Friday, January 15, 2010

Diamonds Going Rough in Sluggish Global Economy

Amid rumors that the diamond industry is headed for a short-fall in "roughs," many analysts are looking at the situation very seriously. A new, productive diamond mine hasn't been discovered in the past 15 years and those planning to open, cant seem to get up the steam to keep going. According to RBC Capital Markets analyst Des Kilalea: "Diamond mining is a hugely expensive business and finding deposits and proving their commercial viability can take several years, as well as tens or even tens of thousands of dollars." Apparently, even if a plausible diamond mine were to be found today, it couldn't open until 2015.

In addition to high costs, the business of bringing a diamond operation "on line" is a daunting. "Botswana’s Orapa [an African] mine is on the surface and yet took four years to develop," Kilalea explained. "The Jwaneng mine, also in Botswana and of the size of mine needed to overcome a possible future supply shortfall, took 10 years to move from discovery to production. The Venetia operation in South Africa took 12 years. In Canada, the Ekati mine took 10 years to find and seven to prove and build. Even roads to the mines – which may open for only a few weeks a year – can cost $20 million to build."

This is the source of the problem. It appears that despite investments of hundreds of millions of dollars in global exploration, the diamond industry has thus far failed to discover sufficient commercial diamond deposits to replace existing finite mines. As a result, production is projected to remain essentially flat for at least the next decade. Even the new mines able to come on stream will not make up for the shortfall as older mines become depleted.

Said Kilalea of RBC: "The Argyle mine in Australia that used to produce 30 million carats is now down to half that amount.

The four largest producers – De Beers, Alrosa, Rio Tinto and BHP Billiton – account for 90 percent of total diamond output, while smaller players include Harry Winston Diamond Corp, Petra Diamonds, and Gem Diamonds. “A host of mid-tier and juniors kick in the rest; they are small and often not well financed,” Kilalea said. Of the more than 100 firms involved in diamond mining, fewer than 20 have “meaningful production,” Kilalea added.

Also working against productivity is the terrain. The world’s diamond mining is concentrated in a few areas which are not at all hospitable. These include Canada’s frigid North West Territories, and Russia’s equally frigid Far East. Deposits are to be found in a range of African countries other than Botswana. However, in some cases, wading through the waters of questionable governance is as difficult as cutting through glacial ice. Some forecasters believe this opens a window for style experimentation, such as cutting overall costs by dealing with diamonds in the rough. Take the excellent examples of rough-style diamond rings (pictured above) created by Sruli Recht, a self proclaimed 'nomad' with a passion for making "ugly things beautiful." Others think the possible short-fall in diamond production leaves room for the simulated market to expand, while others would argue that there is no replacement for a "real diamond."

Still, whatever the shortfalls or the pitfalls, or the prognostications or procrastinations, one thing is crystal clear: the diamond industry isn't going away. And there is good news: If production improves, the demand for quality diamonds is quite strong. Not only is it good, but its growing. Markets like India and China are clamoring for these stones!

Said diamond industry analyst Ken Gassman said, "You can't turn around a love affair [of making and buying jewelry] the human race has had for 50,000 years. "

And new discoveries are being made every day. One of the largest high quality diamonds to date was found last fall in South African by Petra at the Cullinan mine which, as luck would have it, unearthed the world's largest diamond over 100 years ago. The 507 carat stone could be worth in excess of 20 million dollars.

Sources: Elran Diamonds
Teumim Enterprise
BBC News

Wednesday, January 13, 2010

Don't MIss The Geotourisum Summit in DC..... If There is Still Room

Phone: 202-828-8044, Email: ...We're giving you the 411 right up front, because you just MIGHT (we said might) be able book passage to the hottest ticket this winter--National Geographic's Geotourism Summit on February 2, 2010! The event actually kicks off on February lst with ambassador training on sustainable tourisum, and the site says has they've added a few more slots. The activities also include a lecture with author James H. Gilmore, conversations with industry experts and U.S. Department of Commerce. There's a side visit to the Terra Cotta Warriors exhibition as well to see those incredible soldiers made 2,00o years ago to guard China's first emperor. To help you field your footing, the Geotourism site lists the closest hotels and a map.
To get there....Click here. To buy the Terra Cotta Warriors book...Click here.

Wednesday, January 6, 2010

The Art of Dressing in Broken Porcelain

Li Xiaofeng of China has finally come up with the definitive use for broken porcelain. Don't throw it out, he says--wear it! Xiaofeng collects and connects pieces of antique china shards with

silver thread creating one-of-a-kind dresses and men's jackets that trendsetters are sporting all over the globe. The works of recycled couture by this Bejiing artist are harvested from the selected remnants of Ming, Qing and Song dynasty vases, broken shards he grinds down, hand polishes, and then sets on pieces of leather lining. Amazingly enough, these glass outfits are not purely window dressing they are fully wearable pieces of art that celebrities like Lady Gaga have gone--well--gaga over!

Source: Linda Lucille