Mar 21

Rapaport to India: Scrap Diamond Import Tax

RAPAPORT… Martin Rapaport, chairman of the Rapaport Group, called on India to show reciprocity in its trade relationship with the United States.

“America is and will be India’s most important market,” Rapaport said on Monday at the “Mines to Market” conference, marking 50 years of India’s Gem Jewellery Export Promotion Council. “American demand will grow significantly due to new economic policies, and the U.S. government will insist on a level playing field,” he added, citing President Donald Trump’s policy of leveraging American power to rebalance what he considers to be unfair trade ties with large export nations such as China.

The U.S. imported $3.8 billion worth of diamonds more from India than it exported to the country in 2015, making India a net beneficiary in the partnership. Yet India does not reciprocate by offering competitive import tax rates, Rapaport argued. India’s import tax on loose polished diamonds and gems is 2.575 percent, whereas the U.S. charges nothing. In addition, India’s levy on diamond-jewelry imports is 31.56 percent, compared with America’s 5.5 percent.

“We’re calling for a U.S.-India bilateral trade agreement with zero import taxes for diamonds, gems and jewelry,” he added. “Reciprocity means equal import taxes at U.S. and Indian borders, or – even better – zero percent at both.”

Rapaport also called on the Indian diamond trade to sharpen its focus on transparency and traceability of supply, saying that “markets will be identified and segmented based on the sourcing legitimacy of people, products and money.”

Moves by retailers such as Signet Jewelers to ensure they source diamonds from approved suppliers indicate a market shift toward responsible sourcing, which, he cautioned, traders must be aware of.

“You must be responsible for what you buy and sell,” Rapaport said. “If you can tell your wife and the tax authorities everything you are doing in business, you’re okay.”

Meanwhile, Rapaport questioned the practices of the Kimberley Process and raised suspicion about why rough diamonds are leaving the United Arab Emirates at a significantly higher value than when they enter the country. The 40-percent increase in price “sticks out like a sore thumb,” he said.

Mar 21

Al Hashemi to Head KP Participation Committee

The United Arab Emirates’ representative at the Kimberley Process (KP), Maryam Al Hashemi, has been appointed to chair the KP’s Committee on Participation and Chairmanship for this year, the UAE recently reported.

The committee – which consists of representatives from past KP chair countries, as well as from the World Diamond Council and Civil Society Coalition – is generally headed by the country that chaired the KP the previous year. Its role is to work with the new chair – Australia, in this case – to assess the admission of new participants and the removal of members that don’t comply with the scheme’s standards.

Al Hashemi has worked for the Dubai Multi Commodities Centre (DMCC) since 2003.

Mar 21

Rapaport Auctions Sells Over 83,000 Carats of Diamonds for $12.5M in Hong Kong

PRESS RELEASE, March 21, 2017, New York … Rapaport Auctions, the world’s leading recycler of diamonds, closed its Hong Kong auctions this month at one of the largest jewelry shows of the year. The auctions sold over 83,000 carats of polished diamonds for $12.5M, achieving a sell-through rate of over 87%.

Hundreds of parcels of recycled and finely assorted commercial- and premium-quality diamonds in all shapes and sizes were sourced from retailers, pawnshops and refineries around the world.

The Rapaport Melee Index (RMI™) for small diamonds increased by 13.3% to 108.40 during the first quarter of 2017. The index is down 7.9% from its level of 117.77 in March 2016.

© Copyright 2017, Rapaport USA Inc.

Prices for small melee and under-the-carat-size diamonds in low to medium qualities significantly improved as increased demand from China provided much-needed liquidity and stability to the market. Improved market conditions and a critical mass of diamonds being auctioned attracted the top buyers in the market. Viewing appointments were at maximum capacity for the entire duration of the auction, with over 100 buyers seeking to source the wide variety of diamonds being offered.

