Miners Partner With Designers To Create Sustainable Jewels

Emerald and diamond necklace by Carolina Bucci using Gemfields Zambian emeralds 

Two London-based mining companies worked with jewellery designers to create new pieces that promote the sustainable and humane practices of the mines they operate. Another key selling point is provenance, knowing which mine the gems were unearthed.

London-based mining and marketing company, Gemfields, worked with MUSE, a New York showroom for emerging and established fine jewellery designers, for a collection of limited-edition and well-priced jewels. Designers Carolina Bucci, Dezso by Sara Beltrán, Elena Votsi, Holly Dyment, Michelle Fantaci, Nikos Koulis, Savannah Stranger, Silvia Furmanovich, Yossi Harari and AYA by Chelsy Davy unveiled a range of jewels at the Couture Show using Mozambican rubies and Zambian emeralds from Gemfields’ mines in those two countries.

“Rose Petal” earrings by Silvia Furmanovich using Gemfields Mozambican rubies

Most styles are based on each of the designers’ bestsellers, recreated with Gemfields rubies and emeralds. The collection is for everyday wear targeting a fashion-forward consumer, with the majority of the limited production collection falling within the $1,000 and $10,000 price range (with the exception of a few high value statement pieces).

This type of approach isn’t new for Gemfields. The company has been producing collections through partnerships with designers (experienced and emerging) for a number of years. The difference with this particular collection is its affordability.

Ruby and diamond “Crisscross” ring by Yossi Harari using Gemfields Mozambican rubies

“Having done collaborations at both ends of the spectrum, we see the alignment with MUSE as the perfect opportunity to showcase the versatility of color and connect with a fresh new audience,” said Gabriella Harvey, Gemfields director of Procurement and Product Services.

18k yellow gold and diamond earrings by Suzanne Kalan with diamonds from Rio Tinto’s Argyle mine

Mining giant Rio Tinto used unveiled their “Diamonds with Story” collection, working with six US designers: Paige Novick, Xiao Wang, Jennifer Dawes, Matthew Campbell Laurenza, Suzanne Kalan and Sandy Leong. All of the diamonds are sourced from Rio Tinto’s Argyle Mine in Western Australia. The mine is most famously known for its rare Argyle pink diamonds. However, diamonds being used for the collections are primarily white and champagne.

The “Infinity’ three row curved ring by Paige Novick with diamond pave from Rio Tinto’s Argyle mine

Like Gemfields, affordability is important with these creations. Unlike Gemfields, all of the designers are experienced and well-known to the trade and consumers.

18k yellow gold band, 6g, .53ctw rose cut cognac diamonds, .05ctw round brilliant cut diamonds by Jennifer Dawes using Rio Tinto diamonds from its Argyle mine

“Increasingly, the value of a diamond is tied to where and how the diamond was mined, how it was cut and polished, and the process of bringing it to sale,” said Bruno Sané, general manager of marketing for Rio Tinto Diamonds. “This is a very reasonable expectation that is steadily reshaping the diamond industry for the better.” 

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Dominion Diamond Completes $553 million Acquisition of Ekati Diamond Mine

Ekati Diamond Mine

Dominion Diamond Corp., formerly known as Harry Winston Diamond Corp., said Wednesday it has completed its acquisition of the Ekati Diamond Mine in Canada’s Northwest Territories and related diamond sorting and sales facilities in Yellowknife, Canada, and Antwerp, Belgium. The Canadian subsidiary of mining company BHP Billiton was the majority owner of the mine and the other facilities. BHP is exiting the diamond business to concentrate on other mining activities.

The purchase price was $500 million plus price adjustments of $53 million for items that include interest, tax and capital expenditures bringing the total amount paid to $553 million. On the date of closing Ekati had cash on hand of approximately $65 million and two sales cycles (10 weeks) of diamond inventory either in the process of being sorted and valued or available for sale. Dominion Diamond said the inventory will be valued against its rough diamond sales assortments.

Dominion Diamond also provided letters of credit to the Government of Canada of approximately CAD$127 million, in support of reclamation obligations for the Core Zone. The purchase price and the letters of credit were satisfied from or secured by cash on hand.

The Ekati Diamond Mine consists of the Core Zone, which includes the current operating mine and other permitted kimberlite pipes, as well as the Buffer Zone, an adjacent area hosting kimberlite pipes having both development and exploration potential.

Dominion Diamond funded the acquisition through its recent $1 billion sale of the Harry Winston luxury retail brand to Swatch Group. The company also owns a 40 percent stake in the Diavik Diamond Mine, also in the Northwest Territories of Canada. The acquisition of Ekati has made the company the largest supplier of Canadian diamonds.

Dominion Diamond is still flush with cash and the speculation is it will use the money to buy the remaining 60 percent interest in the Diavik Diamond Mine from mining company Rio Tinto, which has, like BHP, stated a desire to pull out of the diamond business to focus on other mining activities.

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The Former Harry Winston Diamond Corp. Files First Earnings Report Under New Name; Ekati Mine Acquisition Is Approved; Frédéric de Narp Reportedly Resigns

The new Dominion Diamond Corp. logo.

