Working to promote their own diamond products made from the highest quality raw materials

The fact that prices for rough diamonds will increase in the short term will not be doubted by almost all professional participants of the diamond market. However, no one dares to give an accurate forecast - how the price will grow depending on the quality of the raw materials. Analysts and representatives of large companies prefer to limit themselves to general formulations, like recently expressed by representatives of Rio Tinto that "between 2008 and 2016, the demand for diamonds will significantly exceed the supply." Meanwhile, the polished diamond market in the second quarter of 2008 has already shown a curious trend: the prices for large diamonds with high characteristics increased sharply (from 10% to 15% for stones of excellent grade with weight from 1 to 3 carats and above), and small diamonds remained Practically unchanged. Looks like,

There are at least three serious factors suggesting that in the foreseeable future it will be possible to observe an exponential increase in prices - but only for large-scale high-quality raw materials, but the fate of the "Indian product" seems unenviable. Among such factors are the following:

- The processes of vertical integration in the industry continue to develop, practically all major producers of raw materials: De Beers, ALROSA, Rio Tinto, Harry Winston Diamond Corporation (formerly Aber Diamond Corporation), Leviev Group are working to promote their own diamond products made from the highest quality raw materials controlled They deposits, so the supply of this raw material on the market decreases;

- the share of small-sized low-quality raw materials in the section of current extraction of the main indigenous deposits increases;

- Dealers working with the "Indian goods" created a huge speculative bubble - an uncontrolled runoff, roughly equal to the world's annual production of raw materials of this class. Lobbyist efforts of dealers allowed to get bank loans for these diamonds, and money went to branches that are more attractive than lapidary. Analysts of financial markets give a rather negative forecast for the development of leading US banks for the second half of 2008 - their shares are falling rapidly against the backdrop of soaring oil prices and depressing information from the US labor market. Of course, this process can not but affect the banks of India and South-East Asia, forced like their American counterparts to get rid of "bad" loans and unreliable assets. Therefore, the probability that in the autumn the diamond pledge will be thrown out on the market and the prices for "

Against this background, events in the Russian diamond market are very noteworthy. ALROSA is in no hurry to hold a traditional auction for diamonds weighing more than 10.8 carats, obviously waiting for the moment when prices reach another historic high. And on May 26, 2008, Russian President Dmitry Medvedev signed Decree No. 848 "On Amendments to the Regulations on the Diamond Fund of the Russian Federation ...". Changes are made only in two sub-items, but their meaning significantly changes the practice of trade in rough diamonds in Russia and reflects the main trend of the global diamond market for a sharp rise in price of high-quality raw materials.

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De Beers, which usually could maintain high prices for diamonds, limiting their supply

After more than two decades, diamond prices have experienced unceasing growth amid strong demand, the global diamond business is now experiencing difficulties along with other luxury industries, the International Herald Tribune reported . However, the diamond industry is different from other industries that produce goods from the luxury category, in that it depends on a single product. And this product is no longer under the control of the company De Beers, which usually could maintain high prices for diamonds, limiting their supply.

Hopes that the richer India and China will be able to fill the fall in demand were crossed out as soon as the recession reached Asia, causing the prices for diamonds to slide down by about 30% compared to their peak last August.

De Beers, in which mining giant Anglo American owns 45 percent of the shares, itself controls about 40% of the diamond market. In January of this year, De Beers said that by April it will cut production of rough diamonds by almost 50%.

The De Beers division recently placed on the shelf a deal to acquire a half stake in the Russian diamond mining company due to the financial crisis; Another daughter, De Beers, recently terminated a production agreement at a mine in South Africa.

Difficulties experienced by other diamond producers. ALROSA, the Russian state-owned company that produces diamonds, sharply declined in December last year due to falling demand.

However, the seeds of the current turmoil in the diamond industry were sown before the economic crisis, due to the fact that the producers of these precious stones accumulated large stocks of them and climbed into excessive debts.

The immediate outlook for the industry may look bleak, but some analysts argue that once the excessive amount of diamonds produced passes through the system, prices will recover. If new deposits of diamonds are not discovered, Tacy expert Haim Even-Zohar believes, the newly mined diamonds in the world will end in 20 years.

As soon as demand is restored, any shortage of diamonds will force prices to move up and force them to resume mining of these stones. "The long-term prospects look good," Haim Even-Zohar points out. "However, in the near future, countries and their people will experience difficult times."

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Although representatives from the Kimberley Process have not been to Zimbabwe

A Kimberley Process group recently visited Zimbabwe for inspection purposes, seeking, inter alia, to determine whether there had been massacres in Marange during a raid last year by security forces on participants in illegal diamond mining.

Although representatives from the Kimberley Process have not been to Zimbabwe for the first time to investigate the circumstances of this diamond battles, the most recent visit was followed by a concerted effort by some non-governmental organizations such as Partnership Africa Canada (PAC) to halt the participation of this South African Country in the Kimberley Process, an organization created to stop the flow of conflict diamonds - raw diamonds used by the rebel movements for the financial nancing wars against legitimate governments.

It seems that the call to suspend Zimbabwe's participation in the Kimberley Process is caused not by the flourishing illegal mining of diamonds and the smuggling of precious stones by the glitzers into countries such as South Africa, after which they are sold as legal stones.

"The government of Zimbabwe, which is not alien to violence, killed dozens of miners engaged in artisanal crafts in alluvial deposits of diamonds, in order to clear these areas of the country from them. There was no response to urgent requests for action by non-governmental organizations and industry observers in the Kimberley Process, supported by several governments and the European Union. In November 2008, the Zimbabwe Armed Forces used force to purge the Chiadzwa deposit (in Marange) from diamond miners. The media reported that more than 50 people were shot and killed, many of them being shot from helicopters. This action was condemned by the organization Zimbabwe Lawyers for Human Rights (Zimbabwe Lawyers for Human Rights) and many others, "PAC said.

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Diamond business is a very serious sector of the economy

The recent decision of the Government of Flanders to support the Belgian diamond industry was already the third similar action on the world market after Russia and Angola. For those subjects of the market in which the diamond business is a very serious sector of the economy and who at one time delegated some of their opportunities to regulate the market to a global monopolist - De Beers, objectively there is no other choice. Even absolutely loyal De Beers countries, such as Botswana, have expressed a desire to increase the cost of their participation in implementing anti-crisis solutions from the national budget through increasing their share in the share capital of the diamond corporation.

State guarantees are a tool to support the industry with a relatively high production cost in the countries of extraction of rough diamonds and to preserve the role of the traditional diamond center of Antwerp. That is, in fact, participants in the market of rough diamonds, located on different sides of the pipeline, came up with similar initiatives in the interests of preserving the market and freeing it from speculative ballast.

How can this affect the prospects for the development of the market?

It is obvious that state guarantees require banks themselves to understand the creditworthiness and stability of their clients' business for a long enough perspective. This, in turn, stimulates non-speculative market participants to secure bank guarantees of their future that are sufficiently firm for banks, and such long-term contracts with extractive companies are such guarantees. No abilities and talents of working on the open market of raw materials are sufficient grounds for the bank's credit committee. The legal obligations of the raw material producer are guaranteed by the potential borrower.

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Main role of gold is the role of the stabilizer of financial markets

It is obvious that, as before, the main role of gold is the role of the stabilizer of financial markets. Gold is to a lesser extent industrial metal, and therefore the price of gold as a result of the crisis has not subsided. It would seem, on the contrary, the price should have risen to the level of $ 1000 / ounce, but a sharp decline in the consumption of jewelry, especially in the large markets of the US and India, which was not compensated by the increased demand in investment markets (in the form of ingots and coins) , Did not allow the price to rise.

