the local economy," he told the WDC audience.
Leviev called the Kimberley Process, an international monitoring scheme set up to track human rights in the diamond industry and ensure that diamonds to not subsidize armed conflicts in any of the producing nations, "extremely vital."
The Kimberley Process, he explained, promises transparency and control over the supply chain that allowed diamond dealers to sell their products, remaining confident that they were not trading in conflict diamonds.
Only through subsidizing large companies, therefore providing employment to local residents, can the diamond industry combat illegal diamond mining and trading and keep diamonds out of the hands of participants in bloody conflicts.
"Citizens of African countries must not suffer since the diamonds are shining," Leviev declared.
Diamonds, he continued, should go to fulfill the prophecy "They will beat their swords into plowshares and their spears into pruning hooks. Nation will not take up sword against nation, nor will they train for war anymore" (Isaiah 2:4).
Geology May Lead to Better Way of Finding Diamonds
Scientists researching the Earth's crust and mantle may have found a more efficient way of locating diamonds.
According to Professor Kevin Burke of the University of Houston, geologists have known for more than half a century that volcanic kimberlites containing diamonds are located in highly concentrated areas.
Burke, who researches geology and tectonics, and his co-researchers published a paper in the July 15 issue of Nature Magazine entitled "Diamonds Sampled by Plumes from the Core-Mantle Boundary."
In practice, 10% of the Earth's landmass at the most has been searched for diamonds. But the recent work by Burke and his team – Trond Torsvik of the University of Oslo, Bernhard Steinberger at the Helmholtz Centre Potsdam in Germany, and Lew Ashwal and Sue Webb from the University of the Witwatersrand in South Africa – has demonstrated that kimberlites were propelled through cratons (rigid regions of the continental crust) under certain specific conditions, a parameter that will allow the search for diamond sources to be narrowed and refined.
The team found that diamond bearing kimberlites originate from hot mantle rock (mantle plumes) that penetrate the Earth's mantle from next to the planet's core.
The boundary between the Earth's mantle and its core is approximately 2,000 miles below the planet's surface, and only in recent years has Burke's team gathered evidence that plumes from this depth extend to the surface.
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WDC: KP Strikes Consensus on Marange Diamonds
The World Diamond Council concluded its 7th Annual Meeting in Russia with the announcement that the Kimberley Process had reached consensus on an agreement which will enable the sale of diamonds harvested from Zimbabwe's Marange diamond fields.
According to a WDC press release, Zimbabwe will be able to start exporting roughs diamond from the Marange production of May 28 and on, starting August. Nevertheless, "During this period, the Kimberley Process will conduct a review mission to Zimbabwe, which will be held in conjunction with the first visit to the country by the Kimberley Process Monitor," said the release.
The monitor will visit Zimbabwe in early September to certify any future exports, and "The Kimberley Process Monitoring Committee will review the report issued by the review mission to formulate a position regarding future exports."
KP Chair Boaz Hirsch defined the agreement as victorious for KPCS: "The past several months have been difficult, but they have clearly demonstrated that not only does the Kimberley Process have teeth, it also is able to achieve results."
"Although we can regard this as progress, there remains much to do," said World Diamond Council President Eli Izhakoff.
"Although the discussions were often intense, a great deal of good will was shown. We need to build on this and to continue the hard work of the past several months."
Throughout the two-day WDC gathering, Kimberley Process negotiators had gathered in intensive meetings, with the goal being to break the log-jam over Zimbabwe diamond exports, added the press release.
WDC President Eli Izhakoff invited the Kimberley Process to hold a mini-summit in St. Petersburg alongside the World Diamond Council, in another attempt to reach agreement over Marange. As a result, a senior mission from the government of Zimbabwe, alongside high-ranking delegation from the United States, arrived in Russia.
The Plenary Session brought to St. Petersburg representatives of the diamond industry from Belgium, Israel, India, Russia, Namibia, South Africa, the United Arab Emirates and the United States, rough diamond producers, representatives of government from producing, cutting and consumer centers, member of the banking community and the media.
While the resolution of the situation in Zimbabwe remained high on the agenda, another central issue were the steps needed to reform and refine the Kimberley Process, seven years after its rough diamond certification scheme was first launched.
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