In his latest blog, industry analyst Edahn Golan details how Israeli banks are further cutting financing to the Israeli diamond industry. In 2020, diamond financing in the country fell below $500 million for the first time in 30 years, marking a 33% decrease. Shrinking activity is one of the obvious reasons but complicated admin due to money laundering-related regulations specific to the diamond industry seems to be a burden to most banks. It seems they don’t consider it worth their while anymore.
ABN AMRO, the Dutch bank, is closing its Hong Kong diamond business as part of a global trimming of the bank's operations, predominantly outside of Europe. In 2018, ABN AMRO already shut down its US and Dubai diamond operations. A few months ago, the bank reported a net loss of 395 million euros, the first loss in years, and announced it would be reviewing its strategy.
Revenue from India’s diamond polishing industry is set to plunge to its lowest level in a decade as COVID-19 measures in the U.S. and Europe (Belgium) has hindered sales and caused prices to fall, reports an India credit-rating agency. The agency projects sales in fiscal 2021 (April 2t020 - March 2021) to drop to the lowest level in a decade, $13-15 billion, which is 21%-32% lower than the estimated ~$19 billion in fiscal 2020 revenues and 38%-46% lower than the $24 billion earned in fiscal 2019.
ABN AMRO has announced support measures for clients in response to the impact of the coronavirus. The support extends to some 55,000 Commercial Banking clients with a credit facility of up to 2.5 million euros, for whom the payment of interest and principal will be automatically deferred for six months. While the announcement does not mention diamond industry clients, their inclusion seems implied.
India's representative body for the diamond and gem trade, the Gem & Jewellery Export Promotion Council (GJEPC), has appealed to the Government of India and the Reserve Bank of India to revise credit terms for exporters and importers in the gems and jewelry trade which has been badly affected by the Hong Kong protests last year and the subsequent recent novel coronavirus outbreak.
With its share price last topping $1.00 on October 28, 2019, Canadian miner Mountain Province Diamonds (MPD) has notified the Nasdaq Stock Market of its intention to voluntarily delist its common shares from the Nasdaq Stock Exchange (NASDAQ). MPD's shares will continue to trade on the Toronto Stock Exchange (TSX) after the NASDAQ delisting becomes effective on or around February 11. The miner had already indicated last August that delisting was imminent.
In what could turn out to be a pivotal development in rough diamond financing for Alrosa's long-term clients, Antwerp-based international company Dali Diamond has signed a loan agreement with Eximbank of Russia (part of the Russian Export Center Group) for the financing of rough diamond purchases from Alrosa. Financing for the purchase of rough diamonds has been a major concern in recent years as several banks have reduced their exposure to the diamond market or withdrawn from it altogether.
Russian diamond miner Alrosa's Shareholders have decided to pay dividends for the first half of 2019 in the amount of 28.3 billion rubles ($434 million) or 3.84 rubles ($0.059) per share. Therefore, the company will allocate 100% of its free cash flow for the corresponding period to pay out dividends, the miner has stated in a press release. The six months dividend yield will be at around 5%.
Warning - gory financial details ahead
An American court has granted Russian miner Alrosa's request for the discovery of documents from banks active in New York over alleged embezzlement of funds from its Angolan diamond mine Catoca, Africa Intelligence reports. As reported last May, Alrosa believes that the former and current management of Angolan diamond mine Catoca - in which Alrosa holds a 41% stake - is responsible for secreting away nearly $10 million, and called upon a U.S.
Struggling Canadian miner Stornoway Diamonds, which has been particulary impacted by the 2019 market downturn, has announced two moves that should provide the financing and liquidity required to ensure the Renard Mine will continue to operate while the company undergoes restructuring. Stornoway Diamonds Corp. and its subsidiaries Stornoway Diamonds (Canada) Inc. (SDCI), Ashton Mining of Canada Inc. (Ashton), and FCDC Sales and Marketing Inc.
Signet Jewelers Limited claims to be the world's largest retailer of diamond jewelry and is clearly the largest specialty retail jeweler in the US, UK and Canada. It operates over 3,300 stores primarily under the name brands of Kay Jewelers, Zales, Jared The Galleria Of Jewelry, H.Samuel, Ernest Jones, Peoples, Piercing Pagoda, and JamesAllen.com. Just over a year ago the company was among the S&P 500, but its share price and market cap have fallen hard.
Two years after becoming the biggest shareholder of the firm that owns De Beers diamonds, metals tycoon Anil Agarwal announced an exit from Anglo American by divesting his near 20 percent stake. Agarwal, the founder and controlling shareholder in Indian resource giant Vedanta Resources Plc., in March 2017 paid $2.5 billion for a 12.43 percent stake in Anglo American, and then bought a second tranche in September 2017, bringing his stake in the mining group to 19.3 percent. The bonds were to mature next year but Agarwal decided to exercise a call option and take profits on his investment.
