(Bloomberg) - The world's largest diamond mining companies, which are increasingly threatened by man-made and issued for natural diamonds, gathered in a private meeting to create the first association of producers of rough diamonds.
Representatives of the eight largest companies, led by De Beers, a division of Anglo American, and Russian ALROSA, met at the London headquarters of the Rio Tinto Group on Tuesday to discuss the possibility of establishing an association, say informed sources, who, however, agreed to provide information only on conditions anonymity, since the negotiations were not public.
The well-known closedness of the diamond industry lacked a strong leader since in 2004 De Beers lost the 10-year battle of monopolistic fixing of diamond prices in the US court. The association, which is planned to create key industry representatives, will represent the interests of suppliers of most of the world's diamonds.
"The meeting was held in order to assess the need to establish an association of producers similar to other similar organizations," Rio Tinto said in a message sent to Bloomberg News, while declining to name all participants in the meeting. "The idea behind the creation of such a the body is to protect the interests of diamond mining companies and the diamond sector in general, and we will continue negotiations with industry representatives. "
Among the topics that were raised in the discussion, the main were the study of the industry and the threat to the confidence of consumers from the hidden synthetic stones that appear on the market, the report said De Beers.
It is alleged that the initial budget of the association will be $ 6 million. It is also reported that representatives of Petra Diamonds Ltd., Gem Diamonds Ltd., Lucara Diamond Corp., Dominion Diamond Corp. and LUKOIL were also present at the meeting.
One of the main problems that the new organization will have to deal with is hidden synthetic diamonds, which become part of the supply chain. While diamonds grown in the laboratory have been produced for a long time, modern technologies allowed manufacturers to create a large number of synthetic stones of jewelry quality at a low price. In this case, traders can try to give them for natural, or mined diamonds.
"Synthetic diamonds are the most serious threat," said Lucara CEO William Lamb. He attended the meeting and reported that just one of the topics on the agenda was laboratory diamonds. The association of manufacturers of products could give an official answer to questions of consumers and investors on this subject, the general director Lucara is assured.
"We agreed that now is the time to create something like that," Lamb added.
Last month, the Indian edition of the Times of India reported the discovery of 110 synthetic diamonds in one of the diamond lots in the city of Surat, the world's largest diamond cutting center. The hidden mix of natural and synthetic diamonds is not registered in this country for the first time, and the National Council for the Promotion of the Export of Gemstones and Jewelry (GJEPC) established the National Committee for the Verification of Diamonds to combat this phenomenon.
"These are positive changes that will help companies to jointly combat the inflow of synthetic diamonds and ensure the work of diamond mining companies for the benefit of the market," the statement for investors of Investec Plc said.
It is reported that the association will not only struggle with synthetic diamonds, but will also try to develop the industry and provide information to consumers and representatives of this industry. This will serve as a continuation of the September publication of the first analytical report of De Beers, which is a catalog of reliable information that is difficult to find in this industry.
The new organization, which still has no name, will also work on establishing links with governments and industrial groups, as well as dealing with health and safety issues, environmental protection and sustainable development. The activities of the new association also include the publication of annual reports on the state of the diamond industry.