ABN AMRO Bank N.V., which holds an estimated one-fourth of the diamond industry’s $12 billion financing portfolio, may merge with Barclay’s, one of Great Britain’s largest banks. The Financial Times reported this week that Barclay’s was in “exclusive” negotiations with ABN, which operates in over 50 countries.

According to analysts, ABN’s overall financial results have been lackluster over the past five years, prompting complaints from one highly vocal dissident shareholder group, which demanded better returns from the firm.

ABN executives have always been quick to state their support of the diamond and jewelry industry, as they stress their understanding of its “unique nature.” This understanding is reflected in the size of its portfolio. The industry has provided a fairly lucrative return to the bank over the long term, even if several major clients are currently in difficulty – LID’s U.S. operation filed Chapter 11 bankruptcy last week, and M. Fabrikant & Son went into Chapter 11 last fall.

Given the low profits, prevalent use of memos, and long payment terms in the diamond industry, a new organization may take a more stringent approach toward industry credit.

Even if ABN remains intact and independent, it is likely that it will face growing pressure to tighten credit standards, such as writing down receivables much more quickly.

LID Ltd. filed for bankruptcy protection in New York last Friday, listing liabilities of $143.9 million against assets of $157.8 million. The company said in a statement that it had worked to reduce debts and operating costs, but blamed one of its banks for forcing it to file.

M. Fabrikant negotiated a refinancing package in January.

TRADE: The March 12–15 CIBJO Congress in Cape Town, South Africa, concluded with a reevaluation of the organization’s role in the industry. More attention was paid to corporate and industry standards of responsibility than to the trading and nomenclature standards that CIBJO was originally formed to administer.

Going forward, the confederation of 42 national trade organizations agreed to broaden its role into a parliamentary body for the industry. Two action items coming from the Congress were the formation of a committee to create a new “Blue Book” standardizing precious metals tolerances among member nations, and a retailers’ guide for selling diamond jewelry.

The Congress’s South African hosts seized the occasion to stress the need to continue building employment and infrastructure by repatriating diamond manufacturing and processing operations. Diamond industry representatives spoke of serving the broader issue of social responsibility.

ILLICIT DIAMONDS: Kimberley Process administrators are keeping a close watch on Zimbabwe following a rush to the Marange diamond area in the eastern half of the nation.

Local press reports state that an estimated $300 million worth of diamonds were dug from the area in the six months before police sealed access in mid-March. Before then, the papers carried accounts of crowds of diamond sellers standing along both sides of the highway leading to the mine – many offering goods at allegedly distress prices.

The crisis began last August after the government marketing agency, Minerals Marketing Corporation of Zimbabwe (MMCZ), revoked the license of a British firm, African Consolidated Resources, and announced that the alluvial fields would be opened to local citizens, provided they sold the diamonds they found to the MMCZ.

That caused hundreds of thousands of Zimbabweans, whose wages have fallen to near nothing as a result of the hyperinflation of the country’s currency (caused by the nation’s ongoing political crises), to flood the area in search of diamonds. Many of the goods recovered were then reportedly smuggled to neighboring South Africa instead of being sold to the MMCZ.

Several months later, Zimbabwean President Robert Mugabe announced that the government would seize all diamond operations, including the three kimberlite deposits: River Ranch, RioZim, and Murowa.

Over the past few years, the European Union and the International Monetary Fund have imposed sanctions on the country as Mugabe has moved to eliminate all democratic opposition and remove or neutralize independent economic institutions.

Russell Shor
Senior Industry Analyst

In 2005, they brought in larger machinery and produced 8 tonnes of various grades of variscite mixed with matrix material. Mining in 2006 yielded 4-5 tonnes of mixed-grade variscite, which was greener and of better quality than the previous material. Due to the remoteness of the area and the oppressively hot climate, mining has taken place for only a 10-day period once a year during the cool season (May through September). During the 2006 campaign, the mining crew consisted of five people and employed a bulldozer, backhoe, and two trucks.

The variscite from Australian Outback Mining’s claim was first sold at the 2006 Tucson show as slabs and partially polished pieces. During the 2007 show, they had both rough and polished variscite; they reported that about 10 kg had been fashioned thus far as cabochons and carvings. The color ranged from light to dark yellowish green, with attractive patterns created by orangy brown veining. Archer and Vaughan said that the variscite is not treated or stabilized in any way.

