The De Beers Diamond Trading Company (DTC) will reduce its sightholders list when the next client term begins in April 2008, a key executive told diamond industry leaders.

Varda Shine, DTC managing director, told Israeli clients at a June 20 meeting that the company will only be “able to offer an economically efficient level of supply” to a smaller number of sightholders than under the current contract. She cited projected lower output from De Beers’s own mines next year and supply pressures from African producers to polish more diamonds within their borders.

In addition, Russia’s diamond mining and marketing firm, Alrosa, will end all sales to the DTC in 2010, after a graduated scaling back from $400 million next year to $275 million in 2009, pursuant to an agreement with the European Commission.

There are 93 sightholders in the current term, which ends in April 2008. That number represented an increase of 11 clients from the previous one. The steep cuts in client rolls in 2003 (at the outset of that previous term) brought a number of lawsuits from former clients and smaller dealers.

DTC’s claim that it will be unable to adequately supply all of its existing clients has been widely interpreted to mean that shortages are developing in the marketplace. However, since the DTC’s market share has fallen below 50% (compared to approximately 80% a decade ago), substantial quantities of rough are still being sold by Alrosa, BHP Billiton, and Rio Tinto, as well as by numerous independent producers. Thus, the DTC’s announcement of “reduced availability” doesn’t mean that there is less rough available to the market – it is more of a change in the channel through which goods are flowing.

In the past, when the DTC represented a centralized source of information, it was easy to track the quantities of rough in the market. Today, it is much more complicated. However, given the levels of industry bank debt and rising inventories of many types of polished diamonds (largely under 2 ct.), it’s likely that whatever shortages may exist are measured against manufacturing capabilities, not consumer demand.

DIAMOND FINANCIALS: Diapason Commodities Management, a Lausanne, Switzerland–based firm, is creating an investment fund based on very large diamonds.

To back this fund, Diapason is raising $400 million to acquire diamonds worth over $1 million. The fund will hold most of the stones, earning money on their anticipated appreciation through limited sales.

Although prices for very large diamonds have risen substantially in the past few years, fund managers noted in a statement that diamonds have lagged behind other commodities  and are due for an upswing, particularly because the number of extremely wealthy individuