Rough Diamonds Global Production Charts for 2014

2014 PRODUCTION

By Volume (cts) Total = 124,778,468.08

Other 20%

Russian Federation 31%

Australia 7%

Canada 10%

Congo, Democratic Republic of 12%

Botswana 20%

By Value (US $)
Total = $14,495,806,402.06

Other 18%

South Africa 8%

Angola 9%

Botswana 25%

Russian Federation 26%

Canada 14%

Source: Kimberley Process Certification Scheme

Rough Diamonds Production Per Country for 2014

Here is a summary of the Rough Diamonds Production in CTS per Country for 2014:

  1. Russia with 34,303,500 CTS Produced
  2. Botswana with 24,668,090.77 CTS Produced
  3. Democratic Republic of Congo with 15,652,014.63 CTS produced
  4. Canada with 12,011,619 CTS Produced
  5. Australia with 9,288,231.89 CTS Produced
  6. Angola with 8,791,340.01 CTS Produced
  7. South Africa with 7,430,955.94 CTS Produced
  8. Zimbabwe with 4,771,636.82 CTS Produced
  9. Namibia with 1,917,689.70 CTS Produced
  10. Sierra Leone with 620,181.11 CTS Produced
  11. Lesotho with 346,017.12 CTS  Produced
  12. Tanzania with 253,180.25 CTS Produced
  13. Ghana with 242,259.59 CTS Produced
  14. Guinea with 164,058.72 CTS Produced
  15. Guyana with 99,950.34 CTS Produced
  16. Liberia with 65,822.49 CTS Produced
  17. Brazil with 56,923.25 CTS Produced
  18. Republic of Congo with 53,162.70 Produced
  19. India with 37,024.72 CTS Produced
  20. Cameroon with 3,718.16 CTS Produced
  21. Cote d’ Ivoire with 1,074.15 CTS Produced
  22. Togo with 16.72 CTS Produced

The Total World Diamond Production for 2014 was 124,778,468.08 CTS

Source: Kimberley Process Certification Scheme

Antwerp Keeps Loosing Influence as Top Diamond Hub

There are many reasons why Antwerp is on a down slope in the diamond industry. The first reason, is that you must pay 33.33% entry tax on the value of the diamond parcel you are bringing in from outside the European Community, regardless of the fact that you already paid for KPC’s in the Country of origin, so if you purchased rough diamonds in Angola for example, who has a 31% KPC tax rate, and want to import your rough diamonds to Antwerp, you will pay a double tax equating to over 64% of the rough stones’ value.

This will turn out to be the number one reason why Antwerp will ultimately be over run by cities like Dubai, where you have no double taxation, but at the end of the day, the responsibility for the upcoming slide of Antwerp will fall on the Belgian Government for these poor strategic decisions.

Another large nail in the coffin came this week, with the National Bank of Fujairah, owned in parts by the governments of Fujairah and Dubai, two of the seven sheikhdoms in the U.A.E., whom entered the diamond financing market in Antwerp roughly six months ago in order to capitalize on the shift in trade, targeting loans between $5 million and $50 million. The Bank will stop its operations in Antwerp and will focus on the Dubai market, which serves India as its principal client.

Diamond buyers will face a lack of financing after Antwerp Diamond Bank, the lender serving the industry for about 80 years, winds up its operations, removing close to $1.5 billion in funding to the industry. ABN Amro Bank NV and Standard Chartered Plc also curbed funding to the industry in Antwerp.

The Challenges of The Rough Diamond Industry

Sellers and Buyers of Rough Diamond can often agree when negotiating a parcel of rough stones, that usually is the easy part, so what is the hard part?

The overwhelming majority of miners, located mostly on the African continent are mining rough diamonds and have stock piled these rough diamonds over the last few years, so lots of miners have stones, some nicer than others.

The issues are several folds, first, most miners have smaller productions in small villages, and do not know how to go about exporting to a foreign rough buyer, nor do they know any foreign rough buyers most of the time.

The second issue is that they do not have the cash flow to pay for the KPC’s all transport costs, tickets, hotels etc etc, so they can only sell the stones on an FOB basis and will not sell CIF.

