GIA senior industry analyst Russel Shor, in his recent article, "Diamond Producers Aim for Lower Qualities in Today’s Market", explains how sophisticated mining techniques enable major diamond miners to target their drilling to meet polished diamond demand.
Canadian miner Mountain Province Diamonds Inc., a 49% participant with De Beers Canada in the Gahcho Kué diamond mine located in Canada’s Northwest Territories, today announced its recently completed seventh diamond sale in Antwerp was the largest to date in terms of volume and value.
Australian junior miner Lucapa Diamond Company has completed the seventh sale for 2017. The company earned US$7.4 million from the tender of 3,214 carats of rough alluvial diamonds from the Lulo Diamond Project in Angola. This represents an average price of $2,298 per carat, and brings gross proceeds from Lulo diamond sales in 2017 to US$24.3 million, for an average of US$1,640 per carat. The company notes that diamond recoveries and grades have improved at Lulo since the return to the high-value Mining Block 8 and 6 areas, after the Angolan wet season.
Russian diamond mining giant ALROSA announced that its revenue in H1 2017 fell by 17% in current value terms to $2.66 billion (RUB 155.6B), while net profit tumbled by 46% to $840M (RUB 48.9B).
Independent analyst and consultant on diamonds and the mining industry, and publisher of the Zimnisky Global Rough Diamond Price Index, Paul Zimnisky has published an overview of Natural versus Lab-created Diamond Price (1ct)
Despite ongoing breakage issues during processing, Canadian junior miner Stornoway Diamond experienced an uptick in prices for rough diamonds from its Quebec mine during the second quarter of 2017. At its two tenders held in Antwerp during the period, Stornoway achieved average diamond pricing of US$87 per carat, compared to US$81 per carat in the first quarter. “We are particularly encouraged by the steady increase in pricing for Renard diamonds as the market familiarises itself with our production,” said company President and CEO Matt Manson.
The trend of high volumes of rough diamond exports from Antwerp continued in July, while the diamond capital’s polished trade showed signs of life among persistently soft results. According to figures published by the AWDC, on a year-over-year basis, the volume of rough diamond exports increased significantly (20%) for the third month in a row (+55% May, +53% June), totaling nearly 11 million carats, while their value actually declined by 4% to $1.1 billion. The volume of rough imports also increased 15% while their value tumbled by 14%.
Australian junior miner Lucapa Diamond Company earned US$1.5 million from the sale of 2,070 carats of rough alluvial diamonds from the Lulo Diamond Project in Angola during the sixth sale of 2017. This represents an average price of US$710 per carat, and brings gross proceeds from Lulo diamond sales in 2017 to US$17 million, for an average price of US$1,485 per carat. The company notes that diamond recoveries and grades have improved at Lulo since the return to the high-value Mining Block 8 and 6 areas, after the Angolan wet season.
Independent analyst and consultant on diamonds and the mining industry, and publisher of the Zimnisky Global Rough Diamond Price Index, Paul Zimnisky has published an in-depth article on the current state of the diamond industry as it heads into the second half of 2017. Reprinted from Paul Zimnisky Diamond Analytics, courtesy of Paul Zimnisky.
De Beers and parent company Anglo American (AA) today announced their interim financial results for the six months ended 30 June 2017, with the diamond giant reporting a mixed bag while the diversified miner saw its massive restructuring bear fruit. De Beers underlying financial result were positive, as Underlying EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 3% to $786 million (H1 2016: $766 million), capital expenditure (Capex) dropped significantly and its return on capital employed (ROCE) for the year increased from 7 to 11%.
Independent analyst and consultant on diamonds and the mining industry, and publisher of the Zimnisky Global Rough Diamond Price Index, Paul Zimnisky has published an in-depth article charting the vicissitudes of rough diamond prices on a quarterly basis for the past 10 years - since the onset of the global financial crisis. We consider this a must-read for anyone seeking to gain insights into the diamond industry as a whole and rough supply-side dynamics in particular.
Diamond trader and brick & mortar crusader Melvin Moss is back at his provocative best in his most recent diatribe, "The #Diamond Family is Dysfunctional". He argues that major diamond miners producing too much rough at prices unsustainable for the rest of the industry (which deals with underpriced polished) and are extending their reach across the pipeline at the expense of everyone else - particularly retailers. "The diamond pipeline is dysfunctional", he writes. "Miners have a primary obligation to their shareholders.
Canadian junior miner Stornoway Diamonds sold 350,159 carats in two scheduled Antwerp sales (2017 sales #4 and #5) for gross proceeds of US$31.9 million (C$40.9 million), at an average price of US$87 per carat (C$117 per carat), the company announced in a press release. This represents a drop from the 459,126 carats sold across three sales in Q1, earning US$38 million, but the price of rough per carat rose from $US83 per carat earned in the previous quarter.
