In an exclusive interview with Rough & Polished, analyst Paul Zimnisky discusses a wide range of issues, from diamond production volume and prices to oversupply and mid-stream purchasing trends, profit margins, consumer demand and synthetic diamonds. A few key takeaways:
It sounds much more dramatic than it is, but CBC News reports that De Beers Canada may flood the underground workings of its shuttered Snap Lake diamond mine 220 kilometres northeast of Yellowknife. The company, which is currently suspending operations at the unprofitable mine as a step towards placing the site on care and maintenance, said it will file an extended care and maintenance plan, which will include flooding the mine's underground tunnels (which come with inherent and costly water problems).
Reuters reports that Russian President Vladimir Putin may be looking to sell some of the country's largest companies, including the world's largest diamond miner, ALROSA. Russian oligarchs are the most likely potential buyers of the stakes, but in contrast to Putin's 2014 insistance that public offerings of Russian state companies be done on the Moscow Exchange - ruling out more liquid, deeper markets in Hong Kong, London, and New York, limiting access to Western investors - the Kremlin said that foreign investors were welcome to participate in the privatization, which has been dri
Rough diamond analyst Paul Zimnisky takes a comprehensive look at the current and projected output for the entirety of the diamond mining industry, concluding that "2016 global diamond production by-volume is forecast to be 137 million (M) carats, or +1.3% over 2015 estimates," despite efforts by De Beers and Rio Tinto to limit global diamond supply. Stable Russian production, new mines, and production increases by Dominion Diamond Corp and Petra Diamonds in particular, he writes, will serve to offset these efforts.
In an unusual step, Zimbabwe says that it will make the Chinese yuan legal tender in the country after Beijing agreed to cancel $40 million in debts. Finance Minister Patrick Chinamasa said the move comes as Zimbabwe seeks to increase trade with Beijing, and usage of the yuan “will be a function of trade between China and Zimbabwe and acceptability with customers in Zimbabwe." China is Zimbabwe’s biggest trading partner following Zimbabwe’s isolation by former western trading partners due to Harare’s human rights record.
Analyst Paul Zimnisky analyses fundamental supply/demand developments in 2015 and surmises that the diamond industry will see a balancing out of goods to market and demand by the middle of next year, as inventories drop while manufacturers have cut back on production. He notes that while a moderate net decrease in Chinese demand for diamond jewelry is expected this year, "it is important to remember that demand is still relatively stable ...
In an interview with Mining Weekly Online addressing the current state of affairs and future outlook throughout the diamond industry, analyst and consultant Paul Zimnisky says he believes Canada was the best-positioned country in the industry given the quality of the current projects. “Looking at the NWT’s Ekati and Diavik mines, for instance, they are still quite profitable projects, even in a weaker price environment.
Diamond industry analyst Paul Zimnisky has published a thorough "State of the Diamond Mining Industry" report as we near the end of 2015 - essential reading, in our opinion. "So far in 2015", writes Zimnisky, "the state of the global has been closely aligned with the posture of the global economy, as it so often is, and should be. The developed nations of the world are growing, but at uninspiring rates... Emerging market growth has slowed... The result in the diamond industry has been an overhang of low-to-medium-quality polished diamonds in the market for about a year now. U.S.
The International Monetary Fund (IMF) might restart its program of financial assistance to support Zimbabwe’s economic reform efforts as early as 2016 if foreign creditors accept the government's plans to clear debts to international financial institutions. IMF resident representative Christian Beddies said financial aid could resume once Zimbabwe fulfilled certain required processes “Basically, the Zimbabwe authorities are trying to garner support for their strategy to clear arrears to the IMF and other international financial institutions.
According to the Zimnisky Global Rough Diamond Price Index, rough prices have hit a four-year low, dropping 3.39% last week. The quarter-over-quarter change sits at -6.15% and for 2015 as a whole, prices are currently down -13.22%.
The Natural Color Diamond Association (NCDIA) and the Jewelers Vigilance Committee (JVC) held a seminar in New York City to answer queries about how to buy green diamonds from Zimbabwe without being in contravention of American law.
While most discussions on synthetic diamonds are about identification and disclosure, Paul Zimnisky, industry analyst, believes the main question should be what the future of the synthetic diamond industry looks like in terms of market share. He concludes that currently, due to the cost prohibive nature of the technology, gem quality synthetics represent only 1-2% of the global diamond market, mainly driven by environmentally and ethically conscious consumers and millenials that are attracted by the 'futurology' appeal of the product.
Through Q1 2015 diamond industry more stable but pressures remain.
Paul Zimnisky - Diamond Industry Analyst on the state of the diamond industry