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Investment diamonds will open a new distribution and sales channel that the diamond industry dearly needs to evolve - Alain Vandenborre, SDiX
The issue of investment diamonds has become particularly clamorous during recent years. While experts continue to debate whether it is possible to turn diamonds into a popular investment tool, Singapore launched the first Singapore Diamond Investment Exchange (SDiX), which is doing quite a brisk business. Its Executive Chairman and founder Alain Vandenborre gave this interview to Rough&Polished where he shared his vision of diamonds as an investor, described the work of the Exchange and told about the existing obstacles for and potential prospects of investment diamonds.

In India demand for diamond jewellery is growing - Sulish Verma
Vikas Chain & Jewellery (P) Ltd of Delhi is one of the leading manufacturers and wholesalers of gold chains, gems and diamond jewellery in India. The company’s collections comprise superbly crafted jewellery embellished with diamonds and precious stones of the finest quality. In an interview with Rough&Polished, Sulish Verma, the company’s managing director, touches upon the present conditions prevailing in India, its effects on the jewellery sector’s growth and cautions  jewellers to focus on design and quality to survive in the competitive business scenario, as well as to gain the confidence of today’s discerning customers.

Botswana, SA highly prospective says De Beers
De Beers, a leading global diamond miner in terms of value, said Botswana and South Africa are both highly prospective and geologically form part of the same cratonic region in Southern Africa. The group’s head of media relations Lynette Gould told Rough&Polished’s African Bureau Editor-In-Chief Mathew Nyaungwa that although they had been continuously prospecting for kimberlites in Botswana since 1955, the diamond producer historically had less access to prospective ground in South Africa due to the mineral legislation pre-1994, but with the introduction of the new legislation in 2004, new areas had opened up. Meanwhile, the group said it was currently having discussions with the Angolan government and state-diamond company Endiama for new concessions.

Ukrainian emerald cartel
Several years ago, the agents of the Ukrainian Security Service intercepted a large parcel of smuggled Colombian emeralds at the Borispol Airport in Kiev. The case promised to set off much drumbeat, but it quickly fell apart. There were two reasons for this: the affair involved a senior official of one of the law enforcement agencies in Ukraine, while the emeralds turned out to be ... synthetic. Later, some of the participants in this case were forced to leave Ukraine due to the well-known political events in the country. One of them agreed to comment the specifics associated with the trade in synthetic gemstones to Rough&Polished. Our meeting took place in Athens in early March of this year.



News

24.04.2014
Mwana Africa boosts Q4 diamond output in SA
Mwana Africa says diamond output at its Klipspringer mine, in South Africa more than doubled over the quarter to March.

24.04.2014
Angola arrests 37 illegal diamond miners
The Angolan police have arrested 37 immigrants who were illegally mining diamonds in the central Bié Province.

24.04.2014
Diamond Manufacturers Get New Sawing System
Diamond jewelry manufacturers will now have a new sawing system at their disposal, thanks to some innovation on the part of diamond technology company Sarine, the firm says.



India as a world diamond centre

03.09.2012

From ancient times to the present day

Since ancient times, India has been a historical center of diamonds. Several thousand years ago people there were able to mine diamonds and used them to make jewelry. Merchants from many countries exchanged goods and gold for Indian diamonds. Moreover, in the Indian treatise Arthashastra (literally “the doctrine of wealth”) by Kautilya there is a mention of duties imposed on diamonds, which indicates the importance of diamond trade among other goods.

The first diamonds were found and then mined in India more than 1,000 years BC. It is known that Alexander of Macedon brought the first diamond to Europe from India in 327 BC. Almost two thousand years, until the end of the 19th century (1896), India was the only country in the world where diamonds were mined. The diamond mines of Golconda near the modern city of Hyderabad are renowned around the world for the most famous diamonds in history found there.

Diamond cutting also originated in India, where diamonds were skillfully cut and polished by Indian craftsmen since the beginning of the 16th century. Not surprisingly, the evaluation of diamonds and gems also appeared there. Diamonds in India were evaluated similar to the division of society into castes (varnas): Brahmans - transparent colorless diamonds, Kshatriyas – diamonds with a reddish hue, Vaisyas - diamonds with a greenish or yellow hue, and finally Shudras - gray or dark color diamonds. Varna in Sanskrit means quality, color, category.

Production of and trade in diamonds in India

In India, the Madhya Pradesh state has a primary diamond deposit (Majhgawan) and a few placers, the total reserves of which are estimated at 2.6 million carats. Their diamond output is insignificant (Table 1, Fig. 1).

India is the largest consumer of rough diamonds in the world. At the same time, as it was mentioned above, its diamond output is negligible (Table 2).

Table 1

Diamond mining in India, 2006-2011

















According to the Kimberley Process

Table 2

Import and export of diamonds in India, 2006-2011














According to the Kimberley Process

India - the world's largest diamond cutting center

India is the undisputed global leader in the polished diamond market: it holds a 60% market share by value, 80% by volume and 92% by the number of stones. India’s diamond and jewelry business involves about 1.3 million workers engaged in 25,000 enterprises.

Today the country produces 8 out of every 10 polished diamonds in the world. If earlier it was mainly the so-called "Indian goods" - small diamonds, now there is a trend to increase the range of processed diamonds including stones of two carats and above.

India is engaged in intensive construction of new factories with modern equipment, where laser diamond processing and computer diamond marking are being brought to perfection.

India’s diamond cutting industry is concentrated in the west of the country in Mumbai, Surat and Ahmedabad. The entire diamond business is concentrated and controlled by 2,500 families who practice Jainism and are closely linked by ties of kinship. This community, adding up to 0.5% of India’s population, plays an important role in trade and finance.



































 










Fig. 1. Diamond industry of India

India is confidently in the first place as the world's largest producer of polished diamonds. The number of employees in Indian diamond cutting companies is about one million people.

The diamond cutting industry in India is a highly organized sector with a hierarchical structure. At the top of the "management pyramid" is the Indian Gems and Jewelry Export Promotion Council. The aim of the Council is to coordinate the interests of the state and industry, as well as to assist in promoting Indian jewelry industry goods on the world market.

The second tier is occupied by major private import-export companies. All of them are engaged in cutting, except for two. MMTS – the state-owned export-import company trading in minerals. The second one, Hindustan Diamond Company Private Limited (HDCPL), is a joint venture of the Ministry of Trade and Industry of India and De Beers Group, which hold equal stakes in the company. HDCPL was established in 1978 and is one of the leading agents in rough diamond trade in India. HDCPL is a DTC sightholder and supplier of diamonds to the Indian diamond industry, mainly to small and medium factories.

The third tier consists of small and medium-size enterprises in the formal sector of the industry. They are working under contracts with major importers of rough. Their main distinction is that they are highly specialized depending on the nature of processed products.

The fourth tier may include small-scale enterprises of the informal sector operating within a system of subcontracts and specialized in processing very small diamonds. Actually, they source their rough in the secondary market.

Jewelry production in India

India's jewelry industry is export oriented. Jewelry companies in India are highly organized operations using all the modern technologies of management with due account for local conditions. Even small factories (25-50 persons) in this sector have modern equipment.

India’s jewelry industry is mainly producing jewelry pieces of Western design. Still they leave a place for exclusive and expensive products made in the traditional Indian manner.

Jewelry manufacturers use the most up-to-date equipment, casting techniques and elements of computer design.

The Government of India and Gems and Jewelry Export Promotion Council contribute their efforts to win leading positions not only in diamond cutting, but also in manufacturing and exporting jewelry. It was the government’s policy which facilitated high production and export performance being aimed at liberalizing the jewelry sector and domestic market of precious metals and stones.

India’s prospects to preserve leadership in the global diamond business

The high competitiveness of the diamond industry in India is defined by the following factors:

1. Historical traditions and a large number of people employed in the diamond business with a relatively low wages, as well as introduction of modern techniques and equipment making it possible to develop the diamond and jewelry industries in a dynamic way.

2. State protectionism practiced to maintain import and export of goods and virtual absence of state control over the circulation of diamonds and jewelry.

3. High rates of GDP growth in India, as well as high rates of growth in certain branches of India’s industry contributing to higher living standards and thus to an increase in domestic demand and consumption of jewelry and diamonds, which is a huge potential for further development in a country with a population of over one billion people.

Yuri Danilov, Ph. D., Director of the Department of Regional Subsoil Management Economics, Institute for Regional Economics of the North at Ammosov North-Eastern Federal University

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