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Coloured diamonds are the best investment option if anyone would like to invest in diamonds

10 october 2022
sergio_calqueiro_xx.pngDr Sergio Calqueiro, the President and Managing Director of the Dubai-based ‘Foz Gold & Diamonds Trading’ has been dealing in polished diamonds, gold, Import & Export, International trade and development for the past six-plus years.

Sergio is also the CEO of High-Tech Concepts Marketing (HTC Marketing), a private corporation in Germany, providing Modular Energy Storage Systems for almost 12 years. HTC also manufactures structural spaces for Storage Systems.

Earlier, as COO of JHG GmbH in Germany, Sergio gathered vast knowledge and experience in Engineering and Mining for ten years, but not before his stint in Research & Development of green technologies for three years as CEO of Lightstone Technologies Inc, a London-based company.

Here, in an exclusive interview, Sergio Calqueiro speaks of his dream to build ‘Foz Gold & Diamonds’ into a top trading company, with the opportunity that Dubai Hub offers…

Let’s hear your story from the beginning. How, where, and when did you enter the Gold & Diamond trading business? And how has the journey been to date?

My journey started way back in 2006 when we started our operations in Sierra Leone and South Africa with CS Roberts Group. We started buying the product (Diamonds & Gold) directly from diggers on the ground. Our core business at this stage was buying rough diamonds and exporting the goods to the USA and Dubai where most of our clients would view the goods at a local Dubai office or Brinks and we would later prepare the export to the buyers' destination. The business model was very simple and straight forward - we buy on the ground in Africa and resell the goods to our clients at a profit. After the Ebola break out in 2013 we start looking for a new Hub to operate where we then started working with a Dubai company which we finally bought out and took over the company.

Dubai for us was one of the best decisions we took. We streamlined our operations and Dubai became our operations centre. Throughout the last few years, we have expanded our business to the USA (New York and Los Angeles and Asia (Hong Kong).

Our journey continues... and as time has passed our business model changed to adapt to the current times which I believe has been our strength and why we have been able to stay in this market. It has been an incredible journey with ups and downs. New regulations have made the export and import process more difficult and time-consuming but these new regulations have helped the industry maintain a safer and transparent product flow of the goods from the source (mining operation) to the end customer. This new KYC and AML make it difficult for illegal goods to find a buyer.

For how many years has Foz Gold been operating in Dubai? Can you walk us through your company and its activities in Dubai, to benefit our readers?

We have been active in Dubai since 2013, the services we offer are:

Import Services - Foz can provide import services into Dubai for fully documented legal shipments, of gold and diamonds for qualified Buyers and Sellers.

Secure Storage - Foz can provide short-term secure storage of diamonds and gold, in its secure storage facility in the Almas Tower in the DMCC (Dubai)…wholesale provider of physical precious metals bullion products including gold, silver, platinum and palladium. All products are of Hallmark refineries and exchanges approved to trade in any markets worldwide. Foz only offers physical bullion and does not deal in futures, options, securities, or derivatives. Most jurisdictions do not require special licensing to trade physical bullion.

Foz's new upcoming platform presents our clients with the ability to trade and store their product/s or use their products as a collateral guarantee for financing, while their assets remain liquid in all markets. It also offers the security of fully insured, audited, allocated and segregated products, in addition to the safety and confidentiality trading in the UAE; a Collateral Financing program for non-U.S. customers; Inventory that is audited by a major Accounting Firm; and the ability to store our clients’ product at insured depositories worldwide. As a wholesale provider of precious metals, Foz does not sell precious metals directly to the general public. For compliance purposes, Foz offers its products and services through independent retail dealers across the world, providing their clients and ours with a proven way to trade and securely store their precious metals.

Financing Minerals in the ground – finance your mining operation without putting a financial burden on your company or operations. We will finance against a 43 101 technical report with third-party verification using Geo-scan. This is a unique program in which every project has its own needs and requirement.

The benefit of doing business in Dubai:

· A zero-tax regime, meaning no personal or corporate income taxes

· Safe and robust governance

· A world-class financial hub

· An educated supply of human capital with diverse professional experience hailing from all corners of the globe

· No capital repatriation restrictions

· No share capital requirements

· Lower set-up costs compared to other onshore jurisdictions

Are you into trading gold & diamonds globally or only to parties in particular countries? How successful has Foz Gold been while operating in Dubai and what is its USP?

Our markets are Dubai, the USA, and Europe (Belgium, London, Germany and Switzerland). We are happy to say we have had a constant growth of 20% a year except for the 2 years of Corona. We are happy to say we are back on track. We consider ourselves successful in our little world as we are not a huge company and have no plans at the moment to expand further but instead grow further year by year with the new financial program we started at the beginning of 2022. To avoid any legal issues, we are particular that any new clients or suppliers conform to the current KYC and AML.

Does Foz Gold deal in coloured diamonds as well? What is your forecast for coloured diamonds’ future in comparison to white diamonds… demand-wise?

Yes, we deal in coloured diamonds. This is the best investment option if anyone would like to invest in diamonds. Buy and hold coloured stones over the last 10 years have gone up an incredible 350% to 400% so returns are anything from 35% to 40% a year. Show me a better investment. We will keep investing in colour stones and hopefully, we can grow in this market.

These days environment-conscious and rights-sensitive millennials prefer to avoid the mined gems altogether and go in for lab-grown diamonds. Do you think this trend will adversely affect the natural diamond business? Please comment.

Yes, this trend is affecting the natural diamond business already. Many traditional diamond traders say that lab-grown diamonds have no value but unfortunately this

could not be further than the truth because the resale value of lab-grown diamonds will have a similar resale value as a natural diamond but what retailers don’t tell you is when you walk out the door with your engagement ring that ring’s resale value is worth 30% so a loss of 70% and we are talking about Earth Mined diamonds, from an investment point of view, not a good investment for resale. But if you consider that only a rare or a really special stone could be resold at a profit then no matter what you buy at the retail level i.e. earth mined diamonds or lab-grown this is just a bad investment. Now when buying retail lab-grown diamonds you would be paying 40% below the earth-mined diamonds pricing. This is the reason why lab-grown diamonds have done so well in this market. We believe this market will continue to grow.

Lab-Grown is a relatively new product on the market and we need more time to see how this develops, just as we once did with Earth-Mined Diamonds. So Lab-Grown is an active product from a retail perspective which has affected the Earth-Mined diamonds.

Foz does not deal in the retail markets… we sell into the investment market.   

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished