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94 posts from December 2004

Angola Diamond Exports $800 Million in 2004

Diamond-rich Angola exported about 7 million carats of diamonds worth almost $800 million, according to junior Mines Minister Mankenda Amboise.

As with many diamond producer countries, it is difficult to reach an accurate figure for Angolan production, due to widespread smuggling.

Industry analyst Chaim Even-Zohar estimated Angola's 2003 diamond production at $900 million.

In addition to Amboise's remark that revenues fell 3.1 percent on the year, Mining Minister Manuel Africano last month said Angola was losing $1 million a day, or $360 million per annum, due to diamond smuggling.

Amboise said that while diamond output had edged up by 0.04 percent from 2003, revenues fell 3.1 percent.


Chinese women welcome the shine of the times

Diamonds are not new to the mainland, though the Diamond Trading Company (DTC) entered the mainland market as late as 1993. But even in these short 11 years, the company has made long strides, says Christina Hudson, Greater China marketing director of DTC Asia Pacific Limited in Hong Kong.

Hudson, a marketing veteran who has also worked with brands such as Nike and Nestle in Greater China, is relishing the success of Forevermark, a recent DTC product campaign, launched in Hong Kong in late August, that has shone bright on diamond lovers. DTC incidentally is the sales and marketing arm of the De Beers group of companies, the largest diamond seller in the world.

Hudson says: "Forevermark is a mark of trust from DTC, with a serial number inscribed on each diamond guaranteeing that experts have carefully tested them at every stage of their journey, from the heart of the earth to the body of the consumer."

This symbol of trust is also an embodiment of the company's core values: integrity, trust and passion.

"The passion that we are able to invoke in the customer is very important, and our products must offer peace of mind in that it is a promise of quality."

From a marketing perspective, DTC is an information provider. On one hand, it helps the industry create new ideas and products to meet consumers' changing needs, on the other, it offers buyers advice on how to get the best.

DTC wants to boost the growth of the Hong Kong diamond jewellery market for which it'll employ skilled personnel and train potential professionals. Building a communication channel between the consumer and the supplier is one of its prime objectives.

It has been an uphill task for DTC to try and create a diamond market on the Chinese mainland during the past decade. Says Hudson: "In 1993 when DTC began its marketing initiatives on the mainland, there was no emotional significance attached to diamond gifts and no link existed between diamonds and love. The practice of gifting jewellery and its emotional value was lost."

During the "cultural revolution" (1966-1976), trading in and gifting jewellery were banned on the mainland. The practice revived only in the 1980s as China implemented its reform and opening-up policies. And within a short time, "TV commercials and marketing campaigns" by companies such as the DTC helped create "a different cultural imperative in China, with diamond gifts representing a mystique love for women."

Within that short a span, the Chinese market has become worth over US$11 billion, though only 10 per cent of the mainland's population, compared to 60 per cent in Hong Kong, are actual diamond buyers.

Surprisingly, women buying diamonds for themselves make up two-thirds of the total consumers on the mainland. Says Hudson: "Women in China are not afraid to buy diamonds to make a personal statement, be it to attract the opposite sex, or to declare their social status."

This, says the DTC marketing boss, is a very good sign, for it proves that Chinese women are "ready consumers" for diamonds. This has prompted the company to target an emerging elite group of customers. "China is a priority market for DTC, and we expect double digit growth in the coming years. DTC is developing marketing strategies that will cater to an elite group of women, as the first signs of an upper-class clientele emerge in China," Hudson says.

DTC works with an advertising agency and a public relations team on the mainland. It backs up its marketing campaigns with a strong research culture. "The Chinese market is very receptive to our marketing initiatives and efforts to inform consumers in China have borne the desired fruits, for they have matured quickly," is how Hudson describes her China experience.

DTC's priority markets include Italy, Japan, the Gulf, India and the United States. The global sales of diamond jewellery in 2003 increased by nearly 7 per cent, with growth largely driven by the American market. While sales in all the regions rose, the 4 per cent growth in Asia Pacific was driven largely by the Chinese market.

So, what is DTC's plans for 2005? Optimistic, says Hudson. "Christmas is a busy and exciting time for us, as it is for the people of Hong Kong, who pick up about 40 per cent of their total purchase during this period. On the other hand, the mainland records its highest sales during the Chinese New Year and Golden Week holidays."

Hudson concludes with a tribute to Hong Kong and mainland consumers: "The Hong Kong market is mature, and we expect the strength of the diamond industry to be bolstered by an improved economy; while the mainland market offers great potential and we expect growth for many years to come."


Race Car Diamonds

As 2004 roars to a close, it's a proper time to look at the best and the worst -- and all other wacky news -- from the past Formula One season.

This first one won't surprise you, but stick with us and maybe you'll find something you don't agree with:

Best driver: Michael Schumacher. A record 13 wins and yet another Drivers World Championship (seven if you're still counting, including five in a row).

Best race: The Belgian Grand Prix. Six different leaders. Action from start to finish. Kimi Raikkonen and West McLaren Mercedes defeat Michael Schumacher and Ferrari.

Best race II: The Brazilian Grand Prix. Future teammates Raikkonen and Juan Pablo Montoya fight tooth and nail for the lead, including going down pit lane side-by-side, and Montoya eventually narrowly defeats Raikkonen.

Worst race: Hungarian Grand Prix. M. Schumacher leads every lap. The order of the top six is the same on lap two as it is (with the exception of a couple of retirements) at the end of the dreary 70-lap event. Yawn.

Car of the year: The Ferrari F2004 simply demolished the opposition.

Most disappointing car: The McLaren Mercedes MP4-19 was a flop. Given that it was a development of the MP4-18, which tested for much of 2003 but never raced, it's difficult to perceive how the MP4-19 could be so bad.

Most improved car: The McLaren Mercedes MP4-19B, which was under development even before the MP4-19 races, proves to be a frontrunner soon after it makes its debut in July. McLaren goes from laughingstock to race winners.

Most revealing offer of the year: Bob McKenzie, the F1 reporter for a London newspaper, says early in the season that if McLaren wins a Grand Prix, he will run naked around the Silverstone circuit. McLaren eventually pulls off a win. McLaren boss Ron Dennis graciously says that McKenzie does not have to be completely naked on his lap -- he is allowed to wear running shoes.

Coolest looking car: The Williams BMW FW26 with its "hammerhead shark" nose and front wing makes it stand out among the other F1 car clones. Sadly, the concept doesn't work out and Williams reverts to a more conventional nose and front wing.

Worst news of the season: Having been involved since 1967, Ford announces that it is pulling out of F1 and selling Jaguar Racing and Cosworth Racing.

Best news of the season: Both Jaguar and Cosworth are saved as Red Bull and Kevin Kalkoven, respectively, step in and buy them.

Best fan deal: The pit lane walkabout for race day ticket holders for the United States Grand Prix at Indianapolis continues to be a huge fan draw with nearly 20,000 showing up for pit lane access, a view of the cars, driver autographs and other festivities on the Thursday before the race.

Most improved team: Lucky Strike BAR Honda, which had only two podium finishes in its first five years of existence, racks up 11 podiums in 2004 and finishes second in the Constructors Championship.

Strangest move: David Richards, who oversaw BAR's transformation, is released early from his contract and won't be around in 2005.

Biggest surprise: Jenson Button makes shock waves when he dumps BAR Honda to go to Williams in 2005. The ensuing "Buttongate" gives the media plenty to report on and makes lawyers rich. An arbitration board eventually rules that Button must stay with BAR.

Dumbest stunt: As part of a promotion for a diamond company, diamonds worth $250,000 each are embedded in the noses of the two Jaguars for the Monaco Grand Prix. Christian Klien crashes and the diamond pops out never to be seen again. Nobody steps forward to trade in the diamond for the $45,000 X-Type Jaguar offered as a reward.

Best stunt: As part of a promotion for the film Ocean's 12, Jaguar gets Hollywood hunks George Clooney, Brad Pitt and Matt Damon to come to the Monaco Grand Prix and pose for photos with the team.

Most unwelcome welcome: Chinese authorities refuse to grant entry visas to the F1 press corp until just a few weeks before the inaugural Chinese Grand Prix in Shanghai.

Team of the year: Ferrari. The team consists of a lot more than Schumacher and a good chassis, and the depth and stability of the entire staff helps Ferrari dominate in 2004 after struggling, by their standards, in 2003.

Rookie of the year: Young Austrian Christian Klien is thrown into the deep end as Mark Webber's teammate at Jaguar Cosworth. Klien gains confidence in every race -- the diamond mishap notwithstanding -- and finishes sixth in Belgium.

Nastiest security forces of year: Belgian cops forcibly remove accredited photographers from an approved area at the Spa circuit, threaten to handcuff them, and, in a separate incident, point a gun at a photographer. Still, that was not as bad as an incident at the same circuit some 15 years earlier when the cops swung batons to move the photographers from an approved area.

Passing moves of the year: Button lines up in 13th place for the German Grand Prix in his BAR Honda, storms up through the field, has several intense duels with Fernando Alonso in the Mild Seven Renault, leads the race three different times during the pit stop sequences, and ends up second in what he calls "the best race of my F1 career."

Messiest race of the year: For the seemingly perfect Michael Schumacher that is: Shanghai's surprise. He starts from pit lane after a spin and engine woes in qualifying. In the race, he has an accident, a spin and a flat tire at different times and finishes 12th. It's the first time since the season opener in Australia in 1999 that he is running at the end of a Grand Prix but is not in the points.

Summit of the year: The F1 team bosses, who normally can't seem to agree on what day of the week it is, meet at the Brazilian Grand Prix. Nine of the 10 teams agree on drastic measures to cut costs including reducing testing. Ferrari refuses to play, but the fact that nine very disparate team owners agree to agree is a massive step forward for the future of F1.

Most changed driver: After a year away from F1, Jacques Villeneuve returns a much happier, relaxed, mellower and accommodating individual.

Worst oversight of the season: Williams and Toyota mistakenly install the wrong front brake cooling ducts to their cars for the Canadian Grand Prix. It results in Williams drivers Ralf Schumacher and Montoya being disqualified from second and fifth and Toyota drivers Cristiano da Matta and Olivier Panis getting disqualified from eighth and 10th.

Luckiest points of the season: Jordan Ford stand-in Timo Glock inherits 7th place after the four disqualifications in Canada.

Weirdest accident: Two flatbed railway cars break loose in a Budapest rail yard, roll down the tracks and reach speeds of 80 mph before flying off the tracks and through the front window of an auto dealership owned by the father of Minardi driver Zsolt Baumgartner. Two people are injured and five new cars are destroyed in the accident.

Worst-kept secret: Ralf Schumacher signs for Toyota.


CHINA DIAMOND CORP. RECOVERS 9,726 DIAMONDS FROM 701 MINE IN NOVEMBER

Ontario-based China Diamond Corporation recovered 9,716 carats greater than 1 millimeters in size from 13,271 tons processed from the 701 Changma Diamond Mine, its principal mining operation located in Shandong Province in the People’s Republic of China, for the month ending late November 2004 .

As a result of an investigation of the potential of the mine, China Diamond has developed and initiated a capital development program at the mine with the goal of increasing diamond production and value. The mine plan addresses several critical aspects of the operation, including production rate, diamond recovery, security, diamond fragmentation, diamond marketing and sales and operating costs.

First, the development plan includes the installation of a Dense Medium Separator (DMS) and an X-ray Sorter, along with modifications to the current process flowsheet that will improve diamond recovery, increase production rate, provide better security in a ‘closed system’, and reduce diamond fragmentation.

Secondly, China Diamond will be injecting working capital into the mine, thus providing an opportunity to optimize the diamond parcel size for marketing and sales and providing sufficient time to find buyers on the world market. This will enable the mine to achieve the best possible value for the diamond production. The planned development program will result in an increase in production of approximately 200,000 tons per annum, or approximately 155,000 carats per annum (>1mm diamonds).

The planned capital development totals US$3.3 million over the next three years that consists of US$1.4 million for the procurement and installation of DMS and X-ray sorter, modifications to the current process facility, underground development and working capital in 2005, US$1.5 million for underground development that will be required to support the planned increased production rate in 2006 and US$400,000 for underground development in 2007.

“The company is very pleased with the results of the improvements we have implemented at the Mine in 2004, as evidenced by the record production of diamonds. However, the company, and our Chinese Joint Venture Partner, have now developed and initiated a mine plan that will better realize the full potential of the Mine through increased production, better diamond recovery, less diamond fragmentation and better security,” says Mike Michaud, President of China Diamond.


DIAMONDS ARE A BIG HOLIDAY HIT AT AMAZON.COM

Amazon.com, Inc. has finished its busiest holiday season ever during which time it set a single-day record with more than 2.8 million units ordered, or 32 items per second, worldwide.

The company reports that holidays sales of diamonds of all sizes were popular in earrings, pendants and bracelets. The Jewelry & Watches store sold more than one watch per minute since November 25. Other top selling jewelry items include Paris Hilton's Sterling Silver and Swarovski Crystal Heart Pendant on a Satin Cord, Paris Hilton's Sterling Silver and Swarovski Crystal Star Hoop Earrings, and a Floating Heart Pendant with Diamond.

“We are extremely grateful to our customers. On behalf of Amazon.com employees around the globe, we wish everyone happy holidays and best wishes for the coming year,” says Jeff Bezos, Founder and Chief Executive Officer of Amazon.com, which runs 7 global websites.


India shining... the diamond way

If you ever thought that the Indian diamond industry was in a nascent stage, well you might be bedazzled to know that the industry is progressing by leaps and bounds.

This was the statement echoed unanimously by the organizers and exhibitors alike at Timeless Jewels 2004, India's largest jewellery exhibition held at Hotel Taj Palace, Dhaula Kuan.

Traditionally in the Indian mindset, Gold has been seen as the most worthwhile investment, but now with disposable incomes being the order of the day, there is a visible change in consumer jewellery buying preferences.

Anish, an exhibitor at the event, said "Gold is slowly losing its charm, for one doesn't get variety in gold."

Amit Doshi, the sales and marketing manager of Ace Jewels, said, "Gold is the base for diamond jewellery. The trend is changing from plain gold to diamond studded gold jewellery."

The Gem and Jewellery Export Promotion Council, India's apex body for gem and jewellery promotion has announced the increase of gem and jewellery exports by 31 percent in dollar terms and 24 percent in rupee terms in 2003-2004.

The major contributor has been the diamond sector, which has recorded a growth of 21.32 percent in dollar terms and 15.30 percent in rupee terms.

"India is emerging as a global player today. There are a lot of collaborations taking place between Indian and foreign companies," Tarun Sharda, the organizer of the event, said.

Commenting on India's position in the global market, Doshi said, "92 out of every 100 diamonds are processed in India. India has a huge market for loose diamond processing. In terms of volume it is the hub."

India's position as the upcoming diamond destination is further proved by the fact that India exported diamonds worth 8.6 billion dollars in 2003-04. India is also the largest cutting centre in the world for diamonds.

"India was earlier known for cutting and polishing but now it is getting into retailing of gems and diamonds , for it is there where the margins are," said Anish.

The government has also realised the importance of boosting the sector by making provisions in the EXIM policy for duty free re-import of rejected jewellery up to two percent of FOB (free on board) value of exports.

Steps have also been taken to reduce the transaction cost to minimum and provide a hassle free environment for trade.

Only recently, the SBI has extended project financing for the diamond industry. "The bank is aiming at meeting the entire range of industry's needs through various products specially designed for requirements of the diamond industry in its integration towards jewellery exports," SBI Managing Director C Bhattacharya was quoted as saying in The Hindu.

All said and done, the road ahead surely looks bright and dazzling for the diamond industry. As someone rightly said, "Diamonds are forever".


Russia - the world’s largest producer of diamonds in volume terms

For the first time Russia released official data on its diamond production, export and imports, the news agency reported.

The data revealed that Russia had become the world’s largest producer of diamonds in volume terms, producing 33 million carats in 2003 and relegating Botswana, with 29 million carats, to second place.

Botswana at present leads in value terms however, as its rough diamonds are sold at an average of $60 a carat as against Russia’s $51 a carat. The data release is a precondition for Russia’s assumption of the chairmanship of the Kimberley Process.

Quoting a report released by the Russian Finance Ministry on December 23, the agency noted Russia mined 17.76 million carats of rough diamonds worth $948 million in the first half of 2004. By comparison, the country mined 14.55 million carats worth $729 million in the first half of 2003. However mine output grew to 18.47 million carats worth $947 million in the second half of 2003.

Belgium and Britain are the main importers of Russian diamonds. In 2003, 86 percent of Russia's diamond exports ($641.5 billion and $118.8 billion, respectively) were to these countries. In the first half of 2004, they imported 78 percent of all diamonds ($165.3 billion and $81.2 billion respectively).

The next largest importer of Russian diamonds was Israel, with 9.28 percent share of Russian exports worth $81.9 billion in 2003 and almost 10 percent worth $31.6 billion in the first half of 2004.


Int'l jewel thief gang receives stiff jail terms

Members of the largest expatriate criminal gang ever arrested in Shanghai will face up to 15 years in prison.

    The Shanghai No 1 Intermediate People's Court sentenced 25 people connected to three thefts of more than 6.13 million yuan (US$730,000) in diamonds, gems and other items in May. Gang members now face between one and 15 years in jail. They were also ordered to pay between 5,000 yuan (US$600) and 100,000 yuan (US$12,000) in compensation.

    The court said yesterday afternoon that no appeal had been lodged yet.

    On May 12, some members of the gang went to a local Communication Bank.

    With one acting as a lookout, one talking to security, a third one threw a coin near the victim, Gu Xiangchen.

    A fourth gang member pretended to warn Gu about the coin, while a fifth member took off with 80,000 yuan (US$9,700) in cash wrapped in a newspaper while the victim turned.

    The gang struck again the next day at the Shanghai Mart where the Fifth Shanghai International Jewellery Exhibition was being held. They made off with a canvas bag containing more than 2,000 carats in diamonds, a mobile phone, around 47,000 yuan (US$5,700) and HK$200 (US$26) in cash.

    On the morning of May 17, another robbery involving expatriate criminals was reported in the waiting hall of Pudong International Airport.

    While five of them were looking around, one purposefully splashed some yogurt on an Indian jeweller, Vivek Agarwal, and another one took away his suitcase containing 46,506 carats of gems, worth approximate 1.6 million yuan (US$193,000), when the victim was cleaning his clothes.


The bigger, the better, of course!

China's blushing brides-to-be follow simple rules when shopping for diamond rings.

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"The bigger, the better, of course!" said May Yi, a Beijing professional, sitting down with her fiancee for a day of temptation and agony at a jewellery store in the capital.

The idea that diamonds symbolise a lifetime of love has taken root in China, a country that traditionally prefers gold and jade, and where precious stones were unimaginable luxuries just 10 years ago.

Driven by savvy advertising from South Africa's De Beers and a booming middle class, China has vaulted into third place in worldwide diamond jewellery consumption after the United States and Japan, according to the Diamond Administration of China.

"Maybe it's because I've been influenced by Western ideas, but diamond rings are really popular," Yi said. "It's become normal for everyone I know to buy them when getting married."

The China market should overtake Japan within ten years and will also become the world's second-biggest cutting centre after India, De Beers estimates.

Most Chinese can't afford a flawless stone set in white gold or platinum, but the sheer number of potential buyers is enough to draw investment from South African, Israeli and Belgian firms.

"Japan, for the diamond business, is yesterday. America is today, because they take a big percent. But I think China will be tomorrow," said Liu Yansheng, China chairman of Michael Diamonds, a partner of Cape Town-based Transhex.

The United States currently consumes about 42 per cent of world's diamond jewellery, compared to 11 per cent for Japan and nine percent for China, he said.

DIAMOND BOOM

The domestic diamond jewellery market, worth about $1.2 billion last year, is expected to grow between 15 per cent and 20 per cent in 2004, according to official figures.

The retail market is fragmented, but the wholesale market is dominated by De Beers, 45-per cent owned by mining conglomerate Anglo American.

De Beers, blasted by critics for what they call unfair pricing policies, has been selling diamonds in China for industrial use since the 1950s. Some 80 per cent of all diamonds are used as cutting or drilling tools.

But China's market for industrial diamonds -- used in energy, electronics and medical applications -- is relatively small, at between 70 million yuan ($8.5 million) and 80 million yuan ($9.7 million) a year, with flat growth, executives say.

Its own production of diamonds is tiny, so it relies on imports. Analysts say China may soon exert the same pull on the world diamond market that it has on commodities, precious metals and crude oil.

Demand from China and Russia has helped boost diamond prices by 20 per cent worldwide this year, experts and retailers say.

Voracious domestic demand has already caused a shortage of small but high-quality stones, says Inez Ding, president of Antwerp-based China Diamonds Manufacturing.

The wholesale price for a near-flawless, 10-point diamond (one-tenth of a carat) has soared 40 per cent in just two years due to Chinese demand, she said.

FLEDGLING INDUSTRY

China set up the Shanghai Diamond Exchange in 2000 to meet demand, but diamond executives say trading has been stone cold since its launch, with the vast majority of rough stones smuggled into the country to evade high taxes.

The exchange said it traded $80.8 million of diamonds in the first quarter.

Similarly, a 17 per cent value-added tax has hurt efforts to create a diamond cutting industry, said Michael Diamonds' Liu. Most of the diamonds now are cut in India, Israel or Belgium.

More than 20,000 people work in diamond polishing in China, with an annual volume of three million carats, De Beers estimates. China's official wholesale market in polished stones was worth $377 million in 2003, it says.

De Beers is increasingly turning to China in order to reduce its dependence on diamond processing giant, India, analysts say.

"China is already the world's biggest jewellery manufacturing centre. I think it will take us about 10 years to catch up with India," Liu said, against the din of workers hammering and polishing rings.

Michael Diamonds plans to set up a cutting centre with several hundred workers, attracted by diamond workers' wages of just $60 to $120 a month.

PERFECT FIT

At US diamond trader Galace's sleek, 50 million yuan ($6 million) Asian flagship store in Beijing, diamonds set in platinum are the flavour of the day.

Most customers are couples looking for wedding rings, but there's no shortage of people trying on pieces for themselves.

"When we looked around Asia to open our first store, we pinpointed China as the place with the fastest growth," Jerry Pei, vice general manager of Galace China, told Reuters.

Luxury jewellers Cartier, a unit of Richemont, Bulgari SpA and LVMH are looking to expand in the Chinese market.

Cartier flew in from Paris its Star of the South, a 128 carat diamond mined in Brazil in 1853, for the opening of its new China flagship store on Shanghai's historic Bund waterfront this month.

Posh Italian design house Bulgari, which opened its first outlet in Shanghai in 2003, plans to open three to five stores in the next few years.

The retailers are counting on the likes of 27-year-old Yi, who finally decided to spend a princely sum of $6,000 on a rock.

"The diamond for my ring will be very big. My fiancee's will be very small," she said with a hearty chuckle.


Kate Beckinsale irks charity by wearing De Beers diamonds

A charity has targeted Hollywood actress Kate Beckinsale for flaunting De Beers diamonds during the premier of her new movie 'The Aviator' because of the way the company mines for the gems in Africa.

Beckinsale is one of the many Hollywood beauties, including Halle Berry, Naomi Watts and Scarlet Johansson, who have been targeted by Survival International, for showing off De Beers diamonds.

"We're not attacking Kate personally, as she may well be unaware of the controversy," charity director Stephen Corry was quoted by Femalefirst, as saying.

"But we do think A-list celebrities ought to be a little more savvy when someone comes to them offering free diamonds," he added.