60 Minutes Puts The Focus On Congo Gold

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The 60 Minutes segment on gold mining in the Congo aired on Sunday. People are familiar with conflict diamonds but this piece may bring conflict gold into the spotlight. The video shows men and young boys working long hours in mines and extracting gold which later goes on to help fund the violent conflict in the Congo one that is said to be the worst conflict since World War II in terms of lives lost (over 5 million).

The video also shows children working to attract gold by laying blankets in the riverbeds. Dangerous mercury is then used to extract the gold. What little is obtained is often seized by the rebels who use it to fund their war. The report interviewed a woman who had seen both of her young sons murdered in the conflict. Many women have been raped, villages have been burned and families wander, trying to find safety and sustenance wherever they can. While only one percent of the world's gold comes from the Congo that is still a $300 million a year industry and it is too much. The report highlighted the difficulties of tracking the gold, which is often smuggled into Uganda and mixed in with other gold. In the report Tiffany and Company was praises for using gold mostly from a mine in Utah.

It was a great piece but what it doesn’t acknowledge is that Tiffany isn’t the only place to go for safe gold. I was also surprised not to see mention of actions like the No Dirty Gold campaign or about the increasing use of recycled gold in jewelry. The situation in the Congo is an issue that the public needs to be aware of but there are also a lot of safe places to buy gold and a lot of companies that keep conflict gold out of their products. Just check out some of the companies on the blogroll on this blog!

[via National Jeweler]

Botswana Plans A Diamond Future Beyond De Beers

Botswana and De Beers have been entrenched together for a while and in many ways its been a good deal for Botswana. The country has been able to use the profits from diamond mining to develop much-needed infrastructure. But the global diamond slump has been hard on the nation. Speaking at the World Federation of Diamond Bourses (WFDB) meeting in Antwerp in November, Dr. Akolang Tombale spoke about the need for Botswana to use diamonds to stretch beyond diamonds. Currently the country mainly exports rough stones but Tombale believes that Botswana needs to be more involved in the diamond industry, in cutting, polishing and trading stones. Diamonds.net has a great piece on Tombale’s speech and why it is so key that Botswana get the most value from its natural mineral resources. As diamonds move along the supply chain from mine to jewelry store they collect value. Selling out at the rough stage cuts off the potential to earn more.

De Beers set up its main sorting facility in Gaborone in March 2008 and established the Diamond Trading Company Botswana (DTCB). So far 15 factories are up and running, with the last one is due to launch soon. Under the guide of DTCB sightholder Safdico, the Diamond Technology Park was launched in January 2009 creating a new potential hub for Botswana’s diamond cutting industry meaning that more diamond value will stay in the country as it switches from exporting mainly rough stones to exporting both rough and cut stones. Tombale told Rapaport News that the next step is to set up a diamond trading platform in Botswana for third-party trading. Currently Botswana and De Beers are in a symbiotic relationship, they have joint venture agreements as equal owners of the mining company Debswana and of DTCB. The Botswana government has a 15 percent stake in De Beers. The potential of a trading platform means that Botswana wouldn’t need to rely on De Beers to sell all its stones. Tombale says that going forward some but not all of Debswana’s production would be sold through De Beers’ DTCB. Tombale would like a new diamond trading platform in place by the end of 2010 allowing others to trade in the country with the independent marketing of Botswana diamonds taking place a year later.

This move seems to be part of the global trend away from the stranglehold that De Beers had on the diamond market decades ago. De Beers once had absolute sway over the diamond industry, setting prices and completely controlling supply and demand. Now the market is opening at a rapid rate. For Botswana, moving away from the De Beers relationship is the next phase in its development, a way of declaring that it is part of the future diamond industry, not part of its past.

As seen in the photo above, the relationship between Botswana and its diamonds is complicated. The photo shows a protest in front of De Beers by Survival International meant to draw attention that the Bushmen of the Kalahari were pushed out of ancestral lands when diamonds were found there. While overall the stones have been good for the country's economy and citizens there are those who have suffered and had their way of life forever altered.

Eyecandy: Michelle Obama's State Dinner Earrings

Last week everyone was buzzing about First Lady Michelle Obama’s outfit at the Obama Administration’s first official State Dinner at the White House with Indian Prime Minister Manmohan Singh and his wife Gursharan Kaur. Michelle Obama wore a beautiful Naeem Kahn gown accented by the Bochic earrings shown above. The earrings are made of natural amber and rubellite tourmaline accented by rose cut diamonds. Amber is a good way to add volume to a design without too much weight because it is so light. Designers David Joseph and Miriam Salat describe the essence of the Bochic woman as the embodiment of independent spirit, confidence, style, adventure and zest for life. The designs have shown up on other high profile people including Angelina Jolie. The designers travel around the world getting inspiration from a variety of sources but I wish their website had more information on stone sourcing as well.

