According to MiningMX, GEM Diamonds, operating the high-quality diamond yielding Letšeng mine in Lesotho, halved its net debt to $5.5 million (compared to $10.1 million at the end of 2019) as a result of improving efficiency and successfully reducing costs, such as management salary cuts that remain in place, as well as higher than expected sales results, with an average of $1,707 per carat in the first half of the year.
After months of a virtual standstill in most of India's polishing industry, the Indian diamond industry trade bodies say polishing activity in Surat is now at 20-30% capacity, and they are no longer calling on the local manufacturing sector to voluntarily ban imports of rough diamonds.
At its Annual General Meeting presentation, Lucapa, the Australian company operating two of the world's highest $ per carat diamond mines, Lulo in Angola (alluvial) and Mothae in Lesotho (kimberlite), sized up the effects of the COVID pandemic on the company's operations and performance.
The COVID pandemic, so much is clear, is far from over, and continues to put pressure on the global economy. Sales of personal, aspirational luxury items are taking a hit, but for the super rich, the Financial Times reports, that doesn't necessarily mean they are spending less. The so-called "ultra high net worth individuals" have shifted consumption patterns, from spending on high-end travel and restaurants, to buying real estate closer to home and exclusive items, from paintings over autographed sneakers to exlusive diamonds and jewellery pieces online.
Chinese retailer Luk Fook has announced a 71% drop in sales in the first fiscal quarter, with largest same-store sales declines in Hong Kong and Macau (76%). Of the company's self-operated stores, a large proportion is located in Hong Kong and Macau (60) compared to the amount of shops in Mainland China and other locations (118). Hong Kong, a popular destination for luxury shopping tourists, has been under continued restrictions, such as a compulsory 14-day quarantine, as wel as renewed outbursts of civil unrest.
Bloomberg reports that in a letter to De Beers' staff, seen by Bloomberg News, the company's CEO, Bruce Cleaver, has communicated the company is looking into ways to reduce costs and increase revenue across all operations. Sales have dropped dramatically since the outbreak of the pandemic and the company fears demand for diamonds is not likely to improve in the short term. According to Bloomberg, insiders believe the restructuring could also involve job cuts and changes to the traditional selling system of sights and sightholders.
In a recent update on the website of the Government of the Hong Kong Special Administrative Region, published Wednesday July 22, COVID-19 restrictions for foreigners traveling to Hong Kong have been prolonged to the end of the year, Dec 31st and are likely to remain in place until that date, considering across the globe, including in Hong Kong, the number of cases has been rising in the past weeks.
For the sixth sight of the year, De Beers will continue to offer their clients the possibility to view goods in Antwerp and also Dubai, starting on Monday. Alrosa announced earlier this week it will drop mandatory buyout minimum requirements for the July sale, also starting on Monday, and as of August, the volumes will be reduced to 50% leaving clients the option to purchase additional goods via auctions and tenders.
Firestone Diamonds is extending the temporary closure of the Liqhobong mine in Lesotho, until April 2021 or until the market improves. Firestone slashed salaries and has let go most of the workers operating at the mine, which is Firestone's main asset. The company's BK11 operation in Orapa region Botswana, has been under care and maintenance for several years.
After a large number of diamond workers again tested positive for COVID-19, the Surat Diamond Association has decided to shut down all manufacturing and trading operations as well as private vaults for another week, through to July 19, putting the world's largest manufacturing hub for diamonds at an effective standstill once again. The situation will be reassessed on July 19, Indian Express reports.
It was a matter of time before someone would do it, and diamond-studded face masks are the latest craze in India, Times of India reports. One jeweler came up with the idea when he had to create jewelry for a wedding and created the sparkling face masks for both bride and groom.
Rapaport reports on a letter, sent by Israel Diamond Exchange President Yoram Dvash, to the Israeli government, pleading for more support for the Israeli diamond industry, which is "on the verge of collapse". Barely reopened after months of standstill in the trade, Israel recently has been facing an increase in COVID-19 cases and consequent tightening of pandemic restrictions, once again halting the trade on the Ramat Gan bourse floor. The ramifications for the Israeli diamond industry are severe, the letter explains, and the crisis is getting worse.
In an extensive report, Rapaport spoke to a number of jewelers across the US, gauging how businesses are faring through the COVID-19 pandemic. Although circumstances were different throughout the US, with states deciding independently on how strict they applied lockdown measures, the majority of retailers came up with ways to adapt, through appointments, curbside pickups or even home deliveries. The impact of the global pandemic is hitting jewelry retail sales, but many jewelers seem optimistic.
