After receiving praise from industry bankers for holding the line on rough diamond prices in January, the De Beers Diamond Trading Company (DTC) announced a “rebalancing” beginning with this week’s sight. Prices of some goods – invariably the most popular – have been adjusted upwards, while those of less-popular goods were lowered, the net result adding 2% to the DTC’s bottom line.

Preliminary reports indicate that the increase is concentrated mainly in larger, high-quality rough that polishes to 2 ct.-plus, which is scarce and in high demand. These goods are an estimated 5–7% more costly, while prices for lower-clarity “piqué” goods polishing to 0.25–0.75 ct. dropped slightly.

At a time when profitability among DTC sightholders (and the rest of the diamond industry) is under strong pressure, this increase will likely create further concerns among bankers who have been tracking the sharp rise in industry debt over the past year. Total debt is now around $11 billion, measured against world polished wholesale prices of approximately $16–17 billion.

De Beers achieved record diamond sales of $6.539 billion in 2005, 15% higher than in 2004, the company announced at a Feb. 10 news conference. Its net income from diamonds was $1.186 billion, a 2.7% increase from $1.155 billion in 2004. Diamond production by the group, including joint ventures, was 49 million carats, an increase of 4%. The company estimated that worldwide diamond jewelry sales rose 6–7% by value in 2005, and referred to U.S. holiday retail sales as “satisfactory.” (The U.S. represents about 48% of worldwide diamond jewelry sales.) Japan and the rest of the Asia-Pacific region saw growth in the “low single digits,” with China performing better after a slow first half. Asia-Arabia, which includes India and Dubai, once again saw double-digit growth.

DTC executives noted earlier that they expect growth to accelerate during the second half of the year. “Demand for rough diamonds continues to be steady,” the company said in its outlook for 2006. “However, stocks of both rough and polished in the cutting centers were relatively high at the beginning of the new year, as were aggregate debt levels. As a result, DTC clients were happy to see a relatively modest January sight. However, the 2006 outlook remains positive, with market growth expected to be similar to 2005—in line with expectations for global economic growth.”

De Beers will formally end nearly half a century of diamond purchases from Russia in 2009 following a decision by the European Commission (EC), which regulates competitive issues in the European Union.

The EC decision requires the DTC to scale down incrementally its rough diamond purchases from Alrosa, Russia’s diamond mining and marketing arm, from $700 million last year to zero in 2009.

EC Commissioner for Competition Neelie Kroes noted in a news release: “For the first time in the history of the diamond market, there is an opportunity for genuine competition. De Beers’ long-running primacy can now effectively be challenged by its biggest competitor, Alrosa. The Commission’s decision frees up a viable alternative source for supply of rough diamonds, which will ultimately benefit consumers.”

Soviet geologists discovered their country’s large diamond deposits in eastern Siberia in 1955, and the USSR began marketing its production through the DTC, via intermediaries, five years later. That arrangement continued through the fall of the Soviet Union in the early 1990s.

The EC is continuing to investigate complaints filed by several diamond dealers over the DTC’s Supplier of Choice program.

AUCTIONS: Christie’s achieved a record $16.7 million in sales at its St. Moritz, Switzerland, auction Feb. 15. Christie’s sold 75% by lot, 77% by value, with an increase of 37% over the same auction a year ago.

The top lot was an 8.62 ct. cushion-cut Burmese gem that drew a record-breaking price for a ruby: $3.64 million, or $425,000 per carat. The buyer was Laurence Graff.

Also at the sale, a private buyer lodged the high bid of $1.826 million for the next most expensive lot, a pear-shaped D-VVS₁ diamond of 33.04 cts., while a 32.75 ct. Fancy Intense yellow diamond brought $662,200 from a Middle Eastern buyer. An 11.67 ct. D-Internally Flawless diamond brought $636,328 from a European buyer.

MACRO: The U.S. Department of Commerce reported that jewelry sales for the November-December period were up 3.8% from 2004. For the year 2005, sales increased 2.5%. However, prices for gold, platinum, diamonds, and many colored stones rose by much higher percentages.

Analysts are looking for further interest rate hikes after consumer prices rose in January at the fastest pace in four months on the strength of rising gasoline and electricity prices. The Department of Labor’s Consumer Price Index rose by 0.7% last month, with the vast majority of that increase stemming from higher energy costs. The core rate of inflation, which excludes energy and food, was more moderate, up by 0.2%. Gasoline increased an average of 5% in January.

Russell Shor
Senior Industry Analyst

For four days this summer, the center of the international gem and jewelry industry will be San Diego, Calif., the site of GIA’s first-ever Gemological Research Conference (Aug. 26–27) and 4^th International Gemological Symposium (Aug. 27–29).

Along with an impressive lineup of speakers and social events, both conferences will feature Poster Sessions. What is a Poster Session? Think of an interactive forum where innovative ideas and the latest research are presented via illustrations, computer modeling, and displays. The last Symposium, in 1999, drew more than 70 poster exhibitors, and now GIA invites every industry member to exhibit in 2006.

Presenting a “poster” at the Gemological Research Conference and at Symposium is a rewarding experience that offers the opportunity to interact with an audience of influential gemologists, researchers, and jewelry industry leaders from around the world. Poster presenters also save $300 on their admission to Symposium.

The Poster Sessions for both events cover a wide range of subjects related to gems and jewelry. The presentation themes are:

• Gemological Research Conference: geology of gem deposits, new gem occurrences, gem characterization techniques, diamond and corundum treatments, laboratory growth of gem materials, and general gemology.
  
  
• International Gemological Symposium: any of the themes mentioned above, plus many others, including appraisals, gem cutting, jewelry history, jewelry design and manufacturing, branding, marketing, museum collections, and legal issues in the gem and jewelry industry.

To participate in the Poster Sessions, the first step is simply submitting an abstract, which is a brief summary (up to 400 words) of your presentation. Once your abstract is accepted, you need only prepare images (photos and line illustrations) and text that can be mounted on a backboard provided by the conference organizers to describe your research project or concept. A table will be provided, and display cases will be available for rent if you wish to show related materials.

More details are available at the online Poster Session brochure; but be sure to act quickly. All poster abstracts must be e-mailed to Poster Session chairperson Dona Dirlam by March 31 for evaluation, and potential presenters must register by March 31 to get the reduced Symposium rate.

Abstracts of poster presentations given at the Gemological Research Conference and 4^th International Gemological Symposium will appear in the Fall 2006 issue of Gems & Gemology.

To subscribe to Gems & Gemology, click here or contact Circulation Coordinator Debbie Ortiz. Call toll-free 800-421-7250, ext. 7142. Outside the U.S. and Canada, call 760-603-4000, ext. 7142.

Due to their short wavelengths and high energy, X-rays can penetrate materials that visible light and UV radiation cannot. This provides a way to study the internal structure and other characteristics of a specimen without having to cut it into sections or otherwise destroy it.

Certain materials are more transparent to X-rays than others. The X-rays that pass through an item can expose special photographic film and create light to dark images on it, depending on the material's relative transparency to X-rays. Materials that are transparent to X-rays leave a black image on the film, whereas materials that are opaque to X-rays block them and leave a nearly colorless area on the film. Some modern X-ray machines use specialized detectors instead of film to capture the image digitally.

In gemology, X-radiography is used mostly to separate natural pearls from freshwater tissue-nucleated cultured pearls and saltwater bead-nucleated cultured pearls. These different types of nuclei create X-ray images with structures and tones that are distinctly different from those characteristic of natural pearls.

X-rays are useful in other ways as well, since many materials luminesce in response to them. When gemologists use the word fluorescence, they usually mean the visible light that is emitted when a material is stimulated by ultraviolet radiation. When used with X-rays, this type of reaction is called X-ray luminescence. 

Luminescence to X-rays also provides important information about the nature of a pearl. While X-radiography can show if a pearl is cultured or natural, the presence and strength of visible luminescence in response to X-rays can allow gemologists to distinguish between saltwater and freshwater pearls. Observing this luminescence requires the use of a special viewing box, with a window through which a technician can see the pearl’s luminescence, if any, while it is exposed to the X-rays.

Natural saltwater pearls luminesce very weakly or not at all to X-rays. Natural and cultured freshwater pearls generally luminesce strongly due to their higher manganese content.

Most bead-nucleated saltwater cultured pearls luminesce to varying degrees because the freshwater mollusk beads typically used as nuclei luminesce through the overlying nacre. However, if the nacre layer is thick enough – as with some South Sea cultured pearls – or if there is a sufficiently thick conchiolin layer (which can block the luminescence), they might not show any visible luminescence at all.

To learn more about how to grade and test pearls for authenticity and post-harvest treatments, enroll in GIA’s Graduate Pearls Diploma Program. Click here for information.

The GIA Laboratory announced that it has updated its Identification Reports for colored gemstones and that rubies, sapphires, and alexandrites will now receive their own gem-specific reports. In the past, only emeralds received their own reports.

“Because of the growing number of increasingly sophisticated treatments for gemstones in existence today, more research and time is needed to identify and analyze gemstones,” said Tom Moses, senior vice president of the GIA Laboratory and Research. “As a result, we continue to expand our testing processes.”    

The updated Identification Reports for unmounted or mounted gemstones will provide better descriptions, more detail, and more information on treatments. In particular, the new Identification Reports will provide separate information for the species and variety of the submitted colored gemstone, as well as a quantification of treatments when present. Identification Reports for rubies, sapphires, emeralds, and alexandrite will now feature a photograph of the submitted gemstone.