“The Rapaport auction results exceeded expectations. With improved Far East demand and the Indian diamond market adapting well to demonetization, the market was eager to trade after an extended period of uncertainty and liquidity constraints. Prices for small melee diamonds have rebounded by over 13% in the past couple of months after hitting a 7-year low in December. We are proud to fulfill our mission of achieving fair market prices for our suppliers and buyers by providing them with the world’s largest polished diamond auction platform,” said Ezi Rapaport, Director of Global Trading, Rapaport Group.

To participate in Rapaport Auctions, companies are invited to visit www.rapaportauctions.com, contact Auction Support via email auctions@rapaport.com, or call their local Rapaport office.

The Rapaport Group operates in compliance with the U.S. Patriot Act and OFAC regulations.

Rapaport Media Contacts: media@diamonds.net

U.S.: Sherri Hendricks +1-702-893-9400
International: Gabriella Laster +1-718-521-4976
Mumbai: Manisha Mehta +91-97699-30065

About Rapaport Auctions: Rapaport Auctions is the largest recycler of diamonds in the world, driving market liquidity and assisting suppliers to achieve fair market value for their diamonds on a consistent basis. The large quantities and wide variety of merchandise offered attract competitive bids from a broad range of international buyers. Rapaport Auctions is committed to addressing the needs of the international diamond community for enhanced liquidity while presenting unprecedented buying opportunities.

About the Rapaport Group: The Rapaport Group is an international network of companies providing added-value services that support the development of fair, transparent, competitive and efficient diamond and jewelry markets. Established in 1978, the Rapaport Price List is the primary source of diamond price and market information. Group activities include Rapaport Information Services, Rapaport Magazine, and Diamonds.net, providing research, analysis and news; RapNet – the world’s largest diamond trading network; Rapaport Laboratory Services provides GIA gemological services in India, Belgium and Israel; and Rapaport Trading and Auction Services specializing in recycled diamonds and jewelry. The Group supports over 20,000 clients in 121 countries and has offices in New York, Las Vegas, Antwerp, Ramat Gan, Mumbai, Surat, Dubai and Hong Kong. Additional information is available at www.Diamonds.net.

Martin Rapaport (Publisher) grants limited permission to use copyrighted data appearing in this press release and in conjunction with journalistic copy, reporting or articles concerning diamond pricing and information in graph or data presentation format only. The following credit notice must appear alongside, underneath, or in close proximity to any use of the copyrighted data: “Used with permission of Rapaport USA, Inc. Copyright 2017 © Rapaport USA. All rights reserved.”

Mar 21

De Beers Buys Out LVMH Retail Partner

RAPAPORT… De Beers has taken full ownership of the De Beers Diamond Jewellers (DBDJ) retail operation, the mining company said Tuesday.

The group bought the 50-percent stake owned by LVMH, which previously operated the stores, for an undisclosed sum, thereby ending its partnership with the luxury house.

“More fully integrating the De Beers Diamond Jewellers brand and store network will enable us to deliver an even more differentiated diamond offering, alongside our fast-growing diamond brand, Forevermark,” said Bruce Cleaver, De Beers chief executive officer.

Whereas Forevermark is a De Beers brand carried by other retailers, DBDJ is a separate stand-alone retail business. Francois Delage, CEO of DBDJ, said the retail chain would benefit from the “unique diamond culture” that had prevailed at De Beers since the company’s establishment in 1888.

DBDJ comprises 32 stores in 17 consumer markets around the world, including operations in greater China, an established presence in London and Paris, and a new flagship location in New York, De Beers said.

While De Beers core business is its rough diamond mining operations, it also has research operations, its Element Six industrial diamond facility, the Forevermark brand, and a unit responsible for grading polished diamonds and developing synthetics-detection equipment.  

Mar 21

Last weeks pops in gold and silver herald trend change, Turk tells KWN

Best Regards
24hGold

Mar 20

Agarwal to Buy $2.5B Stake in Anglo American

RAPAPORT… Shares in Anglo American rose 9 percent on Thursday after Indian billionaire Anil Agarwal announced his intention to invest $2.45 billion (GBP 2 billion) in the mining conglomerate.