The price of gold, as we expected in February of this year, will remain in the range of $ 900- $ 950 per ounce by the end of the third quarter, approaching $ 1000 / ounce in the fourth quarter.

The price of gold will also be supported by the fact that problems with real producers from South Africa and Australia will lead to a decrease in the total gold production in the world, despite their growth in Russia and the United States.

Moreover, the resource of the secondary market (ie gold from scrap) has already been substantially developed in 2008.

Much will depend on the value of the dollar and ways to exit the US from a permanent budget deficit.

If the new government continues to move along the path of pumping economy with printed money, then we should expect a sharp rise in gold prices - above $ 1000 / ounce. So investing in tokens and ingots of gold will never be superfluous, especially in the long term.

We can only say that the price of silver, although it follows gold, is much more volatile, and its growth rates significantly exceeded the growth rates of gold prices over the past five years.

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The exports and imports of rough diamonds and diamonds in Antwerp in June 2009 were lower than in the same period last year, but the rate of decline in exports and imports was lower than the average decline recorded during the first half of 2009, the Antwerp International Diamond Center (AWDC), granted to the agency Rough & Polished. This trend is especially well observed with regard to rough diamonds, while in the diamond sector it is less noticeable.

According to AWDC, in June, 659,320 carats of diamonds were exported to the amount of $ 755.5 million, which means a 7.2% decrease (in physical terms) and 35% (in value terms) as compared to the same period of 2008. According to consolidated data for the first half of the year, polished exports fell by 23.9% in physical terms and by 38% in value terms compared to the same period in 2008.

The average price per carat for a diamond fell significantly during the reporting period, to $ 1145 in June 2009 (against $ 1,635 in June 2008), which represents a nearly 30% decrease. However, while the average price per carat in June 2009 was only $ 5 higher than the average price of carat for the first half of the year, the price per carat of the diamond in June 2008 was as much as $ 236 higher than the average price for the first half of 2008.

The state of the Antwerp diamond market is very ambiguous. The US market did not show any significant changes, and the volume of polished imports in the US from Belgium fell 39.3% in value in June, which is much the same as a 40.2% drop in polished purchases during the whole semester. A similar situation with purchases of diamonds from Belgium is observed in Hong Kong.

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Official unemployment in the US reached a level of 9.5% - a record for the past 25 years. It should be borne in mind that during the Clinton administration the methodology of the level of unemployment calculation was changed, if using the "Reagan" standards, then unemployment in June 2009 in the US should be estimated at 16.5%. This is an unprecedented indicator since the end of the Second World War. Unemployment in the Eurozone also reached the level of 9.5% - this is a ten-year record. In Japan, the unemployment rate was 5.2% - a five-year record. The dynamics of the unemployment rate continues to be negative, a positive decrease in the rate of its fall is already considered positive.

The United States, Japan and the Eurozone collectively consume about 80% of diamond jewelry, with the main weather in this market being made by the middle class, who suffer the most from growing unemployment. The growth of unemployment and the condition of the diamond market are in a stable correlation to each other - in the first half of 2009, polished imports in the US declined by more than 50% compared to the same period last year, imports into Japan fell by more than a third.

So far, there is no reason to say that the US, Japanese and Eurozone economies will recover to pre-crisis levels in the next 1.5 to 2 years. On the contrary, there is a steady tendency to revise forecasts in favor of pessimistic scenarios, since it is already clear that mass layoffs and salary cuts will quickly lead to a reduction in the purchasing power of the population, to a reduction in demand, which in turn leads to a reduction in production - The spiral leading to the abyss. Attempts to get out of this spin by pumping liquidity in the banking sector so far allowed only to slow down the process, but did not lead to a radical solution to the problem - voices about the forthcoming fall of the second wave of the crisis, the rapidly growing deficits of national and corporate budgets are being voiced.

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Many prominent representatives of the diamond-diamond complex are inclined to believe that the market has finally reached the bottom and will unfold in the very near future. Sinks dissolve, the demand for diamonds starts to grow, which allows us to hope for price recovery within 3 - 4 months to a level that provides a positive profitability of mining. It is expected that at the next DTC site will be sold rough diamonds for $ 700 million, and by Christmas or a maximum in the first quarter of 2010, the market is stabilizing at price levels, about 30-40% higher than the February lows of this year. If this blissful scenario miraculously becomes a reality, then it must be recognized that the diamond market is the braver of all the others coping with the global crisis; Therefore, its current structure fully meets the requirements of the time and,

Opponents draw not so rosy picture. Analysts at Frost & Sullivan believe that demand for rough diamonds will not increase in either the short or medium term, and diamond production in Africa will continue to decline steadily for at least another year and a half. This view is shared by analysts at Royal Bank of Canada Capital Markets (RBCCM), who argue that the bottom has not yet been reached by the market. With the colleagues from RBCCM, the representatives of the Israeli banking community are clearly in agreement, having reduced lending to the lapidary industry by more than 30%. Banks do not believe in a rapid recovery in demand for diamonds, and we must admit that they have objective reasons for this. In the US, unemployment has reached an unprecedented level in the past 25 years, the Japanese economy is falling even faster than the American economy - the purchasing power of the population of these countries, Which accounted for about 60% of the diamond products market, continues to decline. The first quarter of 2009 showed an unprecedented drop in profits of companies owning world jewelry brands (Tiffany & Co., for example, showed a net profit of 62.7% worse than in the same period in 2008). China is unlikely to be able to compensate for this gap at least somehow - while we can observe energetic (albeit not too successful, as in the case of Rio-Tinto) attempts by China's sovereign funds and companies to acquire raw materials around the world, but not to stimulate Domestic demand. Exports, which gave up to 50% of China's GDP, have now halved, and the real number of unemployed is approaching the 40 million mark. The first quarter of 2009 showed an unprecedented drop in profits of companies owning world jewelry brands (Tiffany & Co., for example, showed a net profit of 62.7% worse than in the same period in 2008). China is unlikely to be able to compensate for this gap at least somehow - while we can observe energetic (albeit not too successful, as in the case of Rio-Tinto) attempts by China's sovereign funds and companies to acquire raw materials around the world, but not to stimulate Domestic demand. Exports, which gave up to 50% of China's GDP, have now halved, and the real number of unemployed is approaching the 40 million mark.

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Ian Smillie, one of the architects of the Kimberley Process (KP), announced his withdrawal from the leadership of the NGO Partnership Africa-Canada. On June 2, 2009, he gave an interview to the newspaper Le Temps, in which he linked his resignation with the extremely low efficiency of the CP in a number of diamond-producing countries: Brazil, Cote d'Ivoire, Ghana, Venezuela, Zimbabwe, Guinea, as well as uncontrolled diamond traffic In the Middle East - in Lebanon. In fact, Ian Smilli acknowledged the failure of the KP Certification Scheme, confirming the possibility of acquiring KP Certificates by shadow dealers using corrupt schemes and even describing the approximate cost of such a transaction: "For a person with rough diamonds worth several tens of millions of dollars, paying $ 50,000 for a Kimberley certificate is nothing".

