Diamond Gems Weekly - October 28
Yes, I know, I’ve been harping on about earnings season for several weeks. But we really are in the thick of things now with companies providing production and sales updates at a rapid pace.
That said, it’s also conference season in the diamond market. That’s not an official season per se, but the industry does love a good fireside chat to brainstorm its way out of a predicament.
This year, several industry events have been clumped together over a one-month period. Let’s hope they produce tangible results.
The circuit began last week with the Angola International Diamond Conference which took place on October 23 to 24 in Saurimo Lunda-Sul.
Where, what, why, you ask? Allow me to explain...
Angola should be on your radar because it is the most prospective diamond producing nation. If there’s going to be another diamond rush, it will be in Angola.
The government has passed reforms to democratize its sales, create a more investor friendly environment, and broaden the scope of diamond industry-related activity in the country, even if it still has much to do.
A diamond hub has been built in Saurimo to house polishing factories, rough sales, trading platforms, education facilities and other diamond businesses. Saurimo, where the conference was held, is closer to the mines than the capital Luanda.
De Beers used the conference to report it has identified eight high potential kimberlites in the area as a result of exploration and airborne surveying work done since returning to the country in 2022.
The Angola event appeared to showcase Angola’s potential and how diamonds can support community development. That is, at least according to the theme. Unfortunately I couldn’t make the trip this time to learn from the presentations firsthand.
I expect the upcoming conferences will tackle the broader industry challenges and potential strategies.
Next up is the Dubai Diamond Conference taking place on November 11, preceding the annual Kimberley Process plenary and the JBTD Jewellery, Gem & Technology show taking place in Dubai that week.
The conference has the theme, Thriving Under Pressure, Navigating the Global Paradigms. I’m excited to moderate the opening panel discussion: Diamonds in Distress - Navigating geopolitical tensions, economic realities & supply chain pressures.
Looking at the agenda and having been privy to some of the planning, I’m confident the Dubai conference will bring some new ideas to the table, and that attendees will walk away with a fresh perspective. If you’re planning to be there, be sure to tug on my ponytail and say hi.
Then the industry heads off to Antwerp for Facets2024 taking place on November 26 and 27 under the banner, Navigating a New Era. Antwerp will be hosting its Diamond Days bourse trading fair in the two days following Facets.
Let’s hope these events have a practical element to them, with real collaborative solutions to the challenges the industry faces.
Okay, take a breath, it feels like that was a lot, and I’ve already taken up a lot of your time. So, let’s make this a rapid-fire round of the news that will help you understand what’s happening in the diamond market.
>>> We begin at retail, where we received a stark warning about the diamond market in China from Chow Tai Fook and Luk Fook Holdings. I give my analysis in the latest Diamond Minute video: Diamonds, Gold, and the Jewelry Slump in China.
>>> The clip includes an interesting little anecdote that LVMH gave about Chinese consumers as part of its 3Q sales update.
>>> Kering Group also noted weakness in Asia Pacific as 3Q revenue fell 15%. Its jewelry houses, including Boucheron, Pomellato, DoDo, and Qeelin, put in a “resilient performance,” Kering said.
>>> There is some confidence for the US, as the National Retail Federation expects spending to reach record levels this holiday season, while Bain & Company projected that Black Friday Weekend sales could hit new highs.
>>> The rough market remains somewhat cautious, but the real test will come at the next De Beers sight which begins on November 11. There were some positive indicators...
>>> Transatlantic Gem Sales (TAGS) and Sodiam, Angola's rough sales arm, sold 42 out of 44 diamonds on offer at their joint sale of Angolan specials above 10.8 carats. The tender generated $12.9 million, the companies reported.
>>> Gem Diamonds reported 3Q sales rose 36% to $42.7 million with the average price achieved at its Letšeng mine up 22% to $1,306 per carat. See the report here, but be aware that the company doesn’t give year on year data. I have presented the comparisons according to my records.
>>> Lucapa Diamond Company reported 3Q revenue from its Lulo mine in Angola rose 86% to $16.9 million.
>>> It should be noted that Gem Diamonds and Lucapa deal in relatively low volumes and high value goods and represent one mining asset. So, neither they nor the TAGS / Sodiam specials should be taken as a representation of the broader market trend.
>>> De Beers provided a more realistic view in its 3Q update. Sales totaled just $213 million generated from 2.1 million carats, compared to $899 million from 7.8 million carats last year. Remember, the company held just one sight during the quarter after it canceled sales due to the weak market. Last year it had three sights during the period. Group mining production fell 25%.
>>> De Beers also announced that it will provide country-of-origin data for all De Beers-sourced diamonds above 1.25 carats registered on its Tracr platform. It’s noteworthy that the announcement was made at a ‘Spotlight on Diamonds’ event in Paris that was attended by many leading jewelry brands. The luxury houses are certainly thinking about the source credentials of natural diamonds.
Image: Aircraft that De Beers used to conduct its airborne magnetic surveying in Angola (Credit: De Beers).
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