The gold price reached a six-year high on Friday, June 21, hitting $1,410 at its peak as investors sought a safe haven in amid troubled global waters and announcements by the European Central Bank and the Federal Reserve saying they are leaving the door open to interest-rate cuts this year. A lower interest rate in combination with a weakening dollar has historically always made gold an interesting investment. Now that bonds are yielding less, equities seem to have reached an apex and raw materials and currencies are now worth less, gold has become more attractive.
President Mokgweetsi Masisi is said to have opened negotiations with Lucara Diamond Corp. for the government to buy and own shares in the company, reports The Botswana Gazette. Masisi reportedy met with Lucara CEO Eira Thomas at JCK Las Vegas, telling the newspaper, “I have proposed for Lucara to allow government to invest in the company,” adding that he will discuss with his cabinet and relevant authorities to agree on investing in Lucara.
Diamond mining stocks have taken a beating in recent years, with most believing there is no end in sight. Post-financial crisis oversupply and rising concerns about the assumed influence of laboratory-grown diamonds have tested the patience and tainted the sentiment of investors in the diamond arena. But the imminent shrinkage of supply and continuing demand for the product is not imaginary. Those who doubt the resilience of the diamond industry and have given up on its ming sector may regret selling low.
Chinese mining company Anjin is set to resume mining in Zimbabwe at the Chiadzwa mining fields in Marange in May this year, while Russia’s Alrosa will complete setting up its office by the end of next month, reports The Sunday Mail from Zimbabwe. Anjin had to shut operations back in 2015 as the Mugabe administration forced the closure of seven mining companies and the subsequent merger of their assets into the Zimbabwe Consolidated Diamond Company (ZCDC). Now the company is expected to invest an initial US$20 million to restart operations.
UK-based and AIM and BSE listed exploration company Botswana Diamonds plans to raise more than $480,000 (£370,000) from investors, the company said Wednesday.
Lucara Diamond Corp. has announced the appointment of Ayesha Hira as their new Vice President of Corporate Development and Strategy, and has already prompted speculation among analysts in stating her primary responsibilities will be, "investigating strategic growth opportunities including mergers and acquisitions." It is unclear whether the M&A in mind are looking upstream to mines and exploration projects, or downstream to something else entirely.
The Lucapa Diamond Company has announced it has secured major investment backing from a new cornerstone investor and existing shareholders to advance its diamond projects and continue delivering on its growth strategy. The US$12.7 million (A$16.5 million) placement, at no discount to market price, will enable Lucapa to immediately launch an extensive follow-up exploration program, including further drilling, at the Brooking diamond discovery in Western Australia’s West Kimberley region, the company states.
The government of Zimbabwe has removed the local ownership requirement for foreign investment into the country - laid down in the Indigenisation and Economic Empowerment Act - with the exception of the diamond and platinum sectors, Finance Minister Patrick Chinamasa announced in a major policy change by the new administration. President Emmerson Mnangagwa, who has made job creation one of his priorities, had telegraphed his radical policy shift by dropping the indigenisation portfolio when he named his cabinet last week.
The Indian Commodity Exchange (ICEX), a screen-based online derivatives exchange for commodities, went live on August 28. ICEX commenced operations with the launch of Diamond Futures, which will be the world’s first futures exchange in diamonds. It is intended to help Indian polishing companies better hedge price risks. The diamond contracts launched by ICEX initially is in size of 1 carat with compulsory delivery. “Indian manufacturers most require this type of financial product,” said managing director and CEO Sanjit Prasad.
In 2016, ALROSA's investments in underground mines and other core production facilities amounted to RUB 16.5 billion ($2.8 billion) or 60 percent of the company's total capital investments, the diamond miner said in a press release. Over RUB 7 billion ($1.2 billion) was allocated to technical upgrade and replacement of worn-out equipment. The company said it invested a substantial amount – almost RUB 5.5 billion ($930 million) – into the construction of Udachny underground mine.
Pallinghurst resources Ltd., a private equity firm focused on mining, who already own 47% of Gemfields Plc, made an offer to acquire the remaining 53% of the gemstone miner in a bid to restructure the company and make it more profitable. Pallinghurst offered investors nearly two shares in Pallinghurst for each share in the colored-stone producer, valuing the miner at $275.6 million. Gemfields’ board has advised its shareholders to not take any action at the moment while they review the offer.
Angolan diamond mining company ENDIAMA and Russian miner ALROSA announced on Tuesday in Luanda their intention to conduct studies to promote additional investments in the exploitation of kimberlites in Angola. The announcements came from the chairmen of ENDIAMA, António Carlos Sambula, and ALROSA, Sergei Ivanov at the end of an audience with the Angolan Vice-president, Manuel Domingos Vicente. Sergei Ivanov said business with Angola is flourishing and data indicates that 2016 was better than previous year, with net profits of US$137 million, as well as better quality of extracted diamonds.
Anglo American Plc’s billionaire shareholder, Anil Agarwal, said he had no intention of behaving like an activist investor following his $2.5 billion investment for a 13% stake earlier this month. He continued by staying he had no plan to buy Anglo’s assets in South Africa, or to push for a seat on the board. The investment was made through Agarwal’s holding company, Volcan Investments, rather than Vedanta Resources.
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.
“What we want is to improve the quality of our portfolio. I would love to have more diamonds to be very explicit. That’s a priority area.”
- Rio Tinto Group chief Jean-Sebastien Jacques on wanting to expand and invest in diamond mines rather than divest.
In a news release, VULT - a digital diamond exchange platform whose, "revolutionary technology turns diamonds into a modern asset class: liquid, portable and fully fungible" - announced: "Secured Worldwide, the creators of VULT, a unique diamond investment product, has won the backing of the Underwriters at Lloyd’s of London for VULT’s warranty of the authenticity of every diamond in VULT units sold to consumers by Secure Worldwide.
Commodity investors concerned that gold’s rally will sputter may want to consider another luxury item: diamonds. With odds of a U.S. rate hike creeping higher and long positions in bullion soaring, “it may make even more sense to look at a next-best commodity exposure such as diamonds, where there has been limited investor flow and presumably less downside in case the bear case unfolds,” Citigroup Inc. analysts including Barry Ehrlich said in a note. The bank recommends shares of Alrosa, the world’s largest rough-diamond producer.
Rio Tinto has revealedl the world’s first coin to feature a rare red diamond from the Argyle Diamond Mine. Known as The Kimberley Treasure and for sale at AU$1 million (US$760,000), the incredible collectable has been crafted from one kilogram of 99.99% fine gold, and features a radiant cut 0.54 carat red diamond unearthed from Rio Tinto’s Argyle Diamond Mine in the east Kimberley region of Western Australia. The Kimberley Treasure is issued as legal tender under the Australian Currency Act 1965.
The goal is to change the perception that a diamond is a financial expenditure and to facilitate the perception of a diamond as an asset ... With the increase in synthetic diamonds, which when placed in jewelry are no less beautiful than natural diamonds, we must highlight the financial value of natural diamonds. I believe that synthetic diamonds are here to stay but their existence and usage in the jewelry industry can only boost the notion of natural diamonds as an asset with potential wealth preservation value.
Russian diamond mining company Alrosa is in talks with the Moscow Exchange to offer investors there the chance to invest in up to $1 billion worth of diamonds, news agency RBK reported on Friday. Sputnik International reports that while rare stones such as blue diamonds are subject to sharp changes in their valuation, other diamonds could offer a more stable investment than precious metals, as their value tends to fluctuate by less than five percent a year.
The Ministry for Development of Russian Far East has announced that ALROSA has received government approval for an investment project to establish a diamond mining operation based on the Verkhne-Munskoye Diamond Field, reports Rough&Polished. The investment project has been implemented starting from 2015 and the planned amount of private investments is set at RUB 62.98 billion (nearly $1 billion).
Customers and staff of a company called Asia Fine Diamonds (AFD) are up in arms after the so-called investment firm went out of business owing money, Singapore's Straits Times newspaper reported. A report cites a client, Stephen Yeo, who invested $17,785 in a 0.21-carat round cut diamond - described as "fancy intense purplish pink" - from AFD. He never laid hands on it. Meanwhile, an AFD employee said that about 20 sales, telemarketing and administrative staff have not been paid for about two months, with the office closing down in January.
After three years in which the price of gold declined, the yellow metal saw a resurgence in 2016, and that is continuing this year so far.
Investors in the mining sector will soon be required to provide proof of funds for exploration before they are granted mining claims, Mines and Mining Development Minister Walter Chidhakwa said. This comes after the realisation that some investors have not been conducting exploration on their concessions, but rather holding the blocks for speculation. “If Government is to give mining concessions, the investor must first put exploration money.