We could discuss with Ian Smilli about the size of the bribe - according to our information, in the countries he mentions in his interview, as well as in dozens of other, equally civilized member states, getting the notorious certificate costs the smugglers ten times cheaper. But this does not change the fundamental picture, and we willingly agree with the disappointed Ian Smilli that the KP was ineffective in achieving the declared goals. Since there is no secret to this unfortunate circumstance for a long time, it would be very interesting to answer the question - why did I see Smilly's epiphany right now, during the unprecedented crisis of the diamond market?

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To develop an effective strategy for the development of Russia's ABK in a crisis, new methods and models are needed to predict the further development of the global diamond business. The global financial crisis affected the condition of the diamond pipeline in 2008, but 2009 will be even more indicative. It is likely that the relationship between the main parts of the diamond pipeline can drastically change.

To determine their values, the three main components of the global diamond pipeline - the sale of diamonds, diamonds and diamond jewelry in 2001-2008 - were analyzed using a three-component diagram that is commonly used in physical chemistry and metallurgy in the study of multiphase systems (Figure 1) . Analysis of the chart shows the growth in the share of the diamond mining industry up to 2005, with an almost constant share of the lapidary industry (falling out of the point in 2005 means a crisis in the diamond-border segment). Further, the share of the diamond jewelry sales segment is growing. Undoubtedly, the economic crisis will lead to a decrease in diamond sales.

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The only positive moment of the unprecedented crisis, in which the diamond market is today, is a sharp activation of the participants in the search for new solutions and models that allow for an effective restructuring that meets modern challenges.

One of the creative breakthroughs may be a joint initiative of the MC "Leader" and ALROSA on the organization of the investment diamond market. Despite the obvious difficulties associated with the need to create a practically "from scratch" the ramified infrastructure of such a market, this idea looks extremely attractive, as it allows to circumvent the known objective limitations, due to which the diamond can not act as an exchange commodity, and get the full tools of the stock market in The form of closed mutual funds, the units of which will be provided with the cost of investment grade diamonds. It remains to be regretted that such a program was not implemented two years ago, when the stability of the trend for raising prices for diamonds and diamonds could not cause any doubts among potential investors.

The main argument in favor of creating a market for investment diamonds is the assertion that the price for large (from 3 carats and above) stones with good characteristics has almost continuously grown in the foreseeable historical retrospect, and therefore such assets are the coveted "quiet harbor" for the investor. With minor reservations - for example, the need to correlate the rise in prices for diamonds and diamonds with the level of inflation - this statement can be considered fair. But what was the reason for this permanent growth? The main, and probably the only reason, was the very specific organization of the global diamond market - a single-channel "diamond pipeline", the ability to manage pricing, regulating the supply of raw materials at the entrance. The abandonment of such an organization quickly enough - for several years - led to the inflating of huge speculative bubbles, to the emergence of uncontrolled drains, to the paradoxical situation when raw materials began to cost more than finished products. It is hardly a big exaggeration to say that the cause of the current crisis in the diamond market is not so much the global economic crisis as the destruction of the canonical single-channel system. The coincidence of these negative phenomena over time has produced a resonance effect, and therefore the diamond market looks much worse today than all other commodity markets. That the reason for the current crisis in the diamond market is not so much the global economic crisis as the destruction of the canonical single-channel system. The coincidence of these negative phenomena over time has produced a resonance effect, and therefore the diamond market looks much worse today than all other commodity markets. That the reason for the current crisis in the diamond market is not so much the global economic crisis as the destruction of the canonical single-channel system. The coincidence of these negative phenomena over time has produced a resonance effect, and therefore the diamond market looks much worse today than all other commodity markets.

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A sharp jump in prices for large-scale and high-quality rough diamonds caused lively polemics in the professional environment. As objective reasons, representatives of the leading mining companies are called: the need to switch to a subterranean mode of production, at which the prime cost of diamond products increases substantially, as well as the decrease in the share of quality raw materials in the current production cutoff due to the depletion of the main indigenous deposits. Both factors are in principle recognized by opponents representing the lapidary industry, but the rate of price growth causes at least perplexity in this camp - against the background of extremely weak jewelry markets of the USA, Japan and Europe, an adequate increase in diamond prices looks unlikely and expensive raw materials will cause the industry to work long "To the warehouse," which can lead to losses of critical dimensions.

Is the amplitude of the June jump in prices an artifact caused by short-term subjective or, perhaps, speculative reasons or before us a stable trend, indicating a fundamental change in the diamond market? Does the new price reflect only the cost of construction of underground mines or is it an indicator of close structural transformations that radically change not only the position of the players but also the rules of the game themselves? If we analyze the current situation within the framework of the generally accepted paradigm that regards the diamond and diamond markets as classical commodity markets, then, in the face of the apparently long-term stagnation of jewelry markets in the countries that are the main consumers of diamond jewelry, new prices look beyond the bounds of the market, Corresponding to the balance of supply and demand.

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Mining holding company Anglo American and diamond mining company De Beers, being a part of this group, published their activity reports for 2008. The global economic crisis began to affect the activities of the largest mining companies, including Anglo American. In 2008, its total revenue decreased by 7.6% (Tables 1 and 2). However, if you take into account that she got rid of two activities - gold mining and paper production and packaging materials, which together accounted for more than $ 5 billion, then without taking them into account, the gain would increase by 7.9%. This is natural, since before the beginning of August 2008, when the prices of mineral raw materials and oil reached the zenith, all the economic indicators of the world mining companies were growing. And thus, Even a sharp decline in prices and demand for mineral raw materials due to the global financial crisis in the fourth quarter of the year could not seriously affect the economic results. However, already in 2009 the picture can dramatically change for the worse.

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In early February 2009, it became known that the largest producers of rough diamonds - De Beers, ALROSA, Hungary Billiton, Rio Tinto and Harry Winston Diamond Corp. - intend to implement a joint marketing project "Generic Diamond Marketing". Any significant details of this initiative by the participants are not disclosed yet, it is announced only about the creation of SteeringCom (SteerCom) and the involvement of the consulting firm McKinsey & Company to develop a mechanism for financing the project.

Marketing is a loose concept, and SteerCom's activities can be limited to conducting diamond advertising campaigns, but it can also form the basis for consultations of leading diamond manufacturers aimed at returning the diamond market to its "canonical form" - to monopoly regulation of raw material prices. In this case, the five largest diamond companies will act as a kind of "collective De Beers", or, if you will, the "diamond OPEC". This is a radical solution, in comparison with which all other options look more or less successful palliatives, leading only to a short-term galvanization of the market, but not capable of ensuring its stable development for the next few decades.

Indeed, any advertising campaign for diamonds, no matter in which countries it is conducted and for whatever strata it is designed, can not but contain the thesis about the increasing in time cost of diamonds. Any motive of acquiring a diamond - as a symbol of social status, as a gift of love or even more as an investment tool - simply excludes the possibility of a prolonged and noticeable drop in its value. The existence of a market for permanently cheaper diamonds is probably possible in a very short time, with a very costly advertising effort aimed at convincing the consumer that prices will soon turn. This practice is extremely dangerous, Because deceiving the expectations thus formed will mean the rapid destruction of the diamond market with unpredictable consequences. But the history of the "diamond pipeline" does not know another mechanism for a guaranteed increase in the price of diamonds, except as a monopoly on rough diamonds. It would be incorrect to say that the rejection of the monopoly regulation of the diamond market served as the sole cause of his current deplorable state, but at the same time it is obvious that " Supplier of Choice" is not a strategy that will surely push off from today's bottom.

