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Diamonds – Mining, Lab-Grown and Conflict/Blood

Why is beneficiation in the diamond industry failing? – by Nastassia Arendse (Mineweb.com – October 28, 2015)

http://www.mineweb.com/

Legislation has become a defining feature of the investment regime and is now a liability.

A beautiful parcel of rough diamonds lies across the table as Ilan Kaplan, Vice Chairman of the Diamond Manufacturers Association shares the story behind the issues faced by a typical beneficiator.

The audience at the Diamond Indaba looks on while he explains that apart from the sourcing of diamonds, one of the issues is finding a manufacturer. One has a choice of using an operation that is either based in Johannesburg (a state-of-the-art operation) or in neighbouring Southern Africa. Once you have sourced the goods, you have to pay VAT on your purchase.

Yes, you might get the VAT back in maybe 60 or 90 days, but it will have a major cash flow impact on your business. This reduces your further purchasing ability if another opportunity arises in the interim.

Kaplan says that 30% of the diamonds on the table cannot be manufactured profitably.

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Canada’s once-booming Arctic diamond sector loses luster – by Susan Taylor (Reuters Canada – October 27, 2015)

http://ca.reuters.com/

YELLOWKNIFE, Northwest Territories (Reuters) – A decline in diamond prices because of lower growth in Chinese jewelry demand is dulling the appeal of Canada’s Arctic diamond industry, with the resulting drop in exploration hurting the region’s long-term prospects.

Exploration spending in Canada’s diamond-rich Northwest Territories (NWT), the world’s third-biggest producer, is forecast to drop 54 percent this year, according to a Canadian government estimate earlier this year. That is bad news for an industry where even profitable deposits can take 10 to 20 years to develop into a mine.

“It’s worrisome,” said Tom Hoefer, executive director of NWT and Nunavut Chamber of Mines, which is based in Yellowknife, the territories’ economic hub and capital. “Exploration is the lifeblood of mining.”

Once the engine for booming diamond demand, the growth in China’s appetite for polished gems has slowed alongside its economy.

Anglo American-owned De Beers, the world’s top producer by value, expects 3-5 percent sales growth in China this year for its polished diamonds.

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India a factor in diamond trade migration from Antwerp to Dubai – by Kunal Bose (Business Standard – October 26, 2015)

http://www.business-standard.com/

Earlier, the rough diamond cutting and polishing business had moved from Antwerp to Surat in Gujarat and a few other places, due to cost considerations

For gem traders and jewellery makers over the world, Dubai remains an important trade centre for pearls. But, of late, a growing portion of trade in rough diamonds is getting shifted from the Belgian port city of Antwerp to Dubai, a constituent of the United Arab Emirates (UAE). Earlier, the rough diamond cutting and polishing business had moved from Antwerp to Surat in Gujarat and a few other places, due to cost considerations.

Business in rough, is now being squeezed out of the diamond district of Antwerp, which accommodates a World Diamond Centre and four trading exchanges, as dealers are finding it difficult to get bank funding. The big blow to dealers there, mostly Jews and Indians, came when Antwerp Diamond Bank (ADB) started the process of winding up operations globally, leaving a big gap in trade funding.

ADB used to make available around $1.5 billion to the trade. Also, toughening of banking regulations and non-governmental organisations doubting the effectiveness of the Kimberley Process Certification scheme (KPCS) in stopping all ‘blood diamonds’ finding their way into the legal market have made some other banks curb lending to the trade.

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Documentary film looks at effects of mine on Attawapiskat – by Tanya Talaga (Toronto Star – October 22, 2015)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

What is it like for a northern First Nations community to live beside a diamond mine?

Documentary filmmaker Victoria Lean zeroes in on what it is like for the Attawapiskat First Nation to be neighbours with the Victor diamond mine in her film After the Last River.

The Victor mine, owned by global mining giant De Beers, is just 90 kilometres west of Attawapiskat, a community in James Bay District that has battled floods, an ongoing housing crisis and a massive diesel spill underneath an old school.

Lean set out to tell a story about the consequences of mining in one of the most ecologically sensitive areas in the North, and in doing so she unearthed the challenges of a community struggling to exist.

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Now Oppenheimer properties edge out of De Beers’ Diamond Route – by Martin Creamer (MiningWeekly.com – October 20, 2015)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – The Oppenheimer family, which three years ago sold out of diamond company De Beers, announced on Tuesday that it was delinking the properties of E Oppenheimer & Son from the Diamond Route, which takes in the 250 000 ha of cross-regional land that originally kept potential diamond thieves far away from diamond diggings, but which is today geared to conservation and ecotourism, incorporating new and largely undiscovered natural wonders, as well as historical and cultural elements.

In an opening address to the sixth Diamond Route research conference in Johannesburg, Nicky Oppenheimer, who launched the initiative at the World Summit on Sustainable Development in 2002 while chairperson of De Beers, said that long and hard thought had been put into separating “and it seems to me that this is the right time for the Oppenheimer properties to separate themselves from the Diamond Route”.

Oppenheimer emphasised that the decision was not being taken with any sense of conflict or anger but was the result of the “inevitable drifting apart that takes place when entities are no longer rubbing shoulders, joined at the hip”.

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Anglo American slides on De Beers downturn fears – by Bryce Elder (Financial Times – October 19, 2015)

http://www.ft.com/

Anglo American was Monday’s sharpest FTSE 100 faller on worries that its balance sheet strength will be tested by a downturn at De Beers, its most profitable division.

De Beers is likely to be the laggard when Anglo delivers its third-quarter production update on Thursday, said dealers.

The diamonds business, which accounted for nearly a third of Anglo’s first-half operating profit, has been under pressure as stone polishers run down inventories following a weak end to 2014.
Citigroup forecast Anglo’s diamond production by weight to have fallen 11 per cent against the previous quarter.

Over the same period rough diamond prices slipped as much as 10 per cent with demand squeezed by a strong dollar and a credit crunch among the polishers.

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Alrosa president ‘concerned’ over synthetic diamonds – by Tom Davis (Jewellery Focus – October 15, 2015)

http://www.jewelleryfocus.co.uk/

Andrey Zharkov, president of Russian diamond mining company Alrosa, has warned that the diamond industry is suffering from reputation risks due to synthetic stones.

Speaking at the World Diamond Council (WDC) in Moscow on Tuesday, October 13, Zharkov said that the industry should be concerned by “growing occasions” on the market when natural diamonds are mixed with synthetic diamonds, or when “stones are worked on for the purpose of their improvement.”

Under a new Russian law “stones of synthetic origin, even having characteristics of natural stones, are not considered to be precious ones,” he said. “Therefore, the law determines that synthetic stones cannot be associated with precious stones.”

He said that Alrosa is conducting research into developing faster and more effective synthetic diamond detection devices. The WDC will play a more active role in defending and supporting the “favourable reputation and positive image of the diamond industry”, he said.

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How Illegal Diamond Mining Threatens Brazil’s Indigenous Communities – by Fellipe Abreu and Luiz Felipe Silva (InSight Crime – October 14, 2015)

http://www.insightcrime.org/

The Cinta-Larga indigenous group in Brazil is on the brink of collapse as they struggle to confront illegal mining in one of the world’s largest diamond deposits.

“Our land is our spirit. An indigenous person without his land is an indigenous person without a soul.” This is how one of the leaders of the Cinta-Larga tribe ends his speech at a meeting held in May to discuss new indigenous policies. Believed by the indigenous to be inseparable, the land and the soul of the Cinta-Larga suffer together: the cultural genocide and the violence against their members is the result of violations that occurred on the grounds that they consider sacred.

Beneath the indigenous reserves Roosevelt, Serra Morena, Aripuanã and Aripuanã Park, between the states of Rondônia and Mato Grosso where the Cinta-Larga live, hides what may be the world’s largest diamond deposit. The glistening of the stones began to attract illegal miners to the Lajes creek region between 1999 and 2000. The demarcated indigenous territory (which in theory can not be used for mining activity, except for informal mining conducted by the indigenous themselves) is a clearing approximately 10 kilometers wide and 2 kilometers long, in addition to an appendix called the Grota do Sossego, which also spans 2 kilometers.

