De Beers' rough diamond sales rose for the third consecutive month, a sign of improved demand in the market. However, cycle 2 sales of $430 million are 13% down year over year as the industry struggles to regain its position.

AWDC Management Statement: G7 - Clarity in times of change
https://mailchi.mp/9b1c318e9536/awdc-management-statement-g7-clarity-in-times-of-change?e=f96b01d8e5

The AWDC message follows reports that Belgian customs are apparently blocking rough diamond shipments into the country. The complaint is that there's a serious lack of clarity on what is and isn't allowed in.

Signet Jewelers retail sales declined 8% to $6.7 billion last year. And yet, it is by far the largest US jewelry retailer.

Some thoughts on the LGD market

Russia's Alrosa agrees to sell some production to the state, source says
By Reuters
March 27, 20247:39 PM GMT+1Updated 13 hours ago

MOSCOW, March 27 (Reuters) - Russia's finance ministry has agreed with sanctions-hit diamond producer Alrosa (ALRS.MM) , opens new tab to purchase part of the company's production in 2024,
a source familiar with the matter said on Wednesday.

Interfax news agency earlier on Wednesday reported on the agreement, citing two sources familiar with the matter.

As part of this agreement, state-owned precious metals and gems repository Gokhran purchased the first batch of diamonds from Alrosa this month.

The amount of the transaction is unknown.

Both Alrosa and the finance ministry have not yet responded to Reuters' request for comment.

The European Union added Alrosa, Russia's biggest diamond producer, to its sanctions list in January as part of punitive measures it has imposed on Moscow over the conflict in Ukraine.

The headline should've stated that Gokhran agreed to buy diamonds from ALROSA

Two views of wholesale LG prices over time. Either way, price keep declining and compressing.

March jewelry and diamonds sales declined 3%.
Retailers are experiencing a decrease in revenue from LGD and that will lead them to seek alternatives.

Tenoris made a significant update to its system. Check it out.

https://www.tenoris.bi/march-sales-weak-lgd-revenue-issues-continue/

It was such a pleasure speaking with Lauren Petrovic. Her questions took a different path than most, and she got plenty out of me.

I strongly recommend that you add her podcast to your regular industry insights consumption list.

Check out the first episode here:
https://open.spotify.com/episode/1kgNB8xkItPS8k5j6Pz6nD?si=caIgMlhXSXiVDMW0xHXaow

Britain’s former ‘secret weapon’ diplomat now with Russian diamonds in her sights

A senior British diplomat who left the Foreign Office earlier this year is now lobbying Western governments over their plan to ban Russian diamonds, The Telegraph can reveal.
Emma Wade-Smith, who was the UK’s consul general in New York until January, is running a worldwide campaign to alter a G7-designed scheme to stop Russian diamonds being sold in the West.

The G7 and EU banned the sale of diamonds mined in Russia earlier this year, in an attempt to cut off an £805 million annual revenue stream to the Kremlin.
Member states, including the UK, were concerned that Western consumers had inadvertently funded the Russian war effort by buying diamond jewellery on the high street.

The countries drew up a certification scheme, due to come into effect in September, that will require all diamond companies to send their products to the Antwerp World Diamond Centre in Belgium to be verified as non-Russian before they can be sold.

Ms Wade-Smith, who was once dubbed the British government’s “secret weapon” in America, has been hired by the diamond giant De Beers to lobby for major changes to the plans.

De Beers, which is the second largest diamond company in the world, argues that the requirement to send diamonds only to Antwerp creates high costs for producers and could threaten the revenues of African countries where they are mined.

It has asked Ms Wade-Smith and a team of lobbyists in Washington DC to push for the verification plan to be expanded.

image001.jpg
The EU and G7 have banned the sale of diamonds mined in Russia CREDIT: Bloomberg /Chris Ratcliffe
The company says that other countries including Botswana, South Africa, Namibia and India should verify diamonds as non-Russian on behalf of the G7 and EU.

Intense lobbying over the new rules threatens to delay the certification scheme altogether.

Ms Wade-Smith is banned from lobbying British officials under the government’s business appointment rules, but has been in contact with other governments since starting the position in February.

An industry insider said her role in the US and former position as Britain’s trade commissioner to Africa had given her extensive government contacts relevant to the diamond trade.

The De Beers proposal to widen the certification scheme is favoured by diamond companies on the World Diamond Council and some African producers.

But experts say that handing the enforcement of the ban to other countries who have not signed up to it could lead to more Russian diamonds entering the West illegally.

Hans Merket, an expert in the diamond trade and researcher for the International Peace Information Service, said that if the lobbying is successful, it could create “weak links in the chain”.

“Agreeing on shared objectives presents the biggest challenge, given that countries such as Botswana, South Africa, and India do not align with the G7’s focus on sanctioning Russia,” he told The Telegraph.

“The problem is that without agreement on the ultimate objective of controls, allowing additional countries to verify the origin of the diamonds risks creating weak links in the chain that are prone to exploitation by those seeking to flout traceability requirements.”

He added that the solution favoured by the diamond companies was “based on trust rather than evidence and therefore leaves much more room for manipulation”.

image002.jpg
De Beers argues that countries that mine diamonds – such as Botswana, Namibia and South Africa – should be allowed to verify diamonds as non-Russian on behalf of the G7 and EU CREDIT: AFP/Monirul Bhuiyan
When approached by The Telegraph, De Beers denied that it was pushing for the sanctions regime on Russia to be watered down, and said it was supportive of the G7 and EU attempt to ban Russian diamonds from Western markets.

A spokesman said: “De Beers categorically does not oppose a verification system as part of the sanctions but has significant concerns about the approach of using a ‘single rough diamond node’ in Antwerp for such verification.

“Introducing additional ‘rough diamond nodes’ in diamond-producing countries such as Botswana, Namibia, South Africa and Canada, all of which have rigorous and well-established government-led diamond certification processes, would enhance the effectiveness of diamond source verification while avoiding unintended negative consequences for ethical non-Russian diamond producing countries and the legitimate non-Russian diamond trade.”

The spokesman added that Ms Wade-Smith had a “broad government relations remit” that included “engagements with G7 representatives on this topic, as well as all other interactions with government stakeholders, just like any equivalent role in a corporation”.

De Beers Group today announced it is relocating its auctions business headquarters from Singapore to Botswana. The relocation is part of an effort of streamlining its operations. It also serves as a step towards further development of the diamond sector in Botswana, the company said.

The Board of De Beers majority owner Anglo American has rejected BHP Billiton's takeover proposal

Something to ponder for your Sunday