The financial condition of each company from the "big diamond five" is far from ideal today. De Beers resorts to large-scale layoffs and reduces production, the market capitalization of Rio Tinto and BHP Billiton has fallen by more than 50% over the past year, the expected merger of these mining giants has not taken place, the companies announced a significant reduction in personnel engaged in diamond mining and production Of rough diamonds. At the Diavik deposit (the joint property of Harry Winston Diamond Corp. and Rio Tinto), due to lack of funds, the construction of the underground mine is significantly delayed and staff is being reduced. Alrosa can still be considered a happy exception to this gloomy list, as Gokhran buys its products through budgetary funds.

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Gold is becoming an increasingly popular commodity. Russian Gokhran, who once gave all the gold to the Central Bank, now, according to Interfax, is forming its own gold reserve, which may indicate that in this turbulent time, yellow metal is considered a "quiet haven" for state assets. Burning their fingers on the game with all sorts of derivatives, private investors are also "running away" into metal, which creates additional and considerable pressure on the gold market. The price of this metal recently stopped at $ 837 per troy ounce and, as experts say, has a general tendency to increase rather than decrease. According to the median forecast of 20 analysts polled by Bloomberg, the average price for a troy ounce in 2009 will be 910 dollars, and four of them predict, That by the end of the year gold will rise in price to 1000 dollars. The volume of gold turnover in 2008 increased by 58% worldwide, and the total volume of gold trading last year, according to International Financial Services London ( IFSL) , reached a record $ 20.2 trillion. All this indicates that after a stroke that overtook the US financial system, the dollar and the world financial system tied to it ceased to be trusted, which led to a global gold rush.

This process signals that currently there is a hidden maneuvering of resources, during which the national currencies tend to take the most advantageous position in relation to the dollar in anticipation of further developments. In essence, this means a move toward weakening of currencies in order to support their export opportunities. Or, in other words, save the chance to send your problems to others, instead of getting them from outside. However, the bustle of this kind ultimately forces everyone to change paper money for gold in order to protect themselves. The Russian ruble is not an exception. Further events, including the fate of the dollar assets accumulated in the world, as well as the entire world system of settlements in American currency, will largely be related to the economic policy that the new US administration will choose.

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The situation in the market at the end of the outgoing year can be characterized simply - the market, as it was imagined in August, no. There is no understanding of demand, huge flows across the pipeline, no credit money, the aggregate of all these factors gives a logical result - there is no price. Consequently, the main intrigue of the first months of 2009 will be the struggle for price.

Soon the market will understand what the real dynamics of demand for products with diamonds, and on the basis of this, manufacturers and dealers will form their own consumer list.

Equally entertaining is the situation in the foundation of the market - mining. The diamond-dependent countries in Africa are unlikely to show long-suffering, as this is a matter of the revenue side of national budgets. In addition, the cost of developing African deposits allows them to sufficiently "go" down the price. De Beers traditionally aims to prevent uncontrolled pricing. However, today their authority and influence on African governments may not be enough.

The diamond sector is a relatively small part in the budgets of Rio Tinto and BHP Billiton, but the financial condition of these companies today is far from ideal and it is unlikely that efforts to save this part of the business are priorities for them.

In these conditions, Russia's position is significant, extracting more than all diamonds in the world in karat calculus. This position, apparently, is that by the end of the outgoing year, ALROSA has left the market. Objectively, the Russian company possesses all the attributes necessary for such a step: its deposits are located on the sovereign part of Russia, the company itself is owned by the state and enjoys its support, which is the possibility of buying out the raw materials extracted by ALROSA by the state. And most importantly, ALROSA is probably more interested in preserving the high cost of raw materials, since the cost of production in the extreme climatic conditions of Western Yakutia can not be compared with Botswana or Namibia. It is clear that the reserves of ALROSA, which allow it to work in stock and not thus reduce prices, are also not endless. The financial "cushion" ALROSA Gokhran is able to provide depends significantly on the world prices for hydrocarbons - the basis of Russia's exports and budget. If the price of Urals is below $ 40 per barrel in the next 4 to 6 months, the prospects for purchases of diamonds from your company by the Russian state will worsen.

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The global crisis continues to test all areas of the diamond pipeline for strength. Among the last significant events: the decision of the management of Leumi Bank of Israel to stop crediting operations with rough diamonds, a significant drop in jewelry sales in retail chains in Japan, a negative acceleration in jewelry Internet trading, the braking of the acquisition of Archangel Diamond Corporation (a subsidiary of De Beers) 49.9% of the package "Arkhangelskgeoldobycha" and, accordingly, - uncertainty in the prospects for development of the Verkhotinskoye field, a sharp reduction in the net profit of ALROSA.

On this negative background, the optimistic expectations of the management of 4C-Diamonds, one of the few companies specializing in operations with investment diamonds, stand out. Vice President 4C-Diamonds Michael Thorner believes that diamonds in the era of the crisis are fully capable of fulfilling the role of a full-fledged investment object and comparable in their appeal to traditional commodities commodities. According to M.Torner, now the most attractive for investments are three-kart. If the price of significantly more rare diamonds in the range of 5 to 10 carats today still fell within 10%, then the two- and three-kart carriers are still successfully withstanding the onslaught of the crisis and the investment portfolios built on this base did not upset their owners. In November and the first decade of December, demand for investment diamonds of this dimension began to grow steadily, which inspires cautious optimism. M.Torner also predicts a significant revival of the market for investment diamonds in the first half of 2009.

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The financial crisis exacerbated the discussion of pricing principles in the global diamond market. The position of the largest producers of rough diamonds by De Beers and ALROSA, which announced a significant reduction in supply for price stabilization, was sharply criticized by the well-known expert Chaim Even-Zohar (October 30, 2008). Criticism of Even-Zohar is essentially reduced to the protection of classical liberal thesis - the only fair pricing mechanism is the balance of supply and demand in the free market, any deviations from this principle are negative phenomena, since they increase the risk of monopolization. Monopoly is a priori an evil, the meaning of existence is the robbery of the remaining market participants. Of course, The energetic rhetoric of Even-Zohar is quite capable of provoking tenderness among Karl Marx's few admirers, but it seems unlikely that the expert addressed his text to such a specific audience, alas, infinitely far from the realities of the diamond market. For those who are connected with this market, the position of Even-Zohar causes, at least, bewilderment.

Imagine for a moment that Even-Zohar's argument is flawless and the market decided to immediately follow his manifesto: the extracting companies do not reduce the supply, the cutters and dealers acquire the raw materials of exactly the characteristics they need at the moment, the price is set as a result of free trade, There are no regulators in the market. It can hardly be doubted that in this case, prices for rough diamonds will fall, and the decline is likely to be a landslide, That in the view of Even-Zohar, "true market levels" is obvious.

In such an impeccably free market, the fate of the extractive companies looks unenviable, but, at first glance, the cutters and dealers will prosper and, in the final analysis, consumers of jewelry with diamonds. "Lower prices - more demand" - it's just like a work of "hip-hop" culture. Indeed, if the prices for products, for example, Volkswagen reduce today by 30-40%, instead of the sales crisis, we will see the queue. But such an attractive logic ceases to work, if we recall the specifics of the diamond as a commodity.