However, miners and indigenous estimate the area to be larger: they say more than 1,000 hectares are used for exploratory mining.

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Cree community looks on warily as De Beers scours North for diamonds – by Tanya Talaga (Toronto Star – October 10, 2015)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

With De Beers’ Victor Mine near Attawapiskat approaching the end of its lifespan, the company is looking farther north — causing a stir in Peawanuck, where residents are concerned about protecting their traditional lands.

WEENUSK FIRST NATION, ONT.—From a height of 300 metres, Jennifer Wabano looks out the window of the eight-seat float plane as it approaches the Winisk River watershed.

Wabano, a mother of 10, watches the mesmerizing landscape of the Hudson Bay Lowlands. String bogs resembling giant tiger stripes splashed across the land stretch for miles before giving way to fields of pristine, lime-green peatland that is thousands of years old. Scattered throughout the peat are hundreds of freshwater lakes of all shapes and sizes that were formed a millennium ago by retreating glaciers.

The lowlands are one of the world’s last untouched carbon storehouses, trapping the gases that warm the globe at an increasingly alarming rate. Bald eagles nest along the banks of the Winisk River. In summer, polar bears wander through town in search of food. Brook trout are caught in the mud flats of Hudson Bay. Migratory caribou and moose are staples in this community that continues to depend on the land for its existence.

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The blood diamond trade is tearing the Central African Republic apart – by Jake Flanagin (Quartz Africa – September 30, 2015)

http://qz.com/

The Central African Republic (CAR)—one of the poorest countries in the world—has been embroiled in intense religious conflict since Dec. 2012. Fighting between the predominantly Muslim rebels (known as the Séléka) and Christian/animist anti-balaka militia broke out when the former accused Christian president François Bozizé of violating peace agreements laid down in 2007 and 2011.

The Séléka supplanted Bozizé with their own president, Michel Djotodia, from Mar. 2013 to Jan. 2014; though he has since been replaced by two acting presidents—currently, former mayor of Bangui, Catherine Samba-Panza.

Conflict has continued into 2015, marred by reports of massacres committed by the anti-balakas against Muslims (which constitute roughly 15% of the national population).

In the midst of one of the bloodiest conflicts the region has seen in recent years, with the death toll of more than 5,000, according to Amnesty International, Western companies have quietly carried out business as usual. Such is the hypnotic draw of Central Africa’s diamond industry.

Prior to the Séléka’s gaining the presidency, diamonds represented about half of the CAR’s total exports, and 20% of its budget receipts.

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[Dubai] The New Diamond Capital – by Stian Overdahl (Bloomberg Businessweek – April 1, 2015)

http://www.businessweekme.com/

Dubai closes in on rival centres such as Mumbai and Antwerp

When India’s diamond manufacturing industry began to grow quickly in the 1960s, members of its family-run businesses had to travel to Antwerp, Belgium to buy the rough stones from diamond traders. Since the 15th century, Antwerp had been the centre of the diamond world, its Diamond Quarter bustling with buyers and sellers of rough and polished stones, conducting their trade among a host of cutting and polishing workshops.

With cheaper manpower than the traditional manufacturing centres of Antwerp and New York, and new machines that made the process easier, India’s cutting and polishing industry boomed. By cutting smaller stones that hadn’t been considered profitable previously, Indian manufacturers made greater returns.

Over time, Indian buyers moved higher up the ladder, able to buy directly from producers, rather than from wholesalers or dealers. Today, India dominates the manufacturing sector, responsible for more than 80 per cent of the world’s output of polished stones. But nowadays there’s less need for India’s diamantaires to make the long journey to Antwerp. Dubai—a new global hub for diamond trading—is only three hours away.

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New Old World: How Indian families took over the Antwerp diamond trade from orthodox Jews – by Pallavi Aiyar (Quartz India.com – July 23, 2015)

http://qz.com/

This is excerpted from New Old World: An Indian Journalist Discovers the Changing Face of Europe.

Antwerp’s diamond business had long been controlled by its orthodox, largely Hasidic Jewish community.