ABN Amro sent a letter to several of its diamond clients stating that it would be limiting finance for rough purchases "in view of the continued lack of profitability in the purchase of rough goods." The letter, which was obtained by JCK and IDEXonline, was sent last week from an Antwerp branch of the Dutch bank to a number of its clients declaring a moratorium on rough loans, pointing implicitly to the industry's reckless behavior in writing, "We recommend you to show constraint [sic] and only consider purchasing rough when there is sufficient profitability." In other words, the b
Firestone Diamonds today announced its 75%-owned subsidiary Liqhobong Mining Development has received a waiver from ABSA Bank for certain of its covenants measured as at 30 June 2019 in terms of the $82.4 million facility agreement, with the support of its bondholders. The next measurement date will be 30 June 2020.
Russia diamond-mining giant Alrosa's shareholders at their Annual General Meeting decided to allocate 100% of free cash flow for the second half of 2018 to the period-end dividend – 30.3 billion rubles, or approximately $480 million. Taking into account the nearly $692 million (43.7 billion rubles) in dividends the company paid for the first half-year of 2018 (equaling $0.09 or RUB 5.93 per share), the total dividend for 2018 will amount a record $1.17 billion (RUB 73.9 billion) or $0.16 (RUB 10.04) per share.
Stornoway Diamond Corp., 100% owner and operater of the Renard Diamond Mine in Quebec which began commercial production in January 2017, is in dire financial straits and is looking for new investment in, if not a buyer for the mine and its assets. Stornoway has endured some very turbulent times over the past year and a half, seeing its losses mount as a result of operational difficulties and a highly unfavorable market for its diamonds, and will need to restructure if it is going to continue operations.
Lucapa Diamond Company last week has agreed on funding and refinancing arrangements which will improve its financial position and reduce its financing costs, the company said in an ASX announcement. The move will enable Lucapa to reduce the higher-cost debt used to fund the development of the new high-value Mothae diamond mine in Lesotho.
Diamond-rich Botswana expects mineral revenues in the 2019/20 fiscal year to drop by 4 percent to 13.6 billion pula ($1.26 billion) due to a decline in royalties and dividends, a minerals ministry budget document showed last week. Botswana is heavily dependent on its diamond resources which, according to the World Bank, is responsible for 25% of the country's GDP, approximately 85% of exports earnings and about one-third of the government's revenues.
BlueRock Diamonds, an AIM-listed junior miner which owns and operates the Kareevlei Diamond Mine in the Kimberley region of South Africa, has recovered its largest diamond to date: a 16.28 carat gem-quality stone. It is 4.58 carats larger than the next largest diamond the miner has recovered. On Monday, the company announced it has raised an aggregate of £575,000 ($740,000) through a placement.
Botswana Finance LLC, a subsidiary of Lazare Kaplan International (LKI) has signed a $125 million loan guaranty with Stanbic Bank Botswana, a member of Standard Bank Group and the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution. The loan guaranty will encourage and support lending to diamond manufacturers and polishing companies while allowing the organizations to share credit risk.
Last week, the Antwerp World Diamond Centre (AWDC) and the University of Antwerp hosted an “Innovation and Diamonds” conference at the Antwerpsche Diamantkring - the only rough diamond bourse in the world - featuring internationally-recognized experts from across the spectrum of the diamond trade, including alternative financing, the impact of digital on the luxury segment, the feasibility of small-scale ethical mining, as well as the earthquake and aftershocks of De Beers’ foray into lab-grown diamonds: LightBox.
Russian diamond mining giant ALROSA has tested a new payment mechanism enabling foreign clients to purchase rough stones using Russian currency. As an experiment, transactions were conducted with clients from China and India, and if necessary, the company is prepared to use this payment scheme in rubles in the future.
The 10% decline in bank finance to the gem and jewelry sector over the last few months will adversely impact exports from the industry during the year, the Gem & Jewellery Export Promotion Council (GJEPC) said in a statement yesterday.
Signet Jewelers yesterday announced the completion of the final phase of its strategic outsourcing of credit through the sale of its existing non-prime receivables, for which the group received $445.5 million in cash proceeds.
ABN Amro, the largest and longstanding financier to the diamond and jewelry industry, is closing its lending offices in New York and Dubai as it continues to cut back on financing to the trade as a whole. Brigitte Seegers, a spokeswoman for the Dutch bank, initially announced the move during a first quarter earnings call last week, which will leave Antwerp and Hong Kong as the bank's last divisions standing.
The latest fallout from the Nirav Modi-Gitanjali scandal that has rocked India's diamond and jewelry sector comes in the form of the State Bank of India's (SBI) decision to tighten the collateral demands on borrowers from the industry. India’s largest lender has told borrowers in the gems and jewelry sector to either bring in more collateral to back their existing loans or reduce the size of them in a timely manner.
With the country’s leading public sector banks facing massive financial turmoil following the fraud cases featuring billionaire Nirav Modi and Mehul Choksi, now estimated to involve approximately $2 billion, diamond mining companies may ultimately pay the price as far as sale of rough diamonds to Indian diamond companies is concerned, suggests The Times of India. The TOI turned to independent diamond analyst Paul Zimnisky for insight: “There are two primary concerns as a result of the Modi and Choksi episode.