The large wholesale buyers will tell you they have been around for too long to go and buy stones FOB, most of them will only purchase on a CIF basis in one of the major diamond hubs such as New York, Antwerp, Dubai, Geneva, Tel Aviv, Numbai or Hong Kong.

DRC Ministry of Mines Licenses

Latest updates from the DRC’s Ministry of Mines are as follows:

The Ministry of Mines has issued roughly 200 purchases & sales licenses, out of these 200 licenses issued in the DRC, only 15 to 20% of licensees have their licenses up to date.

The rest leases or sub lease other people’s license. There are only 30 to 40 companies in the DRC with up to date valid licenses, out of which 50% of these have export licenses, reducing the amount of licensees who can legally export diamonds from the DRC to 15 to 20 companies in the whole Country.

In our experience, the DRC is a very difficult place to do business and purchase diamonds, further more, we find DRC seller’s prices to be completely out of line with the rest of the African market, and fraud to be as high as it can get.

For these reasons, we have made the conscious decision to stay away from DRC Diamonds all together, doing business there is too challenging for our taste. If you decide to do business in the DRC, make sure you have proper security with you, and be ready to pay a premium price.

Kimberley Process Scheme List of Participants

Kimberley Process Scheme List of Participants and Offices Responsible to Issue the KPC’s in Each Countries.

This list revises the previously published list of October 31, 2011, to add Cambodia, Cameroon, Kazakhstan, and Panama to the list of Participants in the Kimberley Process Certification Scheme.

Angola—Ministry of Geology and Mines.

Armenia—Ministry of Trade and Economic Development.

Australia—Exporting Authority—Department of Industry, Tourism and Resources;

Importing Authority—Australian Customs Service.

Bangladesh—Ministry of Commerce.

Belarus—Department of Finance.

Botswana—Ministry of Minerals, Energy and Water Resources.

Brazil—Ministry of Mines and Energy.

Canada—Natural Resources Canada.

Cambodia—Ministry of Commerce.

Cameroon—National Permanent Secretariat for the Kimberley Process in Cameroon

Central African Republic—Ministry of Energy and Mining.

China—General Administration of Quality Supervision, Inspection and Quarantine.

Democratic Republic of the Congo—Ministry of Mines.

Republic of Congo—Ministry of Mines.

Croatia—Ministry of Economy.

European Union—DG/External Relations

Ghana—Precious Minerals and Marketing Company Ltd.

Guinea—Ministry of Mines and Geology.

Guyana—Geology and Mines Commission.

India—The Gem and Jewelry Export Promotion Council.

Indonesia—Directorate General of Foreign Trade of the Ministry of Trade.

Israel—The Diamond Controller.

Japan—Ministry of Economy, Trade and Industry.

Kazakhstan—Ministry of Finance.

Republic of Korea—Ministry of Commerce, Industry and Energy.

Laos—Ministry of Finance.

Lebanon—Ministry of Economy and Trade.

Lesotho—Commissioner of Mines and Geology.

Liberia—Ministry of Lands, Mines and Energy.

Malaysia—Ministry of International Trade and Industry.

Mauritius—Ministry of Commerce.

Namibia—Ministry of Mines and Energy.

Mexico—Economic Secretariat.

New Zealand—Ministry of Foreign Affairs and Trade.

Norway—The Norwegian Goldsmiths’ Association.

Panama—National Customs Authority.

Russia—Gokhran, Ministry of Finance.

Sierra Leone—Government Gold and Diamond Office.

Singapore—Singapore Customs

South Africa—South African Diamond Board.

Sri Lanka—National Gem and Jewelry Authority.

Swaziland—Office of the Commissioner of Mines.

Switzerland—State Secretariat for Economic Affairs.

Chinese Taipei—Bureau of Foreign Trade.

Tanzania—Commissioner for Minerals.

Thailand—Ministry of Commerce.

Togo—Ministry of Mines and Geology.

Turkey—Istanbul Gold Exchange.

Ukraine—State Gemological Centre of Ukraine

United Arab Emirates—Dubai Metals and Commodities Center.

