China’s jewellery sales decline 1.6% in July

Due to the ongoing uncertainties in the global political and economic front, jewellery sales in China were down 1.6 percent in July compared to July 2018.

Today

Angola to offload share capital in 195 firms including Endiama

The Angolan government is planning to offload share capital it wholly or partially holds in 195 different companies under the privatisation programme.

16 august 2019

Gem Diamonds’ Letšeng achieves $1,697/ct in H1 sales

Gem Diamonds said its 70%-owned Letšeng mine in Lesotho achieved $1,697 per carat in the first half of 2019, a 10% jump from $1, 537 per carat realised the previous period.

16 august 2019

Stornoway reported 2Q 2019 financial results

Stornoway Diamond Corporation reported its financial and operating results for the quarter ended June 30, 2019.

16 august 2019

DDI appoints new executive director

The Diamond Development Initiative announced the appointment of Ian Rowe as its new executive director, with effect from September 2, 2019.

16 august 2019

Our business is built on trust and confidence and so it is critical that we remain optimistic - Ernest Blom

10 august 2015
ernie_blom_xx.jpgA third generation diamantaire, Ernie Blom is now President of the World Federation of Diamond Bourses (WFDB) for the third term. He has served on a range of industry bodies as an executive and chairman for many years, including Chairman, Diamond Dealers Club of South Africa; Chairman, Rough Diamond Dealers Association; Chairman, Master Diamond Cutters Association; Chairman, Jewellery Council of South Africa, South African Diamond Board; and is a Special Diplomatic Advisor to the Belgium government on trade with Africa.

Ernie Blom’s grandfather entered the industry in the 1800s. His son is currently with him in business as fourth generation heir. Ernie Blom became a shop steward at 23 with the trade union South African Diamond Workers Union (SADWU). He rose through the ranks to become the youngest vice-president and a strike leader in the mid-1970s.

In an interview with Rough&Polished, Ernie Blom speaks about the various concerns of the global diamond industry at present.

Difficult times for the global diamond industry - high rough prices, polished prices stagnant and countless other challenges, including a slowdown in most of the consuming markets like China, Japan, India, etc. Do you see any ‘light at the end of the tunnel’?

Absolutely. Our business is built on trust and confidence and so it is critical that we remain optimistic. The industry has seen downturns in the past and come through them successfully. That is because we are a resilient business. We need to look at how we run our companies and operate prudently and that will allow us to overcome current challenges.

Businesses worldwide looked towards the recent JCK Show in Las Vegas for sustenance but were disappointed. Do you see a turnaround in the US market in the coming months?

I believe the US market is solid. It is not spectacular and I would not expect any great leap forward. But it is the world's biggest and most important market, and it is important that it remains stable, particularly at a time when the second-largest consumer – China – is seeing lower demand. We must remember that we are heading into the summer vacation period, which is historically a quiet time.

The South African diamond industry has been in the news, but not always for the right reason.  How do you see the SA mining centres progress in the coming years? Can you give an overview on the industry there at present?

Unfortunately, the South African diamond sector has seen, and continues to see, a wide range of challenges. The biggest of these is the decline in the manufacturing sector. It is vitally important that government and industry work together to reverse this trend.

We must also bear in mind, however, that South Africa remains the fourth-largest producer by volume and a critical member of the diamond producing family of countries.

Some sections of the industry think that rough diamonds sold with high discounts by some African countries is one of the reasons behind the polished prices softening worldwide. What are your views?

I must say that is not a view with which I am familiar. The vast majority of Africa's diamonds are mined in conjunction with De Beers and sold through its channels with the countries in which it is involved. Production from the other diamond-producing states is relatively small in comparison, so even if they were selling at a large discount, the effect would be rather small. Most of the other producers sell via the tender system, which gives them fair market value.

After the recent Presidents Meeting, a bigger picture of the global market must have emerged. Any guidelines charted out for the industry players to meet the many challenges including low profitability, bank finance, etc.?

We discussed a wide range of issues at the Presidents Meeting in Tel Aviv. The burning issues are, of course, falling profitability, declining bank credit, liquidity problems, overgrading of diamonds and synthetic stones.

We hold ongoing meetings with the producers and banking officials, as we did at the Presidents Meeting. We aim to impress upon these very important players that just as diamond firms need them, they also need the diamond industry. In the area of banking, we are working on a Know Your Client template with ABN Amro Bank. It is critical that both sides understand the challenges and requests of the other, and that is our aim.

The GIA’s statement on undisclosed treated diamonds submitted in Israel is a big concern for the global diamond industry. There have also been instances of ‘overgrading’ by labs as well. Is there a solution to stem these disturbing trends, lest consumer confidence is lost forever?

Consumer confidence is, of course, they key point here. The WFDB was very pleased to see the immediate action taken by the Israel Diamond Exchange and its President, Shmuel Schnitzer. This shows all outside observers the seriousness with which we take this issue.

There is no place for fraudulent behaviour, and the WFDB, of course, has it in its power to have diamond bourse members found to have acted illegally ejected from the bourse to which they belong and banned from trading at any of the 30 affiliated bourses across the globe.

Not long ago, the diamond industry was reeling with reports of synthetic or lab grown diamonds being mixed with natural stones, especially in India. Latest tests conducted, however, detected no synthetics, thus vindicating the Indian industry. What should be the diamond industry’s plans to safeguard itself?

It is possible that the problem is not as large as initially believed. It is difficult to quantify. However, whether that is the case or not is less important than the need for diamond industry members globally to keep a very close eye on the diamonds it buying.

There is no doubt that the production capability of the lab-grown diamond sector is growing very quickly, and the quality of the stones it is growing is continuously improving. Detection machines are available in all the diamond hubs that enable suspect diamonds to be weeded out and sent for further examination.

The need for generic marketing is being discussed by global leaders in every conceivable meeting, but there is no consensus reached on the subject. Do you feel the DPA should take the initiative, so that the others in the pipeline, too, can collaborate and support this effort? What is next in WFDB’s agenda, given that the global diamond industry is now going through the toughest of times?

There can be little doubt that the diamond industry has fallen behind the curve where generic marketing is concerned since De Beers ended its generic promotion program almost a decade ago. This is very unfortunate because other products have rapidly provided competition for consumers' disposable income, not least electronic gadgets. As I mentioned at the Presidents Meeting, I have never heard of a long queue of young people waiting all night to buy an item of diamond jewelry as they do with the latest versions of iPhones, iPads and other such products.

The WFDB is fully behind the work of the World Diamond Mark Foundation, which is taking large strides to create public interest in diamond jewelry and boost sales. We were delighted to hear of the establishment by a group of diamond companies of the Diamond Producers Association. We look forward to working with the DPA, as this is a huge challenge that cannot be established by one group alone.

The diamond industries of Namibia and Botswana have seen their share of success, but do you see them sustain long-term growth? While the beneficiation initiatives are welcome, will the move affect other cutting centres adversely? In which areas do you think the Indian diamond-manufacturing sector should focus, to retain its position as the largest in the world?

Beneficiation was a welcome development and should have started much sooner. There can be no question whatsoever that diamond producing countries have the right to beneficiate their own diamonds in order to bring added value and to provide much-needed employment.

However, establishing a diamond cutting and polishing center and a jewelry making hub is a lengthy and expensive business. It is not by chance that India has developed such a huge and globally important gems and jewelry trade, which plays a vital role in the sub-continent's exports. Each country has to leverage its skills and see where it is able to bring added value to its peoples.

Aruna Gaitonde, Editor in Chief of Indian Bureau, Rough & Polished