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Kimberley Process, Sanctions, and the U-Shaped Recovery

Updated: 2 days ago

Diamond Gems Weekly - July 1


My oh my, how time flies. We’re at the mid-point of the year, and the diamond industry has certainly served up its share of drama in 2024. From the pending sale of De Beers to Botswana’s rising profile to restrictions on Russian goods, we have a lot to reflect upon. That’s not to mention the market-related challenges that we continue to face…

 

Here are the stories to be aware of as we begin the new week (and the second half of 2024):

 

1. Did you know the Kimberley Process has enabled source disclosure on KP certificates for mixed parcels? The decision made at the May intersessional meeting in Dubai went somewhat under the radar but is a highly significant development for the industry. Read my analysis here: A Giant Leap Toward Diamond Source Disclosure.

 

2. The European Union extended its sunrise period to implement a traceability-based certification scheme as part of its import restrictions on Russian diamonds. The deadline for mandated traceability is now set for March 1, 2025. The EU has also exempted “grandfathered” goods from being subject to the sanctions – that is, diamonds that were in the EU before the initial ban took effect earlier this year. I recommend reading this excellent update on “What We Know – And Don’t – About Russian Diamond Sanctions,” by Rob Bates at JCK Online.

  

3. De Beers continued to signal a slow U-shaped recovery in the diamond market as sales fell 31% to $315 million in June (sales cycle 5). The group noted a resurgence in retailer interest in natural diamonds in the US but ongoing economic challenges in China.

 

4. Petra Diamonds maintained a bullish outlook for diamonds in an investor presentation, planning production to rise from 2.7 million carats to around 3.6 million carats over the next five years. It gave a relatively flat outlook for prices for fiscal 2025 across its Cullinan, Finsch and Williamson mines.

 

5. Lucapa Diamond Company announced the conditional sale of its 70% stake in the Mothae mine in Lesotho to a local company called Lephema Executive Transport for a nominal fee of AUD 10,000 ($6,652).

 

6. Hong Kong-based jeweler Luk Fook reported revenue grew 28% to HKD 15.3 billion ($2 billion) in the fiscal year that ended March 31, while profit rose 37% to HKD 1.76 billion ($225 million). Growth was driven by a surge in gold and platinum products, while demand for diamonds declined, largely affecting its wholesale business in mainland China. Sales in Hong Kong jumped 52% while in mainland China they fell 2%.

 

7. Tse Sui Luen Jewellery (TSL), another Hong Kong-based jeweler, expressed similar sentiment as it reported revenue rose 3% to HKD 2.65 billion ($339 million). However, the company sank to a deeper loss of HKD 374.35 million ($48 million) due to higher costs and expenses.

 

8. Paris Haute Couture Week ran from June 24 to 27 with several quite remarkable high jewelry collections unveiled at the event. Enjoy this round-up of “The Most Stunning High Jewellery Collections of 2024.” Which is your favorite? I must say, I enjoyed the Boucheron presentation here.

A model wears jewelry from Boucheron's collection histoire de style. (credit: Boucheron)


Did you notice how time stood still while scrolling through those collections? Just a gentle reminder how lucky we are to work in such a luxurious, creative and innovative industry. Let’s celebrate that in the second half of the year, despite all the challenges and drama.  

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