Industry News – 15 July 2016

Gemfields goes from strength to strength with new funding

Gemfields announced last week that they have finalised four new debt financing facilities totalling $65¬million. CFO Janet Boyce said the funding will be used to increase the company’s rough ruby production to 20 million carats per year and rough emerald production to more than 40¬ million carats a year over the next three years. With 70% of the new funding to be ploughed directly into their Montepuez ruby mine in Mozambique.

At a ruby auction in Singapore last month, rubies from the 75% ¬owned Montepuez earned revenues of $44.3¬ million and achieved an average price of $29.21 per carat. A month earlier in the Indian ruby auction the 2.78¬million carats averaged $5.15/ct, a new record for lower ¬quality emerald auctions. The next step for the world’s leading mining company of ethically sourced gemstones are sapphires in Sri Lanka and turning those into a positive account and elsewhere. Gemfields really is an exciting company to keep an eye on as they go from strength to strength.

World Diamond Mark Released Retailer Opinion Poll

Jewellers take note; the World Diamond Mark (WDM) has released its WDM Retailer Opinion Poll, which is available online and in print, to determine what services retailer jewellers need most in their stores to advance generic diamond promotion to the consumer public.

The poll asks retailers to rank the type of services they wish to access in the field of promotion, education, business services and industry coordination, among other things.

“The WDM’s brief is to assist retail jewellers in rekindling consumer desire and confidence in diamonds and diamond jewellery,” said WDM Chairman Alex Popov. “We have therefore composed a detailed poll to query jewellers and ask them to rank the services they need most in order to achieve this. While we feel that we have a good grasp of what retail jewellers need, there is nothing like getting direct and up-to-date input from the business community we are committed to serve,” he added.

The poll can be accessed online. It is also available as a pull-out form in issue #7 of the World Diamond Magazine, which was published earlier this month. It will also be included in the upcoming edition of the World Diamond Magazine which will be printed in July.

“We encourage jewellers to take 10 to 15 minutes to fill out the form,” said Krisztina Kalman-Schueler, WDM’s Programme Director. “As we are mandated to offer retailers who joined our WDM Authorised Diamond Dealer programme high-quality, consumer oriented services, the purpose of the poll is to learn more about what services retailers wish to receive to serve their business models best.”

To download the answers to the poll visit http://www.wfdb.com/media-news-press/news-headlines/422-world-diamond-mark-introduces-retailer-opinion-poll

Rio Tinto Sparkles with a red diamond

Rio Tinto Diamonds joined forces with the Perth Mint, and produced a gold coin set with a red diamond from Rio’s Argyle mine. The coin is said to be worth $1 million AUD ($762,458) and according to Colin Barnett, the Premier of Western Australia the coin will be legal tender – under the Australian Currency Act, 1965.
The coin, which is named the Kimberley Treasure, is made from 99.99 percent fine gold and features a radiant cut 0.54-carat kimberly treasure coinred
diamond.

Simon Trott, managing director of Rio Tinto’s diamonds business said, “We are delighted to collaborate with the Perth Mint on the exclusive release of this distinctive investment piece. It is a beautiful symbol of the unique treasures of Western Australia and sets a new benchmark in limited edition craftsmanship.”
Only a very small proportion of the Argyle diamond mine’s output consists of pinks and an even smaller proportion — on average one carat a year — of red diamonds.

Jewellery and Watch Sales Continue to Grow

According to new research just released by the British Retail Consortium jewellery and watch sales have improved over last June 2015. The report suggests that the run-up to Eid in the final week may have distorted figures as Eid was in a different month in 2015 – however they didn’t show 2015’s Eid’s figures to back this assumption up.

British Retail Consortium chief executive Helen Dickinson said: “While sales did slow towards the end of the month, it is too early to define this as a trend. The month out-turn was predominantly driven by a decline in sales in the fashion categories and isn’t a surprise given that June 2015 saw record growth in clothing and footwear. Looking across the last three months, food has held its ground with a better performance than non-food sales, which has seen its lowest growth since April 2012, largely due to fashion combined with a slowdown in furniture.

BRC story  - jewellery and watch sales increase for June 2016Britain’s retailers remain open for business. The EU referendum vote has not changed their relentless pursuit of delivering for customer’s day in, day out or their investment in meeting the needs of fundamental changes in the way people shop, driven by digital and technology. Despite the fall in the pound, the time it takes for any input price increases to translate into higher shop prices will depend on a combination of factors including further changes in the pound, commodity prices and the challenge for retailers to move pricing given the intensity of competition. So, there won’t be any instant shocks as any changes would take time to feed through.”

The latest figures show overall retail sales decreased 0.5% on a like-for-like basis from June 2015, when they had increased 1.8% from the preceding year.

On a total basis, sales were up 0.2%, against a 2.9% rise in June 2015, which had been the third best performance in 2015.

On a three-month basis, total UK retail sales rose 0.5%, and 1.2% on a 12-month average basis. This is the lowest 12- month average since May 2009.

Russia sells 11% stake in Alrosa to plug county’s deficit

The Russian government has sold a 10.9% stake in the Alrosa diamond mine $814m as part of a privatisation programme aimed at plugging the country’s budget deficit. Dmitry Pristanskov, director of the Russian federal property agency that owns state assets said that each investor paid Rbs65 per share.alrosa story

One person close to the share placement said the Russian Direct Investment Fund, a fund that promotes inward investment, acquired about half of the Alrosa stock sold by the government, in partnership with Asian, Middle Eastern and western investors. More than 100 investors bought stock in the placement, according to Andrei Shemetov, head of global markets at Sberbank CIB, lead manager on the deal.

The sale of shares in Alrosa is just the start of a privatisation programme of Russia’s big industries as an answer to the sanctions placed on Russia over the Ukraine crisis by the US and EU.

Russian and European investors each sought about a third of the Alrosa shares available in the placement, said Boris Kvasov, director of equity capital markets at VTB Capital. Middle Eastern and Asian investors sought 20 per cent of the shares, and US investors five per cent, he added. However, the US government has expressed concerns that the privatisation programme could be used to finance Russian companies affected by the sanctions.