United States of America—Importing Authority—United States Bureau of Customs and Border Protection;

Exporting Authority—Bureau of the Census.

Vietnam—Ministry of Trade.

Zimbabwe—Ministry of Mines and Mining Development.

Rough Diamonds Import Requirements Into The USA

The requirements for importing in compliance with the KP are as follows:

  • All imports and exports of rough diamonds must be accompanied by a Kimberley Process Certificate (KPC).  The original KPC must be with the actual merchandise; copies will not suffice.
  • Imports of rough diamonds must be in a sealed tamper-resistant container.  A tamper-resistant container is defined as “packaging having an indicator or barrier to entry that could reasonably be expected to provide visible evidence that tampering had occurred.  For example, packaging such as a re-sealable sandwich bag is not deemed tamper-resistant.  Further, standard mailing and express consignment packaging alone is not considered as tamper-resistant.”

Rough diamonds may only be imported from, or exported to, countries that are participants in the KimberleyProcess and are not subject to further US restrictions.  The recent FR notice can be found here that lists all Kimberley participants and those countries subject to US restrictions.

  • All shipments of rough diamonds shall not be released from the custody of Customs and Border Protection (CBP) except by a formal entry for consumption (this is the step that involves a customs broker).
  • Importers must fax a copy of all Kimberley Process certificates ( U.S. KPs and those received from other countries) to the U.S. Census Bureau at: 1-800-457-7328.

o       This must be faxed after the arrival or export without delay.

  • Rough Diamond importers and exporters must retain records of all Kimberley Process ( U.S. and foreign certificates for five years).
  • An annual report must be filed with the Department of State by April 1, that report summarizes the previous year’s activity.  The attached brochure contains the message that I read to you about this requirement.

Rough diamonds are unconditionally duty free, but a merchandise processing fee will apply.  That fee currently does not exceed $485, and is calculated by multiplying the value of the merchandise by .3464%.  There will be fees from the customs broker associated with filing a formal entry.

Several African Countries Enforcing FOB Transactions To Protect from Money Laundering

There is a clear trend in African Counties such as Sierra Leone, DRC, Zimbabwe and others to attempt to control diamonds transaction on an FOB basis for various reasons.

Countries like Zimbabwe are more interested in job creation and the additional employment created as a result of closing diamond transactions in Harare, thus circulating more money into the local economy.

Countries like Sierra Leone on the other hand are trying to curve the money laundering, as banks and or KPC issuing institutions in these Countries such as the GGDO, now want to know who the buyers are, and the anti money laundering departments want to make sure they receive a copy of the person’s passport.

They will usually authorize a CIF transaction AFTER the Buyer is in the system (usually 1 to 3 transactions done on an FOB basis first). At that time a CIF transaction will be permitted for exports.

In the DRC, the banks will usually authorize a CIF transaction after 3 transactions have been done on an FOB basis, unless the Buyer is willing to issue a bank to bank swift.

Rough Diamond Prices on a Downwards Trend For the Last Few Weeks

With some of the largest mining companies slashing their prices by 10% and more, and the pressure on these companies from the Indian market to keep prices low, prices are going down.

This softer market is unlikely to remain for the long term as demand in Asia is expected to pick up within the next 6 months. Despite the lower global production in 2014, most of the major producers like Russia and Botswana’s productions have increased.

Rough Diamonds will always remain a strong commodity on the global market and despite fluctuations in value like all other commodities,  the core value of the asset will always be strong.

Global Rough Diamond Production Down 3.8% in 2014

The KPC’s Annual Global Summary reveals that the Russian Federation is still strong #1 in CTS volume, with 38,303,500 CTS produced in 2014. Distant second in volume only is Botswana with 24,668,090 CTS, however, Botswana almost catches up to the Russian Federation in value, with a production of $3,646,952,179 against $3,733,262,920.

With a global production of 124,778,468 CTS in 2014, we can clearly see a global decrease in production from 2013 of 4,983,573 CTS. This trend downwards equates to a 3.8 % reduction in production.

Now keep in mind that these numbers are for stones with KPC’s only, this does not include diamonds mined and circulated on the black market.