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The diamond was offered to several gemological laboratories in Moscow. The initial information was not reported to the experts. One laboratory defined the diamond as natural, modified by the thermobaric annealing method. The rest successfully coped with the task, defining the diamond as synthetic. All experts immediately paid attention to the color of the diamond ("there is no such thing in nature", "color is insolent", "color is defiant") - this was the initial identification sign. The second and main criterion for identification was the pronounced cruciform zoning of the color, characteristic for diamonds made from single crystals grown using the "BARS" technology. This characteristic is established if the diamond is cut "center" of the original synthetic crystal, If a peripheral part of the crystal was taken for cutting, the definition of this feature would be difficult or impossible at all.
According to thermal conductivity, electrical conductivity and refraction, the diamond did not differ from natural. Spectrophotometry did not determine the presence of nickel and iron - catalysts used in the "Adamas BSU" technology.
None of the experts could identify the manufacturer, some uncertainly assumed the Novosibirsk or Israeli origin of the diamond.
The quality of the cut was all rated as "good." Spectrophotometry did not determine the presence of nickel and iron - catalysts used in the "Adamas BSU" technology. None of the experts could identify the manufacturer, some uncertainly assumed the Novosibirsk or Israeli origin of the diamond. The quality of the cut was all rated as "good." Spectrophotometry did not determine the presence of nickel and iron - catalysts used in the "Adamas BSU" technology. None of the experts could identify the manufacturer, some uncertainly assumed the Novosibirsk or Israeli origin of the diamond. The quality of the cut was all rated as "good."

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The rough diamond market in the III quarter of 2009 showed impressive growth. The main producers of diamonds were able to raise about $ 2.5 billion for their products - this is comparable to pre-crisis sales volumes. The distribution of shares in the market is also close to the pre-crisis period: 48% for De Beers, 22% for ALROSA (excluding sales to Gokhran), 9% and 6% for BHP Billiton and Rio Tinto respectively, the rest went to small producers. The prices for raw materials have appreciably grown - on the average up to 40% from the level of the February lows.

The beginning of the fourth quarter also looks optimistic. De Beers announced the restoration of production to 80% of the pre-crisis and a significant increase in demand for its products. ALROSA managed to sell diamonds on the market in October for $ 255 million at prices significantly higher than the price list of Gokhran.

The revival in the rough diamond market continues to contrast with the diamond market, where the price increase at best is calculated in units of percent. The labor market in the US also does not give rise to optimism: last week the number of initial applications for unemployment benefits rose from 514 thousand to 531 thousand, while the expected growth was only up to 515 thousand. Imports of polished in the US continue to be low, Not exceeding the cost of 50% of the 2008 levels. The dynamics of the labor market in the United States raises serious concerns about the fact that Christmas sales in 2010 will be no better than in the failed 2009.

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Experts predict a bright future for the gold market, which only strengthened as a result of the global financial and economic crisis, which was contributed, in particular, by an unprecedented appetite among investors.

Recently, the price of gold set a new record - at the auction on the London Metal Exchange (LME), the troy ounce went up to 1093.1 dollars.

According to the participants of the tenth conference, organized in London on November 2-3 in the London Bullion Market, after the bankruptcy of Lehman Brothers a little over a year ago, investors literally pounced on gold.

Last month, yellow metal hit $ 1,070.80 an ounce, beating the previous historical record of $ 1,032.70 recorded in the spring of 2008. Since then, the price of gold has never dropped below $ 1,000, and since the beginning of this year has increased by 20%.

According to Mark Lynam, head of the world's third largest gold mining company, the "barbarian relic," as he figuratively calls gold, is very reliable, despite the fact that in the short term they are difficult to predict.

Favorable factors for gold experts call it a decrease in the volume of its production, which was noted since the beginning of the decade and is caused by a decrease in production returns on old gold mines, as well as a shortage of new gold mines and an increase in production costs.

Director of the Swiss company PAMP, one of the largest producers of gold coins and ingots, Mehdi Barkhordar, for his part, believes that the demand for gold began to grow due to the global crisis, which entailed "fundamental changes in market dynamics."

Gold suddenly became a safe haven for European and American investors who rediscovered its advantages, because unlike other types of financial investments such as stocks and bonds, it is not tied to an issuer that can go bankrupt.

According to Aram Shismanian, the head of the World Gold Council, the global crisis "transformed the yellow metal, making it not only intended for specialists."

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The birth of a coalition government in Zimbabwe, in which President Robert Mugabe works side by side with his long-time political opponent, Morgan Tsvangirai, now Prime Minister, has brought considerable relief to the troubled but mineral-rich country.

After working for several weeks in the government, Tsvangirai reported that Harare plans to amend the bill on mining, approved by the Cabinet in 2006, but never became law.

If this bill became law, foreign companies would not be allowed to own more than 49% of any business and they would have to sell any stake in excess of this rate to Zimbabweans.

Minerals covered by this legislation included gold, diamonds and platinum.

"We are reviewing it (a bill on mining). The new coalition government hopes to come to an agreement on a new local property rule that would be comfortable for investors, but at the same time beneficial for a rich country, "Tsvangirai said.

Minister of Mining Industry Development Obert Mpofu recently reported at a conference in South Africa on mining issues that the revision of the draft law is aimed at establishing a balance between attracting investors and nationalizing joint ventures.

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The recovery of the global diamond industry is already taking place, but this process will not be quick - this is the main conclusion reached by the 2009 Antwerp Diamond Symposium participants, who finished work in Belgian Antwerp the day before. The Symposium was the last in a series of conferences organized by the Antwerp World Diamond Center to analyze the state of the global diamond industry and discuss its prospects.

This year the topic of the symposium was "Diamond Industry in the New Economy". The discussion was attended by leading industry experts and representatives of the sectors related to the diamond industry. They exchanged views on the state of business and markets during the period when the world economy recovered after the global financial and economic crisis. As noted in the forum's conclusions, after one of the most difficult years that the global diamond industry has ever experienced, 2010 is likely to be a year of growth for it.

According to the head of the Antwerp World Diamond Center Freddy J. Hanard, the actors of the diamond market need to act today, predicting the situation and its consequences - this is the key to success. In this regard, the current symposium has become another contribution to understanding how to move ahead in the changing business environment as a result of the global financial and economic crisis. "I have no doubt that the various ideas delivered through this symposium will be put into practice in the coming months," Hanard said.

The forum participants stated that, despite the extremely difficult conditions in which the industry was in the last 18 months, the number of bankruptcies among its subjects did not exceed the level predicted in the pre-crisis period.

Ensuring market stability was the result of the policy of diamond mining companies that reduced production and "frozen" diamond sales during the first half of this year, as well as banks that retained the level of lending to the diamond industry.

Participants in the 2009 Antwerp Diamond Symposium also expressed their concern over the 30% increase in prices for rough diamonds over the past six months, despite the fact that there was no growth in the average price of polished diamonds. In this regard, the experts who spoke spoke of the danger of creating a new speculative price bubble.

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Financial experts like to say that the crisis is in fact a new opportunity. The current global economic downturn is not an exception. It turns out that he opens the prospect for the diamond sector in terms of revising some of the most controversial methods of doing business in it? Can such a change create a more solid foundation for this business in the future for this business? These questions were asked by Antwerp Facets portal in the analysis devoted to the practice of transferring goods for sale in diamonds trading.

Over the past 15 years or so, the practice of doing business in the diamond sector has undergone significant changes. Diamonds have always been sold mainly for money, and payment of bills was made regularly, usually at the end of the working week. Precious stones literally cost money, as the seller received this money immediately. Nevertheless, despite the fact that producers of rough diamonds continue to sell diamonds, they receive money immediately, at the diamond end of this business in kings there is a loan.