India's woes continue as more COVID-19 cases in Surat, which some deem a veritable infection hotspot, forced a week-long closure of manufacturing units. Meanwhile, the GJEPC and other industry bodies are extending the voluntary ban of rough diamonds from July 10-31st and said they will be calling on large producers to continue their flexibility towards long-term customers. At the same time, as tensions continue to rise between India and China, traders are forced to reroute polished exports to Hong Kong, which are being blocked by Chinese customs.
According to Business Standard, the voluntary moratorium on rough diamond imports into the country, might be extended, citing spokespersons of the GJEPC saying that inventory levels remain high, estimated at 2.3 billion US$, with no need for imports to resume as "it would take another two or three months to service previous orders".
Rapaports trade analyis of the import and export figures of polished diamonds in April in the world's largest consumer market for diamonds demonstrate the massive effect of the COVID-19 pandemic and civil unrest. According to the report, polished imports dropped to the lowest level, with net polished imports (polished imports - polished exports) sinking to -807 million US$, where in the same period (January to April) last year, the net imports stood at a surplus of 474 million US$.
With more than 150 new positive tests among diamond workers in Surat, India's polishing hub, local communities and industry organizations have instated new restrictions, including an 8-day closure of each manufacturing sub-unit if one person, full closure if more than two persons test positive. Already more than 25 units have been close and cafetaria's are not allowed to open.
Mining Weekly reports that Mountain Province, owning a 49% stake in the NWT Gahcho Kue mine, has proposed a deal to Dunebridge Worldwide, an affiliate of shareholder Dermot Desmond, to sell its run-of-mine production, at current market prices at the moment of each sale. The first sale is scheduled for roughly US$22 million later this week. Mountain Province will be entitled to a certain portion of the potential added value - after fees and expenses - generated by Dunebridge when it sells the diamonds in the future.
At its first tender after lockdown measures were relaxed in Antwerp, tender house Koin International has launched an innovative approach to allow customers to virtually participate in rough tenders, through a concept called "Virtual Viewer". Using specialized equipment and technology, including high resolution livestreamed video, a Koin expert acts as the eyes and hands of the client in a realtime viewing experience. The sessions are also recorded, allowing buyers to review goods whenever suits them and make an informed bidding and purchasing decision from any location in the world.
HRD Antwerp, the Belgium-based diamond grading lab is expanding its e-learning program, including live online courses on diamond grading and retail sales in which students can interact live with the instructor. The program will be available in several languages, HRD Antwerp announced. The first course, in English, is scheduled for June 15-19, and comprises of daily 3-hour sessions, between 5PM and 8PM CET.
Alrosa reports its first E-sight, offering long-term clients the possibility to purchase on a stone-by-stone basis was a success, “demonstrating market demand for rough diamonds and a willingness to purchase via online channels.”, says Alrosa deputy CEO Evgeny Agureev.
In a second tender, currently going on, the miner is tendering 700 rough stones from 5 to 10ct batches, open for purchase to long-term clients, as well as Alrosa’s spot and auction customers.
A deal that was announced between LVMH and Tiffany & C° earlier this year, in which the France-based luxury conglomerate led by Bernard Arnault would acquire the iconic jeweler for $135 per share, is potentially falling through, as LVMH is reconsidering its engagement amid the turmoil of the COVID-19 pandemic and unrest in the USA. According to Retail Dive, LVMH’s press release suggests that it is looking to lower the offer, and some sources say that move is based
News outlet Caixin reports that China will continue its severely restricted international flights policy through to at least October. Since the end of March, China has cut international flights by 90%, and has implemented the so-called "Five-One" policy, in which for each domestic airline, only one flight per week to a foreign destination is allowed to operate. Foreign airlines can fly into China no more than once per week and all flights are limited to 75% capacity, according to restrictions implemented by China's Civil Aviation Administration (CAAC).
Alrosa announced that it is currently offering its long-term customers over 800 rough diamonds in the 5 to 10ct range, the largest volume the company has ever put on its digital platform. Since the implementation of the system, Alrosa has made several improvements to the platform, and now allows its customers to bid on a stone by stone basis in a semi-automated bidding process.
According to a Business Wire news release, Canadian miner Dominion has signed a letter of intent with an affiliate of the Washington Companies to sell all of Dominion's assets for approx. US$126 million, and has made an agreement for up to US$60 million in short-term financing from Washington. In April, Dominion filed for and obtained insolvency protection under the CCAA. The agreements will allow Dominion to resume operations at the Ekati mine and meet obligations owed to employees.
While India has allowed some activity to resume in Surat, the country's polishing hub, the industry has announced that the voluntary moratorium on rough imports is delayed to June 1st, with the call to its members to not import rough diamonds for the entire month of June, possibly longer.
In a joint letter, 73 organisations are calling on governments and mining industry actors to increase efforts towards the artisanal and small-scale mining (ASM) operations across the globe. Due to the COVID-19 pandemic, the letter says, the already vulnerable artisanal miners, often women, and the communities they support, are becoming even more vulnerable. The report refers to "high value commodities such as tin, tungsten, tantalum, cobalt, mica and particularly gold."
As many countries are easing out of strict quarantaine, GIA has announced it has reopened its labs in Antwerp, Carlsbad, Gaborone, Johannesburg and Tokyo, each with modified schedules. In Antwerp and Johannesburg, visitors are welcome by appointment, in Tokyo, Carlsbad and Gaborone, the labs will only accept submissions via shipment.
The COVID-19 pandemic is causing a paradigm shift, not only in how we live our lives, stay in touch with friends and family or do our shopping, but also in the way we do business. In an industry that has long relied on face-to-face interactions, particularly in the rough trading business, the crisis is accelerating business processes at a rapid pace. The Diamond Loupe spoke with Johan Erikson, CEO of First Element, a tender house operating in Antwerp, on how their processes have changed in the past few months to adapt to “the new normal”.
Rapaport reports that the Russian precious metals and gemstones repository, the Gokhran, may buy up part of the Russian miner's diamond stockpile, for an amount that ranges anywhere between $500 million and $1.7 billion. Rough sales have dropped dramatically as a consequence of the COVID-19 pandemic, as the miner offered its clients maximum flexibility in purchasing obligations. During past crises, notably in 2009, the state repository alleviated the company in a similar way, at that time buying $1 billion worth of diamonds.
Consumers across Asia are rushing to luxury stores to buy luxury items before an expected price hike. After Louis Vuitton raised prices last week - the third price hike in 2020, many consumers expect other brands like Chanel, Dior and Gucci will follow suit. Higher prices are one strategy to make up for losses caused by the COVID-19 pandemic, Jing Daily reports.
Across Asia, thanks to pent-up demand and the inability for shoppers to travel and buy luxury goods abroad, the luxury market has seen growing in-store traffic and sales.
Times of India reports that India's Bharat Diamond Bourse in Mumbai's Bandra-Kurla Complex as well as the Gems and Jewellery industry at Seepz MIDC can resume operations, albeit with a strongly reduced workforce (10%). India's diamond and jewellery industry has been suffering as the country continues to be under strict lockdown, and export shipments are blocked. Both area's are located in so-called "red zones", which is why only limited workforce can be allowed, state officials said.
Canadian mining company Lucara Diamonds reports a net loss of $3.2 million in Q1, a result of the continued strain on the diamond mining industry and decreased revenues from sales, despite the fact that operations at Karowé have continued throughout the crisis and production was in line with guidance. In the same period last year, the company achieved a net income of $7.4 million, while cash flow dropped to $2.4 million, compared to $10.6 million in Q1 2019.
The Antwerp diamond trade came to a nearly complete standstill as a result of the measures announced by the Belgian Government to flatten the curve of the COVID-19 pandemic. It is scheduled to reopen next Monday, May 4, and industry organizations the Antwerp World Diamond Centre (AWDC) and the Federation of Belgian Diamond Bourses (FBDB) are taking measures to ensure it can do so safely.
Times of India reports that a 700 million US$ shipment of loose diamonds, destined for Hong Kong, is stuck at the Bharat Diamond Bourse, despite efforts to persuade government to allow the Bourse to resume activities with minimal workforce. According to a spokesperson for the Gem and Jewellery Promotion Council (GJEPC), the diamond industry in India, already heavily impacted by lockdown measures, could suffer even more because of exports being blocked; "if business would shift to China and Thailand ... it would be a permanent loss".
Alrosa announced today it will temporarily put its Aikhal underground mine and Zarya open pit operation in care and maintenance starting May 15 in response to the decreased demand and sales of diamonds caused by the COVID-19 pandemic. The Aikhal underground mine is scheduled to reopen at the end of September, while the Zarya mine will remain closed to the end of the year, with regular reassessment of market conditions. Combined, the two operations produced 2.6m carats last year.
By Isi Morsel, C.E.O. Dali Diamond Co.
The diamond industry, from mine to retail, is facing new challenges that are rocking it to its core. Retail stores around the world are closed and that reverberated up the diamond pipeline, bringing wholesaling activity, jewelry manufacturing, diamond polishing, and diamond mining to a complete standstill.
"Can't an overflowing river upstream, cause a lot of damage, from the midstream all the way up to the delta? As the crops along the overflown river's path would be washed out, wouldn't this cause a lot of famine, for an unwanted period of time? Shouldn't the flow be controlled before such a scenario happens? Sometimes, man-made dams are necessary, with some pains in the near future, but fertile and fruitful in the long run..."
Daniel Langer, consultant for some of the world's leading luxury brands, in an article in Jing Daily says that despite our intuition - people spend and will spend less on luxury in and after a crisis - the luxury segment is more resilient than others.