In March 2007, particles of native gold were discovered in this variscite by researchers at CSIRO (Australia’s Commonwealth Scientific and Industrial Research Organisation). Working under a funded research grant, the origin, characterization, and formation of the gold particles in the variscite is being investigated by Drs. Ernie Nickel, Robert Hough, and Elena Hancock at the Australian Resources Research Centre in Perth. GIA also recently documented gold inclusions in the variscite, after receiving a donation of several polished plates from gem cutter Dalan Hargrave (GemStarz Jewelry, Spring Branch, Texas). Microscopic examination revealed isolated tiny brassy inclusions in three of the slabs, and EDXRF spectroscopy detected traces of gold in those samples. LA-ICP-MS analysis of an inclusion in one sample by GIA research scientist Dr. Andy Shen confirmed its identity as gold. 

This entry was prepared by Brendan M. Laurs, Gems & Gemology editor, and Eric A. Fritz and John I. Koivula of the GIA Laboratory in Carlsbad. For more gemological developments from around the world, read the Gem News International section in every issue of Gems & Gemology. To subscribe, 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.

On April 14, trade industry members, the media, and other interested participants are invited to attend GIA’s “GemFest Basel” for a discussion of “Sorting It All Out: GIA’s Pearl Report and Industry Opportunities.”

Tom Moses, senior vice president – GIA Laboratory and Research, said, “GemFest Basel offers the pearl industry the opportunity to discuss the structure and content of the new GIA pearl report with more detail than has been shared previously.  This report comes with more descriptions of pearl attributes than ever before, which reflects both the tremendous growth in the pearl industry and the industry’s greater input into the report itself.”

“In addition,” said Moses, “this event features a panel of some of the world’s most influential pearl industry specialists, who will add their views on the state of the pearl industry and voice their thoughts on pearl reports in general.”

The event will begin with a presentation by Ken Scarratt, director – GIA Research, Thailand, who will offer details into the Institute’s updated pearl report. 

Joining Scarratt on the panel will be Shigeru Akamatsu, senior manager, Sales Division, K. Mikimoto & Co. Ltd.; Jacques Branellec, managing director, Jewelmer International Corporation; Martin Coeroli, general manager, Perles de Tahiti; and Nicholas Paspaley AC, executive chairman, Paspaley Pearls Group of Companies.

The event will be held at the Hall Montreal, Basel Convention Center, on Saturday, April 14, 4 p.m. to 6 p.m.  GIA asks that attendees let the Institute know they intend to participate by sending an e-mail by April 5 to events@gia.edu.

GemFest attendees, GIA Alumni, and industry members are also invited to a reception and GIA Alumni reunion immediately following GemFest 2007. 

Admission to GemFest Basel is free, but space is limited and will be filled on a first-come, first-served basis.  GIA Alumni who attend will receive six Carat Points.

In addition, the new GIA Collection poster for 2007 will be given out to GemFest Basel attendees while supplies last.  The poster features the 2002 AGTA Spectrum Award–winning ring, “Neptune’s Birth,” which is fashioned from natural conch shell, white Akoya cultured pearls, and pink diamonds.

In GIA’s Gem Identification Lab class, students learn effective testing procedures and identification skills. Through on-site demonstrations and hands-on practice using hundreds of gemstones, students see and test the actual gem materials found in today’s market.

In addition to GIA’s Diamond Grading, Colored Stone Grading, and Pearl Grading Lab classes, the Institute offers a five-day Lab class dedicated to the fundamental skills of identifying gems.

Here students gain confidence and proficiency using the tools of the trade: a microscope, refractometer, polariscope, dichroscope, spectroscope, and loupe. Their instructors carefully explain key tests and offer individual coaching as students use this equipment to identify natural gemstones, imitations, and synthetics.  

In April, the following Gem Identification Lab classes, other Lab classes, and Student Workrooms will be held in these cities: 

• New York: Gem Identification (April 2 – 6, and on Saturdays, April 7 – May 5), Diamond Grading (April 30 – May 4), Colored Stone Grading (April 23 – 25), Pearl Grading (April 2), and Student Workroom (April 9 – 13 and 16 – 20).
• Chicago, IL: Gem Identification (April 16 – 20), Diamond Grading (April 9 – 13), Colored Stone Grading (April 23 – 25), Pearl Grading (April 26), and Student Workroom (April 17 – 22).
• Carlsbad:  Gem Identification (April 2 – 6, and at night, April 16 – May 1), Colored Stone Grading (April 9 – 11), Pearl Grading (April 12), and Student Workroom (Monday – Friday, 9 a.m. to 12 p.m. and 1 p.m. to 4 p.m.).

For information on U.S. Lab classes or other GIA seminars click here, or call 800-421-7250, ext. 4001, or e-mail  GIA Education. Outside the U.S., call 760-603-4001. To apply online click here.