Rapaport JCK 2018 Live

[psadmin]

 

[Garry H (Cut Nut)]

We were not going to bother coming this year. But then with De Beers new MMDs LightBox its going to be interesting

 

[psadmin]

 

[psadmin]

 

[psadmin]

 

[Garry H (Cut Nut)]

Martin started the industry focusing on blood diamonds in 1999. He has been serious about this since then

 

[psadmin]

Dr. Manyeh discusses about the changes to Sierra Leone to help the artisanal miners.

 

[psadmin]

 

[Garry H (Cut Nut)]

Rarity has been happening so market forces make the miners win. That is not so with synthetic diamonds.
Martin is saying the big miners are misusing their position "you miners are a bunch of liars".
I think it is also fair to say that planning of rough diamond cutting technology has improved and so more value comes from cutting which drives down polished prices.

 

[psadmin]

 

[Garry H (Cut Nut)]

Martin Rapaport is talking about anti trust probability of investigation into De Beers.
He has often said things about De Beers but today he is trashing them. I imagine that execs of DB will be talking to their lawyers about libel.

 

[whitewave]

How is debeers proactively destroying transparency and making source certification impossible?

 

[psadmin]

 

[psadmin]

 

[whitewave]

I’m interested in this discussion

 

[Garry H (Cut Nut)]

"De Beers is not a leader of the industry. They are leaders of De Beers"

 

[psadmin]

 

[Garry H (Cut Nut)]

Good little 2 people panel on BlockChain to ensure ethical supply chains.
But its a long way away.

 

[diagem]

Interesting for sure, thank you and Sergey for this heads up.

 

[Diamond_Hawk]

A lot to digest from this presentation. I am interested to hear the discussions as more light is shed on the information (accusations?) presented by Martin.

 

[GolfingGreen]

This is great. Thank you. Why is he only cricitizing DeBeers? What about Alrosa or Rio-Tinto? DeBeers has not “controlled” the market for a long time yet they keep getting bashed.

Do the U.S. dealers only buy from DeBeers (their sightholders)?

I wish there was a good book to read on the supply chain.

 

[Garry H (Cut Nut)]

Martin Rapaport thinks at 43%
De Beers is the largest. I think he is worried about 2 main things. The fact that DB could identify where and which nations their diamonds come from. That would mean the countries could check back and see if they collected all taxes.
Nations could market directly and by pass De Beers.
And finally the UAE has a 2 or 3billion hole in sight holders either cheating Indian taxes or other illegal funding.

Alrosa is 2nd biggest but all their diamonds come from one nation: Russia. Although Alrosa is now prospecting in west African companies.

 

[Karl_K]

I'm not a De Beers fan but......
At 43% of the market De Beers can bring 100% of their production B2C and not violate anti-trust laws.
There are no laws in the US that says De Beers has to support the current supply chain and cant replace it with their own for their own goods.
The odds of getting such a law passed are 0.

In the US a law could be passed requiring source identification for all diamond imports.
It might be able to be done by a regulation rather than a law, I dont know for sure.

 

[GolfingGreen]

As a consumer, I do not see value in a U.S. law for source identification for diamond imports. It will create a "tax" on diamonds and these price increases will be passed on to the consumer. If there is law for diamonds, why not clothing made in China, or electronics made in Korea... it never ends. We cannot be the ethical police.

And here's the thing... a survey was done a couple of years ago (I forgot who did the survey), on ethical sourcing... the survey found that while many consumers, including millenials, said ethical sourcing of items such as food and consumer goods was important to them, their buying behaviors did not change and they did not limit their purchases to only goods that were ethically sourced.

So... is this more hype that diamond consumers want ethically sourced diamonds? And was this hype created by one man and a movie (speaking of movie... I bet Leonardo Di Caprio and Diamond Foundry are sweating now about Lightbox). I know ethical sourcing is important... from coffee to diamonds... but is the industry over-reacting? Any stringent regulation will negatively affect the industry as the increased cost will be passed down to the consumer.

I for one, if I had taken the survey I referenced above... I would have answered "yes... ethical sourcing matters to me". But if you had asked me if I only buy ethically sourced items, my answer would be "no, it's nice to have, but I do not insist on it".

I wonder if anyone has statistics on the percent of your clients who have said "show me only your ethically sourced diamonds as those are the only ones I will purchase".

Let the consumer decide, don't make assumptions and "tax" us for what we don't demand. And the consumer is not a fool... the consumer shops and the world is a much smaller place. If diamond prices are 20% higher in the U.S. due to an ethical tax, the consumer will purchase the stones elsewhere or worse, the consumer will shift to another gemstone.

Maybe I am completely incorrect here and of course I do not know your business model, but this is my point of view as a consumer I wanted to share.

 

[Texas Leaguer]

@Miki Moto I think you make a lot of sense. My feeling is that the Rapaport provocations are quite possibly an overreaction. Not saying the issues are without merit, only that Martin is no stranger to using his platform for high drama. Combined with the fact that the anti-trust allegations seem alot like recycled arguments in the continuing saga of Debeers as the Evil Empire. Again, not without some justification.

