The deals were made at the inaugural World Diamond Conference, which was held last week in New Delhi, India. Organised by the World Diamond Mark Foundation (WDMF) in association with India’s Gem and Jewellery Export Promotion Council (GJEPC) and with support from the Indian Ministry of Commerce and Industry, the two-day conference provided an opportunity for major industry stakeholders to discuss numerous supply and demand issues.
One of the most significant events was said to have been a presentation by Indian Prime Minister Narendra Modi and Russian President Vladimir Putin. GJEPC chairman Vipul Shah described the leaders’ joint appearance as a “historic moment” for the diamond industry, adding that the two countries stood in a position of being “natural partners” given Russia is the largest producer of rough diamonds by carat and value and India is the world’s largest diamond manufacturing centre.
During his address, Modi made a number of proposals to Putin in a bid to boost the Indian diamond industry and improve Indian-Russian economic ties. He highlighted the fact that although a large majority of Russian rough diamonds eventually ended up in India, less than 20 per cent were delivered directly to the country, with most entering via Antwerp and Dubai.
One of the proposals resulted in the signing of three-year agreements between Russian diamond mining company Alrosa and 12 Indian businesses. According to Putin, Alrosa accounted for 99 per cent of diamond extraction in Russia and up to one quarter of the world’s rough diamond exports.
The contracts stipulated that as of 2015, Alrosa would supply rough directly to the Indian businesses, which included polished diamond manufacturers and jewellery manufacturers. It was said the deals would result in direct sales of about US$700 million (AU$849.7 m), with the total for the three-year period estimated to be US$2.1 billion (AU$2.5 b).
“This represents a massive five-fold hike in the current direct supplies of rough from Alrosa to India and will provide a huge boost to the Indian manufacturers,” a GJEPC statement read.
Modi also announced the Indian Government had decided to create a Special Notified Zone in an attempt to further encourage direct trade between Indian diamond manufacturers and international mining companies.
“Major mining companies can import rough diamonds on a consignment basis and re-export unsold ones [from the zone],” Modi explained. “This is going to benefit [the] Indian diamond industry and create more jobs for our youth.”
In addition, the Prime Minister requested that Putin introduce reforms permitting Russian jewellery manufacturers to export rough diamonds directly to India for polishing and then re-import without paying a duty.
“Almost 50 per cent of Russian-extracted diamonds goes to India or to companies controlled by Indian capital,” Putin commented. “Considering the serious volume of these diamond deals, it is worthwhile developing some more advanced cooperation arrangements and establishing closer cooperation between countries. Thus, we are inviting our colleagues to cut diamonds on the territory of the Russian Federation.”
Global diamond industry developments
A number of other issues were addressed during the event.
The topic of global diamond marketing was raised; with De Beers Group executive vice president of marketing Stephen Lussier emphasising that new marketing solutions would need to be adopted in order to survive in the industry.
“Retailers, Rio Tinto, De Beers are all investing in marketing, but not as much as other industries are,” he said. “We must not only increase our spend but also make what we are spending much more effective. And we need to understand consumer mindsets; we need to understand what the opportunities are.”
World Federation of Diamond Bourses (WFDB) president Ernie Blom broached the over-grading debate – an issue that had received particular attention of late due to RapNet’s decision to stop listing grading reports from European Gemological Laboratory (EGL).
Blom said the WFDB would be hosting a forum in early 2015 where representatives from key laboratories and other industry members would be invited to discuss grading standards and methodology.
In other announcements, Dubai-based Pure Gold Jewellers was named the first authorised diamond dealer under the WDMF’s accreditation program. The program was designed to sustain and improve consumer confidence for loose stones and diamond jewellery worldwide.
The next World Diamond Conference will reportedly take place in November 2015.
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