Transformation of trade in diamonds into a business experiencing a shortage of money is not explained solely by one single reason. Its role in this definitely played the policy of the largest producers of rough diamonds. Strict control over the circle of customers contributed to the creation of an industry dependent on supplies, which led to the fact that often the prices of rough diamonds grew faster than the prices for diamonds. The requirement for diamond manufacturers to participate in marketing initiatives of raw material processors often resulted in overhead costs that were higher than planned.

What was a relatively simple business, has turned into a much more complex kind of activity. Manufacturers of diamonds began to offer retailers more and more long-term loans, to transfer goods for sale, and even with the right to return. Dealers working with diamonds gave their goods to retailers, in effect telling them that they can pay for them when they have money.

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Commenting on the outcome of the G20 finance ministers' summit, IMF Managing Director Dominique Strauss-Kahn said that unemployment growth will continue and reach a peak in 2010. A number of analysts in the US, Japan and the EU published a similar forecast just before the summit. These estimates appear to be sufficiently substantiated and make certainty in the short term development of the global diamond and diamond market. Since the growth of unemployment and the decline in the purchasing power of the population are tightly interlinked, the guaranteed decline in global demand for diamond products will last about a year, therefore, the rise in prices for rough diamonds has no objective basis and the speculative potential of diamonds will soon be close to zero . But a year is a short time, Especially given the relatively low turnover of funds in the diamond and diamond business. Therefore, dealers considering the possibility of acquiring diamonds at the current prices of the leading diamond mining companies with the expectation of speculative potential growth, would certainly like to receive an indicator (at least qualitative) that allows to determine with a high probability the moment from which the purchasing power of the population will begin - first of all in the USA , Which, in fact, will mean a real end to the crisis for the diamond and diamond market.

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India is the world's largest producer of diamonds. 90% of the world's lapidary capacities and 80% of workers of different degrees of qualification (up to 1 million people) are located here. The state of the Indian diamond market is an important indicator of the global diamond economy, greatly shaken by the global economic crisis.

In recent years, India imports about 100 million carats of diamonds worth about 10 billion dollars a year. Statistics of the Indian Council for the Promotion of the Export of Gemstones and Jewelry (GJEPC) 1990-2005 shows that Belgium and England (the Antwerp diamond center and De Beers) remain the main suppliers of raw materials, accounting for 75% of the raw material flow. About 20% are provided by Israel, Hong Kong and the UAE. That is, the leaders of the Indian lapidary industry still prefer to purchase rough diamonds in the countries-intermediaries. Direct deliveries from Russia were insignificant. Negotiations on direct supplies from Africa (Botswana, Namibia, etc.) are conducted in a slow regime. However, over the past year, the interest of Indian diamantaires in relation to direct supplies of raw materials has increased significantly. This is evident from the increase in purchases in Moscow and Yakutsk.

The volume of polished exports is volatile. Volatility intensified during the acute phase of the crisis (autumn 2008 - summer 2009). Thus, the largest decline - by 40% - compared to the previous year was observed in January 2009. Until August 2009, there was a comparative decline in exports compared to 2008. And from September to December 2009, India's polished exports increased by 12-129% per month. In general, in 2009 polished exports amounted to $ 12 billion, which is 4.6% more than in 2008. In carats, the growth in exports grew even more, reaching + 18%. The main export direction in 2009 was Hong Kong, pushing the United States. So, if in 1997 the volume of exports there amounted to Rs 25 billion, now it is equal to Rs 180 billion, that is, for 13 years the export to Hong Kong grew by 7 times. Obviously, Hong Kong is not the final buyer, but a convenient transit point. India is also making vigorous efforts to penetrate new markets - Russia and the Middle East. However, access to the Russian market is blocked by a 20% import duty.

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The acronym Chindia (Kindia) has recently been called the new economic system - a combination of rapidly growing economies of China and India, which are entrusted with the main hopes for overcoming the global economic crisis. In 2009, these countries demonstrated a convincing GDP growth: China by 8.7%, India by 6.7%. Prospects for 2010 are even more rosy - China should add 10.1% (experts forecast Merril Lynch), and India - 7% (forecast by IMF experts). If you consider that the most optimistic forecast for the US for 2010 provides for GDP growth of 2.5%, Japan - 0.9%, and the EU - 0.6% (UN experts forecast), then Kindia really can be considered as the main , And perhaps the only reliable generator of consumer demand, capable of keeping afloat the luxury markets and the diamond market in the first place.

Currently, about 1% of Chinese and Indian citizens have incomes equal to or larger than the average incomes of US citizens. But, given the huge population - only according to official statistics 1.3 billion in China and 1.2 billion in India - the absolute number of people potentially able to acquire luxury goods is approaching 250 million. And if we take into account the significant amount of " Informal sector ", then, most likely, this figure will exceed 250 million, which is already comparable with the US population.

The number of official holders of billions of states at the end of 2009 - 130 in China and 52 in India - also looks quite impressive (in the US - 359). Expert estimates of the number of millionth states strongly differ mainly due to the problem with data on the "informal sector": Boston Consulting Group, for example, estimates the number of Chinese millionaires at the end of 2009 at 450,000, and the Shanghai Hurun Report agency is inclined to estimate the number of " Hidden Chinese millionaires "in 800 thousand. According to India, the data fluctuates in the range of 130-300 thousand owners of millionth states. If we take into account the estimates of the cumulative number of millionth states in Kindia, taking into account the "informal sector", we must admit that their number has already exceeded a million (in the US about 4 million). It should also take into account the qualitative changes in the wealthy layer: When the first list of the richest people of China was compiled in 1999, the "entry fee" in the top 50 was $ 6 million. Now the lower bar, allowing to get into the first thousand richest Chinese, is $ 150 million; From 2004 to 2009, the average income of the richest 10 percent grew by 255% (an assessment by Credit Suisse experts). Since 2004, the savings rate in China has fallen by half - from 24% to 12%.

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At the end of 2009, the French bank Societe Generale released the report "The Worst Debt Scenario", which promises a terrible collapse of the global economy in the next two years. The French explained that all the "anti-crisis measures" of the current governments simply transferred private debt to the backs of state budgets. Public debts and their relation to the volumes of GDP have become too great even for the richest countries. In the next two years, the national debt of the UK will grow to 105% of GDP, in the USA and eurozone countries - up to 125%, in Japan - up to 270%. But this is only public debts.

If you take the total debts, then the situation is much worse. So, the leading consumer of diamonds, the United States, is this: 16 trillion dollars - Treasury obligations (US Treasury); Still the same amount - corporate sector liabilities; 8 trillion - state and municipal debts; More than 13 trillion dollars - debts of households; The uncovered liabilities of medical and pension insurance systems are about 30 trillion. In total, we get 80 trillion. Only for the maintenance of this debt pyramid, Americans should spend from 3 to 5 trillion dollars a year. Already, one third of the GDP of the United States is spent on debt servicing.

California as the most advanced state of America shows us in a time ahead scenario of events: technical default; The introduction of money surrogates; Reduction of workplaces; Beggar survival.

Similar to the USA, other industrial countries are also worried about big financial problems (only Germany is in relative prosperity, since it has powerful and competitive machinery, chemistry and a number of other advanced industries).

The collapse of the old financial system with the development of hyperinflation, barter and the transformation of the West into a Soviet likeness in 1991 may not be so fantastic. According to the Assay Chamber and the Guild of Jewelers of Russia, the consumption of jewelry products in the period of the increase in acute crisis phenomena decreased by 3-4 times. In the mid-1980s, the jewelry industry of the USSR at the peak processed about 60 tons of gold solely for domestic consumption.