The investment would be made through Volcan Investments, Agarwal’s holding company, which owns Vedanta Resources.

Vedanta affirmed its commitment Wednesday to the strategic priorities of ramping up production from its portfolio of low-cost assets, increasing its free cash flow, and reducing its debt.

Anglo American owns 85 percent of diamond mining company De Beers, as well as copper and coal operations, while Vedanta focuses on commodities such as zinc, lead, silver, copper, iron ore and aluminum.

The investment would give Agarwal (pictured) a 10 to 13 percent stake in Anglo, making him the second-largest shareholder, according to Bloomberg.

However, Agarwal said he would not make a takeover bid for Anglo, following the failure of a merger proposal last year, Bloomberg reported.

Mar 20

‘Mines to Market’ Conference Highlights: Day 2

RAPAPORT… After an action-packed first day of the “Mines to Market” conference in Mumbai, we’re following developments at the final sessions of the event marking the 50th anniversary of the Gem Jewellery Export Promotions Council.

See our coverage of the first day here and of Prime Minister Narendra Modi’s address to the conference here.

1 a.m. EST: Fischler to Midstream: Stop Skimping on Costs

The diamond manufacturing sector must stop relying on low-cost solutions and put real investment into high-quality employees and technology, stressed Stephane Fischler, president of the Antwerp World Diamond Centre.

Fischler urged manufacturers and traders to change their business model of trying to protect their profit margins by being frugal in their operations.

“Stop being obsessed by cheap labor, cheap software and cheap computers,” he said Monday during a session exploring survival of the midstream. “Cheap is expensive,” he warned.

The subject of slim profit margins has come under scrutiny at the conference due to prevailing high rough prices and soft polished prices, with speakers offering a range of solutions for increasing profitability.

Investing in better technology and business solutions would enable better profitability for companies, Fischler said. The industry must also hire and promote more women, raise its investment in marketing and understand how to become more attractive to banks, he added.

Mar 20

Dominion Rejects $1.1B Takeover Bid

RAPAPORT… Dominion Diamond Corp has turned down a $1.1 billion offer to be purchased by the Washington Companies, the mining company said late Sunday.

Washington, which has interests in mining, transportation and heavy equipment businesses across the U.S. and Canada, offered Dominion $13.50 a share on February 21, representing a 35-percent premium to the closing price on Friday. Dominion shares rose 23 percent to $12.25 in Monday morning trading on the New York Stock Exchange.

Dominion called the offer “opportunistic,” saying the proposal failed to recognize the company’s full value under its current business plan.

“Based on the presentation received from WashCorps [the Washington Companies], and by their own admission, the board confirmed that WashCorps does not have experience in the highly specialized diamond mining and marketing industry,” Dominion said in its Sunday statement. “WashCorps also advised that they did not have any unique plans for the business.”

Washington, meanwhile, said Sunday that it was supportive of Dominion’s plans to develop its mining assets, adding that were it to acquire the company, it would put in place a long-term cost structure “to preserve the operational and financial flexibility for management to execute its strategic plan.”

“We are disappointed that Dominion’s board has thus far prevented Washington from moving ahead with its proposal, under which shareholders would receive a substantial premium and immediate liquidity, but we remain fully committed to completing this transaction,” said Lawrence Simkins, Washington Companies’ president.

Washington said Dominion’s board had so far refused to let it perform due diligence, which might lead to an increased offer.

Dominion countered that Washington’s demand for a lengthy period of exclusivity as well as a veto on the pending choice of a new CEO at Dominion would paralyze the company.

“The Dominion board is more than willing to consider all value-creating opportunities for the company, but it will not do so to the detriment of its shareholders and other stakeholders,” Dominion said. “The board of directors reiterates its openness to engage with WashCorps on customary terms.”

Dominion said last week it expects sales to increase to between $875 million and $975 million in the current fiscal year, which ends January 31, 2018.