The Bank of Israel has agreed to open a $285 million (Nis 1 billion) credit line to diamond traders in the form of government-backed loans in response to calls from the industry to alleviate a credit crunch that is hurting their competitiveness.
Moda Operandi, the American online luxury retailer originally founded in 2011 as a platform to provide consumers access to full collections straight from the runway, has just received a brand-new influx of cash. Billionaire entrepreneur and executive director of Chow Tai Fook Jewellery Group Adrian Cheng and Apax Digital co-led its latest round of funding, which totals a massive $165 million in growth capital. That number doubles Moda Operandi's total funding, which had reached more than $130 million as of its Series E round in February 2015.
Dominion Diamond Corporation and The Washington Companies yesterday announced the completion of the latter's takeover of the Canadian diamond miner, officially acquiring all of the issued and outstanding common shares of Dominion for US$14.25 per share in cash. In total it amounted to a $1.2 billion acquisition. Dominion will operate as a standalone, private company, and Patrick Evans has been appointed Chief Executive Officer, effective immediately.
Lucapa Diamond last week adopted a new development plan for the high-value Mothae kimberlite diamond project that foresees increases in targeted production, cash flows and mine life. The improvements to targeted production and cash flows include: a 22% increase in diamond production to 498k carats, a 30% increase in kimberlite material mined to 25 million tons and a 12% increase in mine life to 13.5 years.
With the Antwerp diamond industry facing a host of challenges, and developing multiple initiatives, when it comes to financing, it appears that one bank recognizes an opportunity. Avi Krawitz of Rapaport News today reported that the National Bank of Fujairah (NBF) from the United Arab Emirates (UAE) is planning to open a representative office in Antwerp. Davy Blommaert, head of diamond lending at NBF, told Rapaport News on the sidelines of the Dubai Diamond Conference, “I’ve been pushing for the move for a long time because there’s an opportunity to cherry-pick some clients.”
Dominion Diamond Corporation yesterday announced that its, "Shareholders overwhelmingly approved the previously-announced plan of arrangement pursuant to which Northwest Acquisitions ULC, an entity affiliated with The Washington Companies, has agreed to acquire all of the issued and outstanding common shares of the Company for US$14.25 per share in cash." In other words, shareholders are expected to receive $14.25 US per share in cash when the acquisition closes. The aquisition arrangement is worth a total of US$1.2 billion.
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 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.
Botswana Diamonds has raised $1.13 million (£868,000) from directors and existing subscribers with funds to be used to progress its flagship Vutomi project in Frischgewaagt, South Africa, to inferred resources status and to continue its exploration activities. The funds were raised through the placing of 79,484,300 new ordinary shares. Botswana issued 31,244,300 ordinary shares of 0.25p each at the exercise price of 0.85 pence per new share for a total of £265,576 ($346,000).
As anticipated, while Petra Diamonds achieved record levels of production and sales in FY 2017, with production up 8% to 4.0 Mcts (FY 2016: 3.7 Mcts) and revenue up 11% to US$477.0 million (FY 2016: US$430.9 million), investors remain worried as the company missed its production and revenue guidance by 8-9% due to the slower than anticipated build-up of its expansion programs across its operations. Furthermore, the company pushed back its production guidance and unveiled higher than expected spending and debt, causing its share price to tumble.
Canada's Dominion Diamond Corp., the world's third-largest diamond producer by market value with a controlling interest in the Ekati Mine and 40% owner of the Diavik Mine in Canada’s Northwest Territories, is in advanced and friendly talks with The Washington Companies on a sweetened cash takeover bid, sources told Reuters this week. Susan Taylor and John Tilak write that Negotiations are focused on the two sides settling on a price, said the sources, who declined to speak publicly on the matter. A deal could be announced within weeks, they said.
At its Annual General Meeting of Shareholders, Russian diamond miner PJSC ALROSA approved the company’s annual report and financial statements and recommended a total dividend to be paid of $1.1 billion (RUB 65.769 billion) or $0.15 (RUB 8.93) per ordinary share of 50 kopecks par value ($0.008). According to the IFRS Consolidated Financial Statements of ALROSA and its subsidiaries, in 2016 the net profit (less profit attributable to non-controlling interest) amounted to $2.21 billion (RUB 131.391 billion). Fifty percent of this amount will be paid as dividend.
South African equity group Pallinghurst Resources Ltd. on June 26 announced it has received 96% of shareholder support in its quest to move ahead with a bid to fully acquire Gemfields, in which it is already the largest investor; more than 75% of Gemfields shareholders have given their acceptance for the offer. Last week, Pallinghurst lowered the minimum number of acceptances from shareholders of Gemfields Plc on its takeover offer to 60 percent, from 75 percent, making its offer unconditional. This move came after China's Fosun International raised its offer for the gemstone company.