This week, the Antwerp World Diamond Centre and the University of Antwerp hosted an “Innovation and Diamonds” conference at the Antwerp Diamond Bourse, featuring specialists from across the entire spectrum of the diamond trade, from mining to blockchain tech. The Innovation and Diamonds conference, taking place in the framework of the Antwerp Summer University program dedicated to the diamond industry, featured eight keynote speakers and five dedicated workshops addressing the latest trends and emerging innovations in the trade, including state-of-the-art technologies such as the blockchain and trade finance instruments.
The U. Antwerp and the AWDC, together with the Belgian Federation of Diamond Bourses and the Syndicate of the Belgian Diamond Industry, last week kicked off the two-week summer school program - "From Mine to Finger: A deep dive into the world of Diamonds". The first week of the program provided its 18 participants - mainly Master & PhD candidates, graduates, researchers and young professionals from four continents - with an introduction to the historical, geological, technical, economic, commercial and ethical perspectives of the global diamond trade. The second week consisted of the keynote sessions and workshops, at the conclusion of which they successfully presented their ‘thesis’ projects to a jury.
Kicking off the week of keynote sessions was William Lamb, CEO of Lucara Diamond Corp., who discussed the technology behind the transformation of the Karowe mine in Botswana into a state-of-the-art operation. After experiencing a stroke of “blind luck” with the discovery of their first large stone - a 239-carat diamond signifying a turning point for the company - Lucara invested heavily in processing and crushing technology. “It is much easier to break a large stone than a small one”, he noted. Once they became aware the resource contained large, gem-quality diamonds, they adapted their methodology and technology. “Mining diamonds is not rocket science. You are crushing the rock. It’s just that the way we are doing it at Lucara is very different than the way anyone else is doing it … It’s not that we have more type II-A diamonds than anyone else. We have just figured out how to recover them.”
Next up, Sergey Panchekhin, the Managing Director of ALROSA Belgium, a sales and distribution subsidiary of the Russian mining company ALROSA, explained how the world’s largest diamond producer succeeds in mining and distributing the world’s largest rough diamond supply, as well as managing operations in the unimaginably harsh environment of northern Russia. He explained that ALROSA runs a long-term operational excellence program that is expected to save up to $160 million annually from further improvement of operating efficiency.
Diamond Midstream Inc.: The New Non-Profit Association
Highlighting the second day of keynotes, renowned diamond analyst Chaim Even-Zohar - author, consultant, and one of the leading authorities on the diamond trade - delivered a highly spirited, no-nonsense plea for profitability in the diamond pipeline. “We have to face reality”, he says, referring to the lack of profitability in the midstream, meaning that the only way to survive is for midstream traders to add value from rough to polished: “If you don’t add value, go home.” He further addressed the complicated relationship between finance and compliance demands, and expressed concerns about undisclosed synthetic diamonds, calculating that 85% of gem-quality synthetics are undisclosed, losing their manufactured identity in the pipeline. “Trump would call them undocumented immigrants”, he said in his inimitable style.
Earlier in the day, Janak Mistry, gemologist and CEO of leading diamond equipment manufacturer Lexus Softmac, and Sergey Sivovolenko, CEO of Octonus, a leading Russian firm in technology for diamond processing, shed some light on how technology and innovation will shape the future of the diamond industry.
Finance, bankability and transparency: the times they are a-changin
Day three featured two highly respected keynote speakers: Howard Davies, the Head of De Beers Commercial Development, and Leanne Kemp, founder and CEO of tech startup Everledger - which recently won the award for Best Blockchain Company at the European Financial Technology Awards, as well as Innovator of the Year at the Penrose Innovation Awards. They were also recently named among the top 25 most exciting bitcoin startups globally. Howard Davies, who played an instrumental role in developing De Beers’ Supplier of Choice strategy, explained the systems, processes and strategy that support the 2015-2018 sales agreements with their Sightholders. He also explained the new initiative that requires all De Beers Sightholders to produce annual consolidated financial statements, expressed to the International Financial Reporting Standards (IFRS), and with an unqualified audit opinion from an auditor.
Leanne Kemp introduced her tech startup Everledger, a permanent, digital, global ledger that tracks and protects diamonds and other valuable goods on their lifetime journey. Using technology like blockchain, smart contracts, machine vision and artificial intelligence, Everledger creates an immutable digital footprint for a diamond, providing various stakeholders throughout the supply chain, from insurance companies to financiers, with an immutable history of an items authenticity, existence and ownership. “Blockchain technology is a people's technology and is available to small companies. With the right combination of industry, data science and software engineers, the problems of the diamond industry can be solved.” A bold statement from a bold woman - whom Business Insider UK recently ranked in the top ten coolest female startup founders in the UK. She also stated that, “Insurance could be the answer to our banking problem! By which I mean creating partnerships between banking and insurance with a view to coming together with the diamond industry to agree upon new mechanisms of trust.” The real answer, however, is actually quite simple: “More nerds!”
Investment and Digital Transformation
The final day of keynote readings kicked off with Paul Danneels - named European CIO of the Year in the Public Sector by the CIO NET community (an organization he now chairs) - now the recently appointed Chief Transformation Officer for the Belgian Federation of Notaries. His message was about, “Making a bridge from an old-fashioned industry to industry of tomorrow,” in part by implementing an outside-in sensibility. He encouraged people to take small steps and realize that failure is most definitely an option. “Don’t start out trying to make the biggest app on the market. Start small. Fail fast. Manage risk. The first approach may not be the right one, but you can build on that.” This strategy entails, “getting rid of traditional ways of defining a project. You have to be able to adapt as new situations arise.”
Closing out the week was Yaniv Marcus, founder of the Diamond Investment & Intelligence Center, who discussed the potential for diamonds as an investment. One of his goals is to find a way to inject transparency and regulation into diamond investment transactions. “Transparency and valuation are what are preventing people from entering the investment arena,” he said, emphasizing that, “Education is the key factor for changing perception.” This goes not just for the casual investor, but also the multi-billion dollar investment community. Contrary to common opinion, he argues, “Illiquidity is a positive thing for diamonds as an investment.” When owners have an emotional attachment to their precious items, they hold on to them longer, reducing availability and - as scarcity drives up price - creating a greater store of value.
In the framework of the Antwerp Summer University, AWDC also organized a Tech Expo in the Antwerp Rough Diamond Bourse focusing on the latest technological developments in the global diamond industry. The Tech Expo has the ambition to become the leading platform for technology currently being developed, as well as for existing technology, including equipment, software and applications used by diamond professionals across the pipeline.