Growth will be driven by increased production volume as the company develops new pits at its wholly owned Ekati mine, and a planned increase at Diavik, in which the company has a 40-percent stake (the rest is owned by Rio Tinto). Dominion’s total production this year is forecast at 9.1 million to 10 million carats, from 7.87 million carats last year, the company said.

Mar 20

DPA Taps Bartle Bogle Hegarty for India Ads

RAPAPORT… The Diamond Producers Association (DPA) has appointed Bartle Bogle Hegarty as its creative agency in India, as the organization plans to roll out the “Real Is Rare” campaign in the sub-continent in September, reported Jean Marc Lieberherr, the DPA’s chief executive officer.

The launch will be the DPA’s first venture outside the United States. It’s also planning to launch in China in 2018, Lieberherr said on Monday at the Mines to Market conference in Mumbai.

“Real Is Rare” has enjoyed significant success from its first two video commercials, which aired during September and October last year. Lieberherr reported 220 million views of the paid advertisements, and the videos were watched more than four million times on YouTube. The separate docu-film “Why Real Is Rare” garnered more than 444 million “earned impressions,” or views on social media and other platforms, while a 15-second clip during the ABC television coverage of the Oscars reached 22 million viewers.

“‘Real Is Rare’ is not our platform; it’s an industry platform that we manage, but in the future, everyone can build on it in the same way that the industry built on ‘A Diamond Is Forever’ for years,” Lieberherr said. “The younger generation is interested in diamonds, it’s just not interested in the way we’ve been talking about diamonds – so we need to change that.”

Meanwhile, the DPA is seeking to raise its budget for 2017, which will be funded by its seven member mining companies, predominantly De Beers and ALROSA.

Lieberherr said he expects ongoing support from ALROSA following last week’s appointment of Sergey Ivanov as the miner’s new CEO. Lieberherr said he was planning to speak to Ivanov to explain the concept of the DPA, and added that ALROSA had confirmed its contribution to the DPA in its own budget.

Mar 20

Rapaport Urges India to Scrap Diamond Import Tax

RAPAPORT… Martin Rapaport, chairman of the Rapaport Group, called on India to show reciprocity in its trade relationship with the United States.

“America is and will be India’s most important market,” Rapaport said on Monday at the ‘Mines to Market’ conference, marking 50 years of India’s Gem Jewellery Export Promotion Council. “American demand will grow significantly due to new economic policies and the U.S. government will insist on a level playing field,” he added, citing President Donald Trump’s policy of leveraging American power to rebalance what he considers to be unfair trade ties with large export nations such as China.

The U.S. imported $3.8 billion worth of diamonds more from India than it exported to the country in 2015, making India a net beneficiary in the partnership. Yet India does not reciprocate by offering competitive import tax rates, Rapaport argued. India’s import tax on loose polished diamonds and gems is 2.575 percent versus zero charged by the U.S. In addition, India’s levy on diamond-jewelry imports is 31.56 percent, compared with America’s 5.5 percent.

“We’re calling for a U.S.-India bilateral trade agreement with zero import taxes for diamonds, gems and jewelry,” he added. “Reciprocity means equal import taxes at U.S. and Indian borders, or – even better – zero percent at both.”

Rapaport also called on the Indian diamond trade to sharpen its focus on transparency and traceability of supply, saying “markets will be identified and segmented based on the sourcing legitimacy of people, products and money.”

Moves by retailers such as Signet Jewelers to ensure it sources diamonds from approved suppliers indicates a market shift toward responsible sourcing, which, he cautioned, traders must be aware of.

“You must be responsible for what you buy and sell,” Rapaport said. “If you can tell your wife, your taxi driver, everything you are doing in business, you’re okay.”

Meanwhile, Rapaport questioned the practices of the Kimberley Process and raised suspicion about why rough diamonds are leaving the United Arab Emirates at a significantly higher value than they enter the country. The 40-percent increase in price “sticks out like a sore thumb,” he said.