Although 65% of the Jewish population of the city was exterminated during the Second World War, those who had remained, their ranks swelled by others fleeing former Nazi-occupied countries in Eastern Europe, had been able to regain control of the centuries-old diamond trade.

In the popular European imagination, diamonds remain inextricably linked with the Jews. When I’d told a group of Julio’s colleagues in Brussels my plans for a story on the Indian community’s role in the trade, they’d expressed surprise. Diamonds? Wasn’t that a Jewish fiefdom?

Once upon a time, it had been. But today it is the Mehtas and the Shahs rather than the Epsteins and Finkelszteins who rule Hoveniersstraat. Indians have come to control almost three-quarters of Antwerp’s diamond industry, a figure that had been associated with the Jews only a few decades ago.

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Rough Cut: Nearly all the world’s diamonds-legal or not-pass through this one Indian city – by Jason Miklian (Foreign Policy Magazine – January 2, 2013)

http://foreignpolicy.com/

SURAT, India — The Gujarat Mail is just another red-eye train. Twelve powder-blue passenger cars crisscrossing, like so many hundreds of others, India’s northwestern breadbasket through the dark of night. At five minutes past two, the Mail begins its four-hour journey, lumbering south from Surat to Mumbai. Inside, the third-class cabins are equal parts scurrying roaches and dangling unwashed feet; fading monsoon rains that bleed through the iron-barred windows grant only fleeting mercies.

A few hundred unwilling insomniacs are sandwiched together, helplessly sweating on filthy vinyl benches as the shrieking of the rails splinters dreams along every gentle bend. In this part of the world, it’s an utterly unexceptional journey.

Aside from the $25 million or so in freshly polished diamonds on board, that is. The grungy wagons are filled with dozens of diamond mules, each man secretly carrying tens of thousands of dollars of stones inside custom-made tank tops with hidden stomach pouches.

Everyone sleeps with one eye open. Despite their attempts at traveling incognito, the nervous paces of the conductor — and the fact that the doors are bolted from the outside for the entirety of the trip — belie the false sense of ease. Altogether, the mules on this sweltering, tense train trip shuttle almost every single diamond sold in the world today.

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Lab-grown diamonds set to fill projected deficit as mined production declines – by Zandile Mavuso (Mining Weekly – September 18, 2015)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Technological developments that enable manufacturers to produce grown diamonds have presented the industry with a significant growth opportunity, with a noticeable influence on the economy and the diamond value chain, as researchers predict the demand for grown diamonds to double in the next ten years.

This is because, in addition to the jewellery industry, manufacturing and energy companies also use grown diamonds. Singapore-based grown diamonds manufacturer IIa Technologies (pronounced ‘2a Technologies) says this is a result of the projected decline of mined diamond supply, as the quality levels of mined diamonds are unpredictable for high-technology applications; further, almost all of the mined diamond production is absorbed by the gems and jewellery industry.

Owing to this, grown diamonds are filling an important gap in the diamond industry as a new source of raw material.

Consulting firm Frost & Sullivan’s ‘Grown Diamond Impact 2050’ report, published last year, indicates that mined diamonds are a finite resource, considering the extreme and rare occurrence of the natural surroundings in which they are formed. Therefore, the sustainability of the mined diamond industry as a primary source for the industry is declining.

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AUDIO: [De Beers and Attawapiskat] After the Last River screens at Bay Street Film Festival in Thunder Bay (CBC News Thunder Bay – September 10, 2015)

http://www.cbc.ca/news/canada/thunder-bay/

Movie highlights relationship between First Nation and mining company in northern Ontario

The Bay Street Film Festival kicks off Thursday through Sunday in Thunder Bay. One highly-anticipated film screens Thursday evening after receiving a great deal of attention during production.

After the Last River tells the story of the Attawapiskat First Nation’s experience with the nearby De Beers diamond mining company in northern Ontario.

The small community near James Bay garnered international attention for its’ social issues through the grassroots Idle No More campaign.

Vicki Lean, the film’s director, said there’s not enough discussion about how mining companies and small communities can impact each other.

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