Canadian junior miner Diamcor Mining Inc. sold 8,318.82 carats of rough diamonds for US$1,851,122.55 ($222.52 avg/ct) in fiscal Q1, ending June 30, 2017, from the newly expanded facilities at the company’s Krone-Endora at Venetia Project in South Africa. This represents a ~38% decrease compared to the 13,384.72 carats tendered and sold in the first fiscal quarter ending June 30, 2016, but only a 3% decrease in revenues compared to the $1,905,978.44 realized during the same period in the prior fiscal year.
The Kimberley Process has published its 2016 figures for the global diamond trade, covering rough diamond production and value, imports and exports, as well as KP Certificate counts. The most notable takeaway is that while overall the volume of rough diamond production in 2016 increased 5% to 134.1 million carats from 127.4 million carats, the value of that output slid 11% to $12.4 billion from $13.88 billion the previous year. From a trading standpoint (imports & exports), however, the KP reports a significant upturn following the 'crisis' year of 2015.
Antwerp's diamond trade in June mirrors the trends we have seen from the diamond capital over the first half of the year 2017, with significant volume increases of lower-priced rough exports and a persistently soft polished trade. On a year-over-year basis, the volume of rough diamond exports increased for the second month in a row by more than 50% (53%) while their value rose only 24%. The volume of rough imports also surged 31% while their value lagged behind at 5%.
They might be small, at only 0.039 and 0.025 carats, but Australian junior miner Merlin Diamonds discovery of two pink diamonds is nevertheless promising. Merlin Diamonds Ltd., owner of the Merlin diamond mine in the Northern Territory, Australia, said it is encouraged by these discoveries that indicate the possibility of further pink diamonds at the Merlin diamond mine. The latest find follows the recovery of a 0.70 carat pink diamond announced last March.
For the year ended 31 March 2017, South Africa-based and JSE-listed junior diamond mining company Trans Hex Group reported a loss of $14.1 million (R182.6 million), representing an 81% increase than the year prior, when the group recorded a loss of $7.8 million (R100.8 million). The loss derives from sales revenue decreased by 19.5% to $41.8 million (R540.2 million) compared to the corresponding period a year earlier. Diamond sales by volume fell 17.5% to 40,187 carats, while the average price of rough sold dropped 2.2%, the company reported.
Mountain Province Diamonds' fifth diamond sale of diamonds from the Gahcho Kué mine in Canada was its best to date, setting new highs in overall revenue, carats sold and price per carat. The junior miner sold 220,000 carats at its June tender in Antwerp, earning $2.1 million for an average price of $95 per carat, a solid increase from the $72 and $86 per carat earned respectively in sales 1-3 and 4.
In his latest blog post, "A Market in Chaos", diamond industry researcher and analyst Edahn Golan examines the disconnect between the rising trend of lower price point/smaller-diamond jewelry and the willingness of manufacturers to pay more for the rough to produce it. He starts with trends in the consumer jewelry market - because this is the ultimate determining factor for the diamond market - that are demonstrating a distinct shift towards lower value goods. Drawing on his impressions from the JCK Las Vegas show, Golan writes, "The trend of smaller diamonds stood out.
Russian diamond mining giant ALROSA sold rough and polished diamonds worth $472.1 million in the month of May 2017, an increase of 33% compared to a year earlier, the company today announced. Revenue from rough diamond sales amounted to $467.6 million, while polished diamond sales earned the company $4.5 million. This represents a significant (51%) increase in rough diamond revenues over the $310.2 million sold in April. For the year thus far, January–May 2017, ALROSA’s rough and polished diamond sales have exceeded $2.13 billion − 5% below the same period in 2016.
Russian diamond mining giant reported rough-diamond revenue its first quarter results for 2017. Group revenue is up 38% q-o-q but down 17% y-o-y to $1.5 billion (RUB 84.8 bn) for the three months that ended on March 31. Gem-quality rough sales fell by 18% to $1.35 billion (RUB 76.1 bn), with the remaining revenue coming from industrial grade diamonds, gas sales and other products.
Russian diamond mining giant ALROSA reports a drop in rough diamond sales in April 2017, earning US$310.2 million as, "the share of small-size, inexpensive rough diamonds was significantly higher than early in 2016." Polished diamond sales in April amounted to US$7.6 million. In January–April 2017, ALROSA sold 16.9 million carats of rough and polished diamonds, which is 7% higher than the sales in January-April 2016.
Antwerp's diamond trade experienced modest and mixed results in April: the volume of rough diamond exports stayed flat for the month while rough imports were down mainly as a result of De Beers not holding a sight in April. Volume declines were also recorded for imports as well as exports of polished goods, in part due to the spring holiday season around the world, though the average value of imports outweighed the fall in volume and ended up slightly on a year-over-year basis.
Rapaport has issued a press release on the current rough and polished diamond markets, which boils down to the following: "Amid sluggish polished markets, rough trading remained strong." The second quarter of the year is typically a slow period for diamond trading, and April this year proved no different.
ALROSA's Q1 2017 diamond production totalled 8.9 million carats, up by 9% year-on-year, to 8.9 million carats from 8.2m.cts. in Q1 2016, which is in line with its 2017 production plan of 39.2 million carats (+5% y-o-y increase). The growth in production was driven by ramping up diamond mining at Aikhal, Mir, International, Udachny underground mines and also by processing of higher grade ore from the Jubilee pipe at its Aikhal Division in Yakutia - an open pit mining operation and its largest, good for 29% of total production.
