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3 posts from September 2009

507.55 Carat Diamond Found At Cullinan Mine

507.55 carat Petra Diamond

A 507.55-carat white diamond was recovered September 24 at the Cullinan diamond mine in South Africa.  Initial review of the diamond indicated it has exceptionally white color and high clarity.  The diamond is currently undergoing expert analysis to document color and clarity grading and to determine if the diamond is Type II (lacking yellow producing trace elements). 

507.55 carat Petra Diamonds Four Gems

The diamond was discovered with three other large diamonds with similar high color and clarity weighing 168.00 carats, 58.50 carats, and 53.30 carats.

507.55 carat Petra Diamond Johan Dippenaar

Johan Dippenaar, Petra’s Chief Executive Officer noted, “The Cullinan mine has again given the world a spectacularly beautiful and important diamond.  Initial indications are that it is of exceptional color and clarity, which suggest extraordinary potential for its polished yield.  We now eagerly await the findings of the expert analysis.”

The Cullinan mine is best known as the source of the world’s largest gem diamond ever discovered, which was discovered in 1905, named the “Cullinan,” and weighed 3,106 carats rough.  Other famous diamonds sourced at the Cullinan mine include the Golden Jubilee (755 carats rough), the De Beers Centenary (599 carats rough), the Niarchos (426 carats rough), and the Premier Rose (353 carats rough).  Cullinan was also the source for some of the world’s largest polished diamonds including the Golden Jubilee (545 carats polished), the Great Star of Africa (530 carats polished), and the famous Taylor-Burton diamond (69 carats polished).

7.03 Blue Diamond from Cullinan Mine

Petra Diamonds Cullinan Consortium who purchased the mine from De Beers in 2007 owns the Cullinan mine.  The Cullinan mine is also the world’s primary source of blue diamonds.  In May 2009, a fancy vivid blue diamond weighing 7.03 carats (cut from 26.58 carat rough) from the Cullinan mine sold for $9.4 million, the highest price ever paid for a gemstone sold at auction.


Hope Diamond Gets A Fashion Make Over

Last week the world’s most famous gemstone, the Hope Diamond, was displayed to the public for the first time in 50 years out of its setting.  Housed in the Hall of Geology , Gems and Minerals at the National Museum of Natural History, the Hope Diamond is getting a rare fashion make over.

More than five million visitors a year have viewed the diamond that has been in an ornate setting, sixteen white pear-shaped and cushion-cut diamonds suspended from a chain containing forty-five diamonds.

To observe its 50th year at the museum, the public was able to vote on a new setting for the famous blue diamond.  The Hope Diamond will be displayed loose, with no mounting, until next spring when it will be set in a temporary setting called “Enchanting Hope,” a necklace of a ribbon of diamonds with the Hope sitting in a cluster of diamonds in a teardrop shape.  The Hope Diamond will be returned to its ornate setting in late 2010.


Diamond Industry Copes with Crisis

 

EconomicCrisis

The past 12 months have been witnessed many forms of economic crisis and the diamond industry was no exception.  In past decades when demand for diamonds dropped, De Beers simply stockpiled diamonds to keep supplies and therefore prices stable.  However, in recent years the European Union has forbidden monopolistic activities (like stockpiling) and De Beers now only controls 40% of the diamond market compared to over 80% a few years ago so no longer has full control over diamond production.  As a result, the diamond industry had to implement new strategies to cope with the economic crisis.

The industry’s main tool was stopping production of diamonds.  De Beer’s mines in Botswana, Canada, and Namibia were mostly shut down with only about 10% production in the first quarter of 2009 compared to the same time in 2008.  While production is slowly being brought back online, some companies like Harry Winston Diamond Corporation has decided to cancel winter production at their Diavik Diamond Mine in Canada after a summer shutdown and production returning in the fall.

Rio Tinto shut down its Argyle diamond mine in Australia during the first quarter of this year resulting in a production drop for the country of almost 90%.

Alrosa, the Russian diamond producer, continued to produce diamonds but protected prices by having the Russian government purchase and stockpile the diamonds.

Even with the cuts in production, the dramatic drop in demand results in global polished diamond prices dropping 15.7% from August 2008 to August 2009.  Most of that drop occurred in the November to February period with prices being stable since May.

The past year produced the largest drop in diamond demand in more than 50 years with the most visible fall out being the weekly reports of bankruptcies in the retail and manufacturing sectors of the diamond industry.  Retailers in particular simply could not cut enough costs to compensate for the lack of sales.  Retailers and wholesalers who had made money by leveraging purchases of diamonds as the prices were going up suddenly saw their credit lines cut and interest rates rise at the same time their inventories lost 15% or more in value.

What can the diamond industry expect in the months ahead?  With the US economy slowly coming out of the recession and demand continuing to grow in China and India, demand should become more stable and head back up.  At the same time, many of the large diamond mines are moving from open pit to underground production, which will lower production levels.  The economic crisis has also delayed opening of any new mines so global production of diamonds will soon be outpaced by supply again, which means diamond prices will soon return to their historic 3 to 4 percent annual inflation trends.  However, the that price inflation will likely see considerably short term fluctuations as the industry continues to react to the more chaotic global financial times.