A Little Gift of Sarcasm - December 2023 News
This is the Regal Imports News for December 2023
The Prime minister of India, Narendra Modi, gave Joe Biden and his wife, a large laboratory
grown diamond on a recent visit to the United States. Considering the current price of larger factory-made diamonds this gift may hold the record as the cheapest gift given to a political dignitary. Modi was trying to boost the image of laboratory-grown diamonds as a burgeoning industry in India. What a bad move, promoting a business that is currently failing, at the expense of a natural diamond business that is established, profitable and thriving in his own country.
There is no need to expand on Modi’s bad judgement but there is a need to expand on another political debacle. The Kimberley Process again finds itself trailing behind all other diamond transparency initiatives. Its original mandate has remained stagnant for close to 20 years. Their mandate requires a 100% consensus to make any changes. A simple example of their structural limitations is that Russia is a Kimberly Process signatory, and to implement Russian sanctions, Russia must sanction itself.
Leaving the Kimberly Process behind, the G7 countries have decided to finally take on Russian sanctions … only two years after the war began. The G7 nations account for 70% of the world’s polished diamond sales. The new restrictions will rely on the diamond industry policing the flow of diamonds, a procedure that miners and cutters can easily implement. Here my opinion differs from that of Martin Rapaport, who thinks that governments will do a better job at monitoring diamond flow.
De Beers has just decided to continue stockpiling its rough diamonds until demand and supply are more balanced. Industry restrictions on diamond supply have had a positive effect on polished diamond prices. The negative effect of holding back diamond supply is that some mines will not be able to survive the financial loss. Even Anglo American is cutting back its funding to De Beers. Contrary to public opinion diamond mines are very expensive to operate and some are finding it very difficult to remain in the black.
There is one country that could be very effective in promoting natural diamonds and, that
country is Botswana. The government of Botswana has negotiated a very good deal with De Beers, and it will be taking a much larger portion of its own rough diamonds for distribution. Botswana is a country that greatly benefits from its diamond resources and is in an ideal position to tell the world how diamonds are breaking the cycle of poverty.
As concerns the question of natural diamond rarity, the retrieval of natural diamonds peaked in 2005 and has decreased by 30% over the last 16 years, as some long-term diamond mining projects tap out. Bain and company conclude that, as opposed to man-made diamonds, natural diamond prices fluctuate at times, but they have over the long term exhibited a consistent annual increase of 3%.
Closing on a more personal note, natural diamonds, will always remain relevant as long as they are presented, with honesty, positivity, and excitement and industry does not get bogged down in nonconstructive processes. And with that … Mark. Heather, Neil, Anna, and I wish you a brilliant Chanukah, a sparkling Christmas, and a healthy, happy, and prosperous New Year.
Mel Moss
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