Despite the economic conditions we’re all facing, I remain convinced that the extractives industry in Africa can serve as a powerful catalyst for broad-based economic transformation and long-term growth. But, the current economic reality must be recognized. Commodity prices are at decade lows, global investment in mining projects is slowing, and everyone is becoming more risk adverse.
In his latest opinion piece, award winning JCK News Director Rob Bates expresses his concern over the latest example of so-called "activist investors" nudging their way into companies.
Bloomberg Business writes that Anglo American has led a collapse in mining stocks to the lowest level in more than a decade as market turmoil in China, the biggest consumer of metals, ignites a vicious spiral of tumbling equities and tumbling commodity prices around the world. The Bloomberg World Mining Index sank as much as 4.1% on 7 Jan., with Anglo sliding 12% at one point to a record low and Glencore down as much as 7.9% in London trading.
After posting a third successive year of declines in 2015, gold is pushing higher boosted by a host of troubles. Jewelry manufacturers will be keeping a close eye on developments as they seek to plan jewelry lines going forward. Gold bullion has been heading for the $1,100 an ounce level in recent days and rising to a two-month high after Chinese shares plunged, the yuan was devalued and the country’s stock exchanges closed early for the second time this week, spurring safe haven demand.
Angola produced a record 8,837,414 million carats of diamonds with a value of more than $1.1 billion last year, Geology and Mining Minister Francisco Queiros was cited as saying by allafrica.com. Although Angola's diamond output was higher than the 8,750,892 carats mined in 2014, its revenue was lower than the $1.31 billion figure for 2014. Most of the country's diamond output is of industrial quality stones. Queiros said his ministry awarded six licenses for diamond production in 2015.
India and Russia will look to utilise PM Narendra Modi's upcoming visit to Moscow to strengthen ties beyond defence with the creation of a joint innovation fund, in addition to prospective investments from Russia in the National Infrastructure Fund and expanding bilateral trade basket beyond diamonds and pharmacy. Officials said a joint $3-billion fund to promote startups in the nanotechnology field could be concretised during the PM's visit.
Investing despite the mining recession, Namdeb (Namibia Diamond Corporation) is utilizing the mining logistics solution provided by Crossroads Namibia, which is designed to contain costs, reduce risks, improve supply chain logistics and enhance safety. Namdeb is a wholly owned subsidiary of Namdeb Holdings, which is co-owned by the government of the Republic of Namibia and De Beers. Its main land-based operations are in Oranjemund. Mining Review writes that, "Namdeb is known for innovation, particularly in terms of its mining techniques, as well as a strong emphasis on safety.
A pair of former miners - Cameron McLean and Joe Treacy - are hoping to launch a crowdfunding website in Australia for small mining companies that are struggling to raise capital via traditional outlets as lenders turn their back on the sector. Small miners and explorers have been deprived of the method in Australia due to fact that using crowdfunding to raise equity is prohibited under the nation's Corporations Act. The founders of Mineral Intelligence Pty, however, are counting on this to change by the end of the year under pro-business initiatives being considered by lawmakers.
Jim Cramer, from CNBC's "Mad Money", recommends acquiring stock in Signet, the largest specialty jewelry chain in the U.S., Canada and the U.K, which "most people have never heard of." Cramer asks what caused a "little-known stock like Signet Jewelers to have such an impressive run", to the point where it is "crushing its competition." Firstly, "a big part of Signet's success goes back to its smart acquisition of Zales last year for $1.4 billion." They paid a 41% premium, but "it turns out that Signet got an amazing price, and Cramer thinks this is only the beginning of the potential value
Dropping diamond prices caused by lower growth in Chinese jewelry demand is reducing the appeal of Canada's Arctic diamond industry, with falling exploration budgets hitting 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.
In an opinion piece, human rights activist and Director of the Centre for Resource Governance Farai Maguwu warns Vice-President Emmerson Mnangagwa, who recently visited China and plans to visit Europe shortly, seeking foreign investment and development assistance funds. Maguwu claims Mnagagwa, who is named as potential successor of current Zimbabwe President Mugabe, was highly involved in the entry of Anjin Investment in the Marange diamond fields, a deal that turned out to be highly disadvantageous for the country, Maguwu says.