Connect with us
Advertisement

Positive forecast for the diamond industry in 2020

Following a subdued trading year for the global diamond industry in 2019 owing to US –China trade war amongst other factors, the multibillion dollar lucrative business is set for steady recovery in the year 2020.  This is according to Rapaport Group, a United States based diamond industry think tank.

In a communiqué dispatched from Las Vegas on Tuesday, the company shared that Diamond market conditions improved in December as US and Chinese holiday demand helped raise sentiment.  Polished prices stabilized and improved for sizes under 1 carat, supported by shortages of G+, VS2+ goods. However High-end qualities (F+, VVS+) of 3 carats and larger diamonds remain weak, According to Rapaport’s RapNet Diamond Index, 1-carat diamonds slid 0.2% in December and 5.3% for the full year. The index for 0.30- and 0.50-carat stones firmed in the fourth quarter following steep declines earlier in the year 2019.

2019 Downturn

Rapaport observed in the report that the market in 2019 was supply-driven, an oversupply of diamonds set a negative tone, leaving the trade with numerous diamonds that were difficult to sell. Inventory levels declined in the fourth quarter of 2019, but there were a lot of lower-quality goods still available at the end of December. The Las Vegas diamond business behemoth further says the year also saw a change in consumer patterns with multi-channel jewelry shopping and online diamond trading gaining momentum.

“That gave buyers access to larger inventories and more information about the goods, enabling them to cherry-pick the best-quality stones and leaving the trade with large quantities of less desirable merchandise.” The industry in 2019 also endured tight manufacturing profits, a reduction in bank credit, and cautious Far East demand resulting from uncertainty about the US-China trade war and Hong Kong protests.

De Beers’s low sales

The year 2019 presented a difficult sales path for many companies including diamond mining giant De Beers Group, the lucrative industry behemoth sold about $1.36 billion less worth of polished diamonds. In the year 2018 De Beers’s rough diamonds sales amounted to US$5.39 Billion, approximately P54 Billion, this was a slight pickup from the 2017 sales value of US$5.31 Billion. For the year 2019 the company‘s entire  ten cycles only gathered total sales provisional value of US$4.04 billion, way below the 2018 value by about $1.35 billion (around P14 billion) mirroring a 25 % decrease.

Following 2019 revised full year production guidance to approximately 31 million carats of diamonds down 11 percent from 35 million last year, De Beers’s parent company Anglo American further cut its diamond production forecast for the next two years.  In 2020, it expects De Beers will mine 32-34 million carats, down from its previous outlook of 33-35 million. For 2021, the forecast was cut from 35-37 million carats to 34-36 million carats. Production guidance for full year 2022 is 33 to 35 million carats. De Beers however closed the year with slight signs of recovery with their 10th cycle registering improved sales when compared to the previous cycles during the year.

The 2020 Recovery

Going into 2020 Rapaport says there is some optimism for the new decade. The company says the industry can expect lower rough supply, market consolidation, and further changes to the way diamonds are bought and financed aswell as greater use of technology.
Rapaport further predicts that there will be more emphasis on ethical sourcing, and segmentation of lab-grown and natural diamonds into distinct markets.

According to the Las Vegas based experts to navigate these trends and bring about an upswing in diamond prices, the industry must invest in marketing and develop more efficient processes and inventory management. “Diamond jewelry sales must outperform the last decade’s and should exceed $100 billion by 2030” forecasts Rapaport.

The Rapaport Group is an international network of companies providing added-value services that support the development of ethical, transparent, competitive and efficient diamond and jewelry markets. Established in 1976, the Group has more than 20,000 clients in over 121 countries.

Group activities include Rapaport Information Services, providing the Rapaport benchmark Price List for diamonds, as well as research, analysis and news; RapNet – the world’s largest diamond trading network, with over 15,000 members in 97 countries and daily listings of approximately 1.3 million diamonds valued at approximately $7.4 billion. Part of the Group is also the Rapaport Laboratory Services, providing GIA and Rapaport gemological services in India, Israel and Belgium; and Rapaport Trading and Auction Services, the world’s largest recycler of diamonds, selling over 500,000 carats of diamonds a year.

Continue Reading

Business

Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

This content is locked

Login To Unlock The Content!

Continue Reading

Business

Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

Continue Reading

Business

Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

Continue Reading