Dominion Diamond Corp., the company formerly known as Harry Winston Diamond Corp., said that consolidated sales from continuing operations increased 8 percent to $110.1 million for the fourth quarter. The increase was the result of an improved sales mix, partially offset by a 3 percent decrease in volume of carats sold during the quarter. It also cited increased demand in India, China and the United States.

Meanwhile, operating profit from continuing operations fell 12 percent in the quarter ended Jan 31 to $21 million. Consolidated EBITDA from continuing operations decreased 6 percent to $45.3 million.

Net income from continuing operations fell to $12.1 million, or 14 cents per share, from $12.7 million, or 15 cents per share, a year earlier.

Since 2006, the company operated as two segments: a luxury retail jewelry and watch division under the iconic Harry Winston brand name and a diamond mining business. The company closed its sale of the luxury brand segment to the Swatch Group Ltd. on March 26 in a deal valued at $1 billion. As part of the closing of the transaction, the company changed its name to Dominion Diamond Corp. and its common shares now trade on both the Toronto and New York stock exchanges under the symbol DDC.

The company now operates solely as diamond mining and marketing business and its earnings report reflects this with the results of the luxury brand segment treated as discontinued operations for accounting and reporting purposes.

Other fourth quarter highlights include:

* Rough diamond production during the fourth calendar quarter increased 19 percent to 1.9 million carats.

* The company had 500,000 carats of rough diamond inventory with an estimated current market value of approximately $65 million at January 31, of which approximately $25 million represents rough diamond inventory available for sale, with the remaining $40 million being sorted.

In related news:

* The company previously said it received regulatory approval to complete the $500 million acquisition of the Ekati diamond mine in Canada’s Northwest Territories and diamond sorting and sales facilities in Yellowknife, Canada, and Antwerp and Belgium, from mining company BHP Billiton Canada Inc. Dominion said it expects the transaction to close on or about April 10. It was speculated that the sale of the luxury retail segment was used to finance the acquisition.

* In addition, the company is reportedly interested in buying the remaining stake in Diavik diamond mine. It currently owns a 40 percent share of the mine with the remaining interest owned by mining company Rio Tinto, as Rio has stated a desire to pull out of the diamond business.

* Frédéric de Narp, president and CEO of the Harry Winston luxury segment, has resigned, according to a report in the New York Post. Nayla Hayek, a Swatch board member and daughter of the company’s founder Nicolas Hayek, has assumed de Narp’s role.

“The last year and this first quarter has been a time of great positive change for the company, including changing its very identity,” said Robert Gannicott, Dominion Diamond Corp.’s chairman and CEO. “This change reflects a focus on the production, sorting and sale of diamonds from Northern Canada, a region that we know and understand well. The acquisition of the Ekati Mine, and its operating team, is expected to close next week giving us operational control of both a producing mine and development opportunities in the large scale resources on the Ekati property. Together with our exploration acreage adjacent to the Ekati and Diavik properties, this positions us from grass-roots exploration through development opportunities. We also become the largest supplier of Canadian diamonds sold through an expert sorting and marketing chain that we have perfected through the years of Diavik production.” 

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Harry Winston Q3 Sales Up 88%

Harry Winston, said that third quarter consolidated sales increased 88 percent year-over-year to $140.9 million, led by a two-fold increase in rough diamond sales from its Canadian mine and a 50 percent increase in its luxury jewelry retail operation.

Consolidated earnings totaled $13.7 million for the period, ended October 31, compared to a loss of $4.9 million for the third quarter of 2009. Consolidated net income for the third quarter was $3.9 million.

Rough diamond sales for the quarter rose 192 percent year-over-year to $60.7 million. The Toronto based company supplies rough diamonds to the global market from its 40 percent interest in the Diavik Diamond Mine, located in Canada’s Northwest Territories. Mining giant Rio Tinto owns the remaining 60-percent share of the mine. The increase in sales resulted primarily from a 182 percent increase in volume of carats sold.

Meanwhile, retail sales increased 48 percent for the quarter to $80.2 million. The company’s retail division, Harry Winston Inc., is a premier diamond jeweler and luxury timepiece retailer with salons in key locations including New York, Paris, London, Beijing, Tokyo and Beverly Hills.

Robert Gannicott, Harry Winston chairman and CEO said the insatiable appetite for hard luxury goods in China and other emerging countries is the main reason for Harry Winston’s strong third-quarter performance.

“Diamond demand in the Far East continues to propel rough diamond prices as the Diavik mine transitions to underground production,” Gannicott said. “Marketing efforts and store openings are successfully burnishing the Harry Winston brand to capture the branded luxury appetites of the emerging wealth of the newly developing parts of the world.”

Swiss Development Group Calls for Countrywide Ban in Zimbabwe Diamonds

The Marange diamond field  Photo by Tsvangirayi Mukwazhi, AP

A Swiss international development organization has urged its government to ban trade in diamonds from Zimbabwe's controversial Marange field because of continued reports of human rights violations, according to the Ecumenical News International.