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The Beijing Axis Group, an international intermediary and working with Chinese mining companies and natural resource companies, is confident that the extraction industry expects more deals to be concluded between China and Africa in the next two years.

At the presentation during the recently concluded Mining Indaba conference, held in South Africa under the title "China and Africa - Transformation of Business", the founder and managing director of the Beijing Axis group, Kobus van der Warth, said that the level of Chinese investment in the sector Africa's extraction is negligible compared to the extent of the participation of this Asian giant in the affairs of the continent in the years to come.

"The Chinese demonstrate courage, and they have the potential and resources that support their intentions," notes Kobus van der Wart. - China has emerged from a crisis-induced recession in a better, than ever, form and with good prospects for 2010. China's economy, stimulated by public investment, left the financial crisis behind and moved ahead, demonstrating an 8 percent GDP growth in 2009 ".

He also said that China is ready for testing in 2010 and the next stage of its "unabated growth."

The head of Beijing Axis recently noted that, although China's economy is currently vulnerable, by the fourth quarter of this year, its growth is likely to resume.

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Traditional instruments of jewelry trade in China include mainly retail stores, franchises, television stores and network sales. In the 21st century, the information age, we can see the development of a completely new model of selling jewelry - e-commerce. For China, it is relatively new, because two years ago the success of jewelery trading through the Internet was in great doubt. By 2010, however, many Chinese jewelry companies have already safely acquired their websites with the functions of online stores.

Vice Chairman of the Diamond Federation of Hong Kong Nelson Ho (Nelson Ho) believes that the main advantages of e-commerce for the jewelry industry are:

Lower operating costs

In general, the costs of retail companies can be divided into three parts: transportation costs and delivery, the functioning of the store, advertising and marketing. Delivery costs differ slightly. When creating an online store, you can significantly optimize costs: do without renting / purchasing a room, decorating and preparing for work, exhibition equipment and samples, hiring sellers, airtime costs (in the case of TV trading), etc.

Lower requirements for reserves

As a rule, jewelry companies have a significant need for capital. E-commerce at the same time allows you to manage the minimum inventory volume, because on the site it is enough to publish the image and description of the goods without its physical sample. Thus, online companies do not freeze their capital in stocks and thus gain a great competitive advantage.

A deeper understanding of market needs

With the help of online tools, the jewelry business can get a holistic picture of the behavior of visitors on the website and better understand consumer preferences in a real environment. Daniel Zhang, CFO of Taobao.com, the largest online retailer in China, claims that the number of registered users already exceeds 100 million people and, according to this indicator, they can already compete with the American monster Ebay.

"We get information about the preferences and shopping habits of customers through the data that the statistical tools of the site provide us daily," - Mr. Zhang shares. Agree that 100 million people are able to provide more than a representative sample in various marketing studies. The business can receive prompt feedback on its sales to study the market reaction and introduce timely changes in marketing strategy and tactics, to adapt their products.

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Recently, at a meeting held in Namibia, the Kimberley Process decided not to suspend Zimbabwe's participation in the global diamond trade, despite strong criticism from human rights activists.

Zimbabwe was heavily censured for "open disregard" of international standards in the trade in rough diamonds.

The Kimberley Process decided to adopt the Joint Work Plan proposed by the government of Zimbabwe itself, which will give the country more time to bring everything in line with the main trade standards.

The plan also calls for an independent observer in Zimbabwe who would check the diamonds leaving the area of ​​the Chiadzwa deposit and take care of providing "technical assistance" from the Kimberley Process.

The short-wave radio station Radio Africa interviewed Ian Smillie, a leading expert on conflict diamonds, who expressed his disappointment with the decision taken by the Kimberley Process on Zimbabwe's diamonds.

Rough & Polished correspondent Matthew Nyaungua listened to this show, and an excerpt from the interview is given below.

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A year after the global financial and economic crisis and the subsequent deep recession in the Antwerp World Diamond Center, the emergence of a qualitatively new situational phenomenon generated by the crisis, namely, the so-called "new normal" reality, is noted.

This means a new economic order that has made adjustments to the mindset of buyers, particularly in the United States.

According to experts, the buyer, beaten by the financial crisis, which distinguished the strength and speed of distribution, radically changed the attitude not only to spending, but also revised the way of life. Households are now avoiding "ostentatious" purchases and are carefully considering the need to purchase goods not of prime necessity.

Today, the buyer thinks in the following way: if there is an opportunity to purchase cheaper, it is worth using.

The Western world appears to be entering a period of a "new normal" reality, characterized by a reduction in the debt burden of households, a great desire to accumulate and reduce consumption. This metamorphosis will affect both the US economy and the global economic system as a whole. Experts expect that in the US retail trade volumes, which have a huge infrastructure, will decrease, and commodity producers will bet on the production of more export-oriented products.

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Perhaps the main problem facing the diamond market over the past year is the unprecedented level of debt of the leading mining corporations - De Beers and ALROSA. This is the problem of the market as a whole, since the encumbrance of the mountain giants is reflected in debts not only by their ability to attract loans, but also on the opportunities for developing their own mineral resource base, which is the basis of the world's "diamond pipeline", but also inevitably influences pricing mechanisms On rough diamonds. The volume of these debts, the conditions for their servicing and restructuring can not be ignored in the marketing strategies of companies and significantly influence the formation of the principles of interaction with customers.

The main reasons for the accumulation of debts of De Beers and ALROSA in 2005-2008 are similar in many respects - first of all, the need for investments in the construction and modernization of mines in Canada, Botswana and Western Yakutia. In these "fat" for the diamond industry, the level of such borrowing did not look excessive in the light of favorable price forecasts built on a strategically correct premise about the depletion of known deposits and the lack of discovery of new ones. The crisis fundamentally changed the situation: a sharp drop in demand put the leading diamond mining companies in extremely harsh conditions, the problem of debts came to the forefront.

At the first stage, the anti-crisis strategies of De Beers and ALROSA differed in principle: De Beers practically stopped production and resorted to loans to Anglo American, increasing its already considerable debt; ALROSA did not cut production, but left the market, selling all products to Gokhran. As a result of these actions, the market avoided a catastrophic collapse, the companies retained their production potential, but their balance produces a depressing impression.

By the end of 2009, the companies came up with comparable levels of debt load: $ 3.5 billion from De Beers and $ 3.85 billion from ALROSA. With respect to the Russian company, it can be argued that this figure is a relative success, since as of June 1, 2009, ALROSA's debt exceeded $ 5 billion. Nevertheless, such a level of debts appears to be critical, and the financial position of the leading diamond mining companies is extremely unstable. Given the current difficult labor market situation and the unfavorable forecast for 2010 unemployment dynamics in the countries that are the main consumers of diamond products, a significant reduction in the debt burden solely due to the growth in sales of diamond products seems almost unbelievable.

The need for a radical solution to the debt problem seems to be clearly recognized by both companies, and unlike the original anti-crisis measures, there will likely be more similarity than differences. In early December, it was reported that the management of De Beers is considering the possibility of increasing the company's capitalization by $ 1 billion, which is, respectively, 28% of its debt. Almost simultaneously it became known that the management of ALROSA considers it necessary to transform the company into an open joint-stock company in order to "increase the investment attractiveness of the company, reduce the total amount of debt, improve management efficiency". The connection between a significant reduction in the debt burden and the transformation of ALROSA into an OJSC deserves a separate consideration.