Are Gold Coins A Sound Investment?

I’ve talked a lot in the last year or so about the escalation of gold prices. Many people are eager to get into the gold market because they think it’s a smart investment. Gold coins have become so popular that at times the U.S. Mint has suspended sales of certain gold coins. But Jeff D. Opydyke writing for the Wall Street Journal recently reported that many buyers are overpaying. He says that while gold is up 55 percent in the past year to $1,190 an ounce some consumers are paying as much as $3,000 to dealers for gold coins called the Ultra-High Relief Double Eagles, one-ounce gold coins available from the U.S. Mint for $1,539.

Opdyke points out that smaller-denomination gold coins haven't seen premiums escalate as quickly as the bigger coins and therefore won’t take such a hit if gold prices fall. If? I say gold prices will inevitably fall and I’m not alone in predicting the inevitable pop of the gold bubble. The current level is unsustainable, a fear response to seeing stocks and real estate plummet. The entire world has started chasing the gold money, from new mines planned from Alaska to Venezuela to everyone cashing in grandma's old necklace. But in this case, nothing gold can stay, or at least stay over $1,000 an ounce.

Chasing the Big Stone: Cullinan Stones Bring In Over $9 Million In November

Why do miners spend years in backbreaking labor? Why do companies spend millions searching for kimberlite pipes and many more millions digging giant holes in the earth? It’s for returns like these. Petra Diamonds has announced that the 168 carat special white diamond recently recovered at the Cullinan mine in South Africa was sold on November 26 for $6.28 million (approximately $37,380 per carat). This stone was part of an amazing haul that included a huge 507.55 carat stone which has not been offered for sale yet and two smaller stones of 58.5 carats and 53.3 carts which were also sold this month for a total of $2.8 million. In its long history the Cullinan mine has produced more than 300 diamonds of over 100 carats and a quarter of all the world's diamonds over 400 carats. These stones are all rough so it’s not know what carat weight or shape they will take upon cutting. They’ll lose much of their carat weight as master diamond cutter spent months calculating all the angles, mapping out possible cuts on computer models and trying to figure out how to maximize both size and brilliance.

[via Mining Weekly]

A Video Look at the Vivid Pink

I've noticed that no matter how talented the photographer, it's almost impossible to catch the fire of a colored diamond in still photography. The pinks, blues, reds and greens just don't show up the way they do in real life. This video from Forbes on the $8 million vivid pink stone up for sale at Christie's Hong Kong shows a little of just how mesmerizing these stones can be in real life.

The Diamond MSRP, Will It Put Consumers At Ease?

In this recession people are even more cautious about buying jewelry, especially diamonds. There’s a certain safety in gold, or at least the appearance of safety in the form of a published price updated daily. But diamonds can be anyone’s guess. There is the Rapaport list for dealers but the average consumer doesn’t know about that. What the average consumer knows is that they buy a diamond for one price but then they can’t sell it for that price later. A diamond becomes like a car, losing value as soon as it leaves the store, but unlike a car, a diamond ring doesn’t accumulate miles of wear.

IDEX Online is introducing a new suggested retail price list for polished diamonds. The suggested retail price list was endorsed by the World Federation of Diamond Bourses during the recent meeting held in Antwerp. The new price list will be derived from IDEX Online’s live database of polished diamonds taking into account wholesale prices and retail mark-up. The price list publication will be governed by a board featuring representatives from all stakeholders, manufacturers, wholesalers, retailers and consumer advocate groups. It will be audited by a third party, a top accounting firm. The end goal here is to make customers feel more comfortable buying diamonds.

Will it work? It’s too soon to say. Some retailers are concerned that if their prices don’t fall with the Idex-specified range consumers might be afraid they are being taken advantage of. Jewelry has always been a business where the individual jeweler has had a lot of freedom to set prices. That's been a system that worked well in the era of the trusted family jeweler. But the marketplace has changed and this could be a good tool for the research-minded buyer. It occurs to me though that much as physicians have to deal with patients armed with too much information from "Dr. Google" some diamond sellers may find that their customers are trusting what they find online more than they are trusting what they are being told about a specific stone. Diamond grading is essentially a subjective act, a mix of science, knowledge and experience. Selling diamonds is similar and each stone has its own story to tell. A list of suggested prices can be valuable information but it should be the guide and not the rule.

[via JCK Online]