Bread For All, the Development Service of the Protestant Churches in Switzerland, said the diamonds should not have a market in Switzerland based on reports of ongoing human rights abuses by its local partner, the Zimbabwe Advocacy Office.

Marlon Zakeyo, who heads the Zimbabwe Advocacy Office in Geneva, told ENI, that the ban in Switzerland is important because the country is a center for jewelry and watches, it is known for protecting human rights and it is a partner of the Kimberly Process, which is charged with preventing trade in “blood” of “conflict” diamonds—terms used to describe diamonds mined in a war zone and sold to finance an insurgency, invading army's war efforts, or a warlord's activity.

In addition, the two organizations said the definition of the terms “blood” or “conflict” diamonds should be updated by the KP to include human rights violations by forces of the state. The groups say the present definition refers to rebel forces, a loophole that had allowed the Zimbabwean government to sell Marange diamonds internationally under Kimberley Process supervision.

If Switzerland agrees to ban the diamonds, it will be the first country to do so. However, they will join a growing list of diamond dealers and jewelry industry officials who will not buy diamonds from Zimbabwe, most notably the Rapaport Diamond Trading Network (RapNet), U.K. jewelry company MasterCut, and the Company of Masters Jewellers, the U.K. retail organization that is the exclusive buyer of MasterCut diamonds.

Beginning in 2008, the Zimbabwe army took over the Marange fields forcing out tens of thousands of small-scale miners. These miners were massacred by soldiers and villagers have been beaten, raped and forced to work as virtual slaves. The human rights abuses led to Zimbabwe being suspended from the KP.

The KP voted to temporarily reinstate Zimbabwe in July, allowing two supervised exports of rough diamond from the Marange production held in August and September. However, the KP in November failed to reach an agreement on whether Zimbabwe will be able to sell diamonds through the organization’s certification scheme, a system that tracks diamond sales from the mine to the market, which has led to a ban diamonds from the Marange field.

Meanwhile, Zimbabwean Mines Minister Obert Mpofu has threatened to sell diamonds without Kimberley approval, saying Zimbabwe has met all of its requirements.

Gem Diamonds Letšeng Mine Yields 185-ct. White Diamond

Photo from Daily Mail

Gem Diamonds Ltd. said it uncovered an “exceptional” 185-ct. rough white diamond from the Letšeng mine in Lesotho at the end of October.

Early examinations indicate that this rough diamond will yield top color and top clarity polished diamonds and is thus expected to achieve a substantial price per carat, the mining company said in a statement.

It is the second of two large, top quality white diamonds to be recovered from the Letšeng mine in the last two months following the 196 carat white diamond which was recovered from Letšeng in August 2010. Unlike Letšeng’s other noteworthy diamonds which were recovered from the Satellite pipe, this diamond was recovered from Letšeng’s larger Main pipe, “demonstrating that the Main pipe is not to be underestimated for its ability to produce very large top quality diamonds,” the company said. The mine has yielded three of the world’s 20 largest recorded diamonds since it acquired the mine in 2006.

The London Daily Mail reports that the diamond may be worth up to £7million ($11.2 million).

Gem Diamonds owns 70 percent of Letšeng Diamonds in partnership with the government of the Kingdom of Lesotho, located in Southern Africa, which owns the remaining 30 percent. Operated by De Beers between 1977 and 1982, Letšeng reopened operations in 2004 and was acquired by Gem Diamonds in late 2006 for $118.5 million.

"Letšeng is one of the world’s truly extraordinary diamond mines and its reputation is well deserved given the frequency with which it produces remarkable diamonds,” said Clifford Elphic, Gem Diamonds CEO. “Management remains focused on its strategy to substantially expand production at Letšeng in order to maximize value and increase the returns from this world class asset.”

Second Zimbabwe Diamond Sale Date Kept Secret

The Zimbabwe government said it will not disclose the date of its next diamond auction citing security reasons, according to a published report.

The diamond sale was scheduled for September 6, but apparently has not happened. Mines and Mining Development permanent secretary, Thankful Musukutwa, reportedly refused to disclose the dates when Abbey Chikane Kimberley Process appointed monitor is expected in the country to certify another batch of diamonds for the second sale.

Zimbabwe sold 1.1 million carats of diamonds on Aug 11 from the two companies mining in the Marange diamond fields. It was the first diamond sale since diamond sales from Zimbabwe were banned by the Kimberly Process, an organization of governments, diamond dealers and non-government organizations that attempts to combat “conflict” or “blood” diamonds by using a certification process to trace rough diamonds to their origins.

Beginning in 2008, the Zimbabwe army took over the Marange diamond fields forcing out tens of thousands of small-scale miners. These miners were massacred by soldiers and villagers have been beaten, raped and forced to work as virtual slaves.

Some diamond traders and jewelers are still skeptical whether the diamond fields are free from abuse and have instituted their own ban on the purchase of diamonds from  Zimbabwe. Among them are the Rapaport Diamond Trading Network, UK-based diamond jewelry company MasterCut and the Company of Masters Jewellers, the exclusive buyer of MasterCut diamonds