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2009 showed that competition between the leading diamond mining companies has become a reality, and this circumstance will mainly determine the further development of the market. The current financial condition of diamond mining companies is such that any attempt at a direct price war can be disastrous for all. Therefore, the main area of competition will be a decrease in the cost of mining diamonds. First of all, this means limiting or completely stopping the exploitation of low-margin deposits. The outlines of this process were outlined in the spring of 2009, when De Beers stopped geological exploration projects in the Congo and abandoned the Verkhotinskoye field (Arkhangelsk region), and ALROSA stopped development of a number of alluvial deposits and the Zarnitsa pipe.

It is likely that in the near future the plans of the leading companies to significantly reduce the intensity of exploitation and even the complete abandonment of unprofitable deposits in the current situation will be further realized. De Beers has already announced a planned shutdown of production at the Namaqualand field (South Africa) in the first quarter of 2010. This strategy also fills De Beers' refusal to invest $ 300 million in the construction of the mine in the AK6 (Botswana) and sell its stake in this project to the Canadian company Lucara in November 2009.

At the same time, De Beers announced the increase in production and the creation of 175 new jobs at the Snap Lake (Canada) field, which uses the most modern technologies to date and the ratio of the average price per carat (now about $ 110) to the cost price (about $ 30) is responsible Current market realities. At the same time, a representative of Debswana (a joint property of De Beers and Botswana) announced the approval of capital expenditures in the amount of $ 539 million for the project "Сut 8", which involves a large-scale reconstruction of the Zhvaneng quarry, whose production cost is even lower than at Snap Lake (about $ 25 / carat ).

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The financial crisis every year presents more and more interesting surprises to the diamond market. Last year, one of the main postulates of this business was almost shaken: diamonds and diamonds began to fall in price, and in fact the diamond is positioned as "eternal value", which does not become cheaper with the years. Now the world economy seems to be starting to recover, but ahead of the industry is another serious test, which it will face for the first time in its history: the diamond market is moving away from artificial regulation and becomes competitive.

One hundred years of monopoly

"The artificial market has developed historically," says Sergei Goryainov, an expert at Rough & Polished, "While large deposits in South Africa were not discovered in the 19th century, diamonds were mined accidentally on placers (for example, in India) and were therefore highly valued. Century it was a very expensive stone, a "stone of kings", inaccessible even to the top of the then "middle class." The most massive stone at that time was opal, the extraction of which was established in Europe. "

After discovering deposits in South Africa, it became apparent that among the precious stones diamonds are not even the rarest, but, on the contrary, the most common stones. People who dealt with this market realized that if they extracted the entire volume of diamonds and brought it to the market, they would immediately drop in price. So the idea of an absolutely artificial market with a monopoly price dictation was born. To do this, it was necessary to do three things: first - to get physical control over diamond deposits; The second is to get rid of competitors inside the industry; And the third is to "clear" the market, to make diamonds attractive for everyone, but at the same time to keep their price.

The "cleaning" of the market was carried out very elegantly: opal was attributed to negative consumer properties - in other words, it was announced that it brings misfortune and causes cholera. From cholera at a time when a few members of the royal family of Spain, who owned collections of opal jewelry, died very "in time". Diamonds and diamonds replaced the "unlucky" opal and became the most popular expensive stones in less than 10 years.

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It is estimated that diamond mining in the land area of Namibia will dramatically decrease in 2020 with the depletion of diamond deposits, and this situation now makes the government, albeit slowly, turn its attention to seabed exploration and production organization there.

But given that offshore diamond mining is an expensive venture requiring large investments, the government seems to be focusing more on uranium mining, as this mineral is widely believed to be the future of the Namibian mining industry.

The Permanent Secretary of the Ministry of Mining and Energy, Joseph Iita, recently confirmed that the future of Namibia's mining industry could be linked to uranium, as its exploration and production is being intensified in the country.

According to reports, Namibia is going to become the world's third largest producer of uranium by 2015, as the country has one of the world's largest deposits of this mineral.

In 2008, the country became the fourth largest producer of this important raw material after Canada, Kazakhstan and Australia.

Joseph Iita further noted that "globally, the demand for nuclear fuel should significantly increase, as concerns about climate change and the reliability of energy supply lead to the revival of nuclear power plants, increasing the demand for uranium. For several years, prices for uranium have been growing, and the outlook for the uranium market remains positive.

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The season of Christmas sales demonstrated some revival of the jewelry market compared to the disastrous 2008. In the main market - in the US - sales grew at every second retailer, and in the fifth part - by 20%. It looks inspiring, especially against the background of the general results of the year, showing the freezing and declining incomes of 60% of jewelery sellers and frankly sluggish growth among the rest. The Christmas season also showed a rare level of variation in the rates of large retailers: sales of Tiffany & Co., for example, grew by 17%, while Zale Corp., by contrast, fell 12%. This variation, unusual for pre-crisis times, most likely reflects the ability of marketers of companies to respond quickly to changes in demand within the main trend: the bulk of buyers prefer products,

Sales of diamond producers last year decreased by an average of 40% and there is no sign of any significant signals indicating the rapid recovery of this market. The raw material market is a sharp contrast: the total sales of DTC and ALROSA are approaching $ 900 million in January, and taking into account the supplies of other producers, the market will obviously take a billion-dollar line, which is quite comparable to the pre-crisis period.

Do the modest successes of jewelry retailers and the impressive achievements of rough diamond producers reflect a steady trend of restoring markets or are they just a respite before a new protracted peak? In our opinion, the dynamics of such indicator as the "savings rate in US households", which is a direct indicator of the population's readiness to increase consumption, can prompt the answer to this burning question. In the 70s - early 80s of the last century, the savings rate fluctuated around 10%, rising to 12-14% at the time of the well-known economic crises. But from the mid-80s, when the discount rate of the Fed began to decrease steadily and steadily, and the population's demand for goods and services to be spurred on by means of constantly cheaper loans, the saving rate began to decrease steadily.

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According to statistics, 80% of employees in the Chinese jewelry industry work for small and medium-sized family enterprises, whose management, as a rule, does not have a good education (in extreme cases in general - education). For example, the correspondent of the Jewelry House (525zb.com) from Shenzhen in the south of China, having communicated with the prominent Chinese brand SunFeel (http://www.sun-feel.com/), found out their point of view that jewelry - It is, first of all, a commodity and it must be sold. They forgot - and forgotten. Therefore, they would prefer to spend a huge amount of money on advertising on central television, than to spend them on improving design developments. This reflects the existing situation in the industry: there is no due attention and respect for the aesthetics of art and the cultural component that translates the works of jewelry designers.

Accordingly, and to the work of Chinese designers attitude is rather disparaging. Often they are regarded as handymen who, between other important matters (such as selling a diamond ring), can still draw, blind or cut something. As a rule, management gives the highest priority to the sale of products, so the profit-making divisions of companies are valued much higher than designers who do not bring money, but only "sit and increase the cost" - as the owner of a small bench of gold jewelry addressed to the recent Shanghai jewelry exhibition Neighbors on the stand, designers.

The desire of some enterprises to translate each employee into a cash equivalent is so great that in the hot season of sales they can even transfer designers from creative positions to sales. Thus, their design work becomes only an auxiliary activity. In addition, it can often be observed that for the creative work the proper conditions are not created: silence and privacy, so necessary for concentration.

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