Dominion Diamond Corporation reports strong growth in gross margins, adjusted EBITDA and net income of $5.6 million - despite a 27% decline in sales - in Q4 of the fiscal year ending January 31, 2017. This was attributable to ramp up of high value production at Ekati and steady performance at Diavik. The sale, late in the quarter, of Ekati mine goods from higher value Misery Main open pit and Koala underground ore processed in late Q3 fiscal 2017, together with higher processing volumes at the Diavik mine in the same period, paved the way for their stronger consolidated gross margin.
The diamond industry's famous supply and demand chart - the 'hungry crocodile' - representing its forecast of rising rough diamond prices as production falls to shortage levels, "Not only has never materialized, it oversimplifies the fact that the industry’s 15,000 different categories of diamonds are performing in very different ways," writes Thomas Biesheuvel for Bloomberg.
Diamond industry analyst Paul Zimnisky, author of the Zimnisky Global Rough Diamond Price Index, provides his thoughts on the recent struggles of diamond mining stocks. Given what is now being widely considered as a recovery and stabilization of the diamond industry last year, an optimistic post-election U.S.
ALROSA did not carry out sweeping changes to prices at its diamond trading session with long-term clients in January and February, representatives of two of the miner's counterparties told Interfax, but the company did adjust prices for small, low-quality diamonds, or so-called Indian 'makeables' in January, reacting to weaker demand for this category.
Stornoway Diamond Corporation has issued its annual results, detailing a memorable 2016. Their Renard Diamond Mine officially opened on October 19, 2016, and following the commencement of ore processing on July 15, 2016, commercial production was formally declared on January 1, 2017. The first sale of Renard Diamonds was held during November in Antwerp in Belgium. In total, 38,913 carats were sold at an average price of US$195 per carat, for proceeds of US$7.6 million (C$10.2 m).
Trans Hex, a JSE-listed diamond exploration and mining company with well-established land operations in South Africa and interests in Angola, says trading volumes have returned to normal as a result of improved market conditions, leading to stronger results at its October 2016, December 2016 and February 2017 tender sales of rough diamond production from its wholly owned South African operations.
Anglo American and De Beers' 2016 Annual Financial Results (preliminary) confirm a solid rebound from 2015 for the rough diamond giant, with annual revenues increasing 30% to $6.1 billion from $4.7 billion, on the back of a 37% rise in rough diamond sales, which reached $5.6 billion.
Last year Rio Tinto’s diamond revenue slid 12%, leading them to review their plans to extend the life of the Argyle diamond mine, considering the global demand for rough had otherwise strengthened, writes The West Australian. Rio Tinto spent $US2.5 billion expanding the Argyle mine below ground with an expected lifespan reaching 2021. Should they decide not to continue with the planned underground extension, the mine’s closure could come considerably sooner. They are yet to announce whether they will continue with the second stage of the underground block cave at the East Kimberley mine.
Australia's Lucapa Diamond Company, whose main asset is the Lulo diamond project in Angola, has sold a parcel of 2,946 carats of Lulo diamonds earning gross proceeds of US$3.8 million (A$4.9M). This represents an average price per carat of US$1,276 (A$1,671), a far cry from their $2,983 per carat average from the fourth quarter of 2016. The sale comprised diamond recoveries through December 31 2016, and included a 75-carat diamond and a 55-carat diamond.
Zimnisky Rough Diamond Index up 2.1% for week ending Jan 28. Driven by De Beers price raise of 4-5% in >3/4 ct sizes
Citing data from its RapNet Diamond Index (RAPI), Rapaport News writes, "Diamond manufacturing profits were squeezed in January amid strong rough demand while polished prices softened." Despite a disappointing holiday season, demand of rough is strong as jewelers will need to restock after the holiday season. This is demonstrated by De Beers' First Cycle sales of $720 million, its largest sight since July 2014.
De Beers and Anglo American report that rough diamond production for Q4 2016 increased by 10 percent to 7.8 million carats compared with Q4 2015 (7.1 Mct) when production was reduced in response to trading conditions. The company highlights that the increase reflected the ramp-up of Gahcho Kué Mine in Canada, the joint venture between De Beers (51%), which is also the operator, and Mountain Province Diamonds. Rough production surged 24% from Q3 2016 (6.3 million carats) to Q4 2016 (7.8 Mct).
Petra Diamonds, the London-listed mining group focused on Southern Africa that operates four mines in South Africa and one in Tanzania, has reported that for the six months ended 31 December 2016 (H1 2017), rough diamond production, revenue and rough carats sold increased significantly year-over-year, continuing the upward trend established earlier in the year, though rough prices remained flat.
Diamcor Mining has completed the installation of additional operational equipment and expansions underway at its Krone-Endora Mine at Venetia project in Limpopo, South Africa. The junior diamond project developer confirmed that all the work is now complete and all the items are now operational.