“At GIA, we are constantly working to improve our Laboratory research to ensure that state-of-the-art testing methods are used,” said Moses. “Through collaborative efforts with various trade groups within the color gemstone industry, our goal is to provide our clients with the most thorough research and clear reporting available. Specifically, our new ruby and sapphire reports reflect the harmonized disclosure nomenclature that GIA has been developing with other gemological labs around the world through the Laboratory Manual Harmonization Committee.”

GIA has also established a new fee schedule for Identification Reports. The new fees reflect the increased need for more sophisticated testing.

The fee schedule is divided into four categories: Ruby, Sapphire, Emerald, and Alexandrite Services; Gemstone Identification (for other gemstones); Pearl Services; and Additional Services, which include the updating and verification of previous reports. 

The new Identification Services Fee Schedule will go into effect March 1, 2006. This fee schedule is available as a free PDF file on the GIA website and will be distributed throughout the year at trade shows and other events. For instructions for submitting gemstones directly to the GIA Laboratory from anywhere in the world, click here.

Customers who have questions, or would like to order the new fee schedule, can call a GIA Laboratory customer service representative at 800-421-7250 ext. 7590 (U.S. and Canada). From outside North America please call: 760-603-4000, ext. 7590 for the West Coast Laboratory or 212-221-5858 ext. 3724 for the New York Laboratory.

Feb. 24, 2006

Over the past several years, GIA has produced a series of articles that explain fundamental issues related to the GIA Diamond Cut Grading System.

Each article conveys information necessary to understanding the implementation of the system and how cut grades are affected by other grading processes in the GIA Laboratory.

Originally published in the Rapaport Diamond Report, these articles are now available as PDF files on the “Learn More” page of the GIA Diamond Cut Grading System section of the GIA website.

The various articles address:

• Measurement tolerances of different measuring methodologies
• The role of these measurement tolerances in establishing the precision with which the GIA Laboratory now reports proportion data 
• How the Laboratory assesses “painting” and “digging out” (also referred to as “non-standard brillianteering”) in standard round brilliant diamonds, and the effect of these manufacturing practices on the GIA cut grade
• How the Laboratory assesses polish and symmetry
• How the Laboratory assesses culet size and girdle thickness

These articles provide an essential reference for the industry and the public to better understand some of the procedures used in the Laboratory for grading standard round brilliant diamonds.

GIA’s two marquee events of 2006, the inaugural Gemological Research Conference (GRC) and the 4^th International Gemological Symposium, are only six months away. If you’re thinking of attending one or both of these conferences, be sure to mark these dates on your calendar to get the most out of the GRC and Symposium experience. Also, please note that the March 1 deadline for submitting abstracts and receiving a poster presenter discount has been extended to March 31.

March 31, 2006: Abstracts due for GRC/Symposium poster sessions, as well as GRC oral presentations. Last day for Symposium poster presenters to take advantage of special savings on registration. 

May 1, 2006: Notification of acceptance of abstracts submitted for GRC/Symposium poster sessions and GRC oral presentations.

June 15, 2006: Prices go up for Symposium registration.

Aug. 11, 2006: Last chance to save on GRC and Symposium registration. After this date, “at the door” rates will apply.

Aug. 25, 2006: Optional field trip for GRC participants to the Pala pegmatite district (sold out). Update: A second field trip, on Aug. 30, has been added for GRC and Symposium participants. Space is limited, so early registration is recommended.

Aug. 26–27, 2006: GIA Gemological Research Conference in San Diego, Calif.

Aug. 27–29, 2006: 4th International Gemological Symposium in San Diego, Calif.

For more information, visit the Gemological Research Conference and the International Gemological Symposium online. Or e-mail the GRC organizers at gemconference@gia.edu or the Symposium coordinator at igs@gia.edu.

Due to increased demand, GIA Florence has rescheduled the start date of its Graduate Gemologist (G.G.) program that is taught in English. The course will now begin four months earlier, in the spring of 2006 – a big change to the academic schedule of the past 12 years.

The six-month curriculum, a combination of the Graduate Diamonds and Colored Stones programs, teaches the grading and identification skills needed to become a buyer, appraiser, retailer, or senior professional in the gem and jewelry industry. Students learn how to grade diamonds from the creators of the Four Cs and the International Diamond Grading System™ and how to test and identify hundreds of stones.

“Florence has one of the largest American study abroad programs in the world and therefore is extremely well equipped to suit all foreign students’ needs,” said GIA Florence Director Federico Stocco. “In May, Florence is buzzing with open-air cinemas and cafes, and GIA Florence’s campus is located right in the heart of this beautiful city.”

During this late spring period, GIA Florence also offers courses in Jewelry Design, Intermediate CAD/CAM and a Pearl Stringing class, giving new and existing students the chance to complete their studies before the start of the summer.

“I can’t imagine studying precious stones in a more magnificent environment than the art center of the Renaissance – Florence, It