The block chain questions to me are the most important from an ethical standpoint. Progress is being made and pressure should be kept on for a continuation of improvements. I think that civil discussion at the right levels is more likely to lead to solutions than public shaming of Debeers. But sometimes making headlines is a good way to propel that process. I do think Rapaport means well, and I do not necessarily fault his approach. But I think we all need to see this current firestorm for what it is.

While the lightbox initiative and the whole issue of synthetic diamond is adding a fear factor that is ramping up emotions and fueling renewed distrust of Debeers, I think it is a secondary issue that will find it's own equilibrium in the market. Debeers is attempting to influence the market for sure, which they have every right to do. In fact, someone needed to do this, and Debeers is probably the only company in the world capable. I'm not a lawyer but I would be very surprised if there is any credibility to the allegations of anti-trust given the product is one that will eventually be trading for the prices Debeers have have announced, and will most likely continue to go much lower over time.

 

[Texas Leaguer]

How is debeers proactively destroying transparency and making source certification impossible?

Yes. This is important to understand, and not just from the perspective of those making the accusation.

I'm not a big fan of giving a platform to simply lob allegations. There is always more to the story. As the saying goes, there are usually three sides to any dispute - his, hers, and what really happened.

 

[GolfingGreen]

@Texas Leaguer I personally do not think there is anti-trust issue here. It's more drama. DeBeers is no longer a monopoly and has not been for years. Not to mention, DeBeers has been burned in the past for anti-trust issues I am sure their legal team was all over this prior to the LightBox announce.

As much as some people in the trade seem to hate DeBeers, from a consumer's point of view, they are the only ones continuing to promote high demand for diamonds in the U.S. Every few years DeBeers seems to come out with a campaign (or company... i.e. Forevermark) and it reminds consumers we need diamonds. More bling for everybody! I would think this benefits everyone in the trade, so the way I see it, if DeBeers is successful pushing the demand for diamonds, the industry is successful and has growth.

I love colored precious gemstones, yet there is no champion such as DeBeers. Hence the colored gemstone industry is just limping along. Maybe Gemfields will fix this. I have high hopes for them to revive the colored gemstone industry (e.g. rubies and emeralds which are my second loves!). I would also watch for Gemfields to be a competitor to the diamond industry. In Europe, not everyone wants diamonds, and rubies, sapphires, and emeralds are coveted. I would be careful with an open eye to see if Gemfields might cause a swing and create colored gemstone demand in the U.S.

My two cents of course as just a consumer.

 

[OoohShiny]

There is always more to the story. As the saying goes, there are usually three sides to any dispute - his, hers, and what really happened.

haha I haven't heard that before - I may have to steal it lol

 

[WinkHPD]

I wonder if anyone has statistics on the percent of your clients who have said "show me only your ethically sourced diamonds as those are the only ones I will purchase".

I can tell you a couple of things brought to mind by this discussion.

1. When Crafted by Infinity first started doing business, they tried to use Canada mark diamonds. Our clientele did not want to pay that extra 5% that Canada taxed exported uncut diamonds at that time. This in spite of many clamoring for only Conflict Free diamonds.

2. Crafted by Infinity and other quality cutters used by other high quality retailers on this platform, all are EXTREMELY careful of getting Conflict Free diamonds that are in full compliance with the Kimberley Accords.

We retailers here on Pricescope know more about the Conflict Free status of the diamonds than many others in the trade. We do not talk about it, we just know our suppliers are doing it. We ask, they supply the needed information and assurances. It is why you can and will find the required Kimberley Accord statements on our invoices.

Wink

 

[Texas Leaguer]

I can tell you a couple of things brought to mind by this discussion.

1. When Crafted by Infinity first started doing business, they tried to use Canada mark diamonds. Our clientele did not want to pay that extra 5% that Canada taxed exported uncut diamonds at that time. This in spite of many clamoring for only Conflict Free diamonds.

2. Crafted by Infinity and other quality cutters used by other high quality retailers on this platform, all are EXTREMELY careful of getting Conflict Free diamonds that are in full compliance with the Kimberley Accords.

We retailers here on Pricescope know more about the Conflict Free status of the diamonds than many others in the trade. We do not talk about it, we just know our suppliers are doing it. We ask, they supply the needed information and assurances. It is why you can and will find the required Kimberley Accord statements on our invoices.

Wink

I agree in general Wink. But I will say that many customers do inquire about ethical sourcing, and we have that discussion with them. It definitely IS an issue for this generation, and that should never be taken lightly. ESPECIALLY given the events of the past few months and the activism that has been generated around keeping businesses accountable for their practices, their policies, and even their advertisers! Young people are realizing their strengths and I think that will only grow in potency as they learn to use this kind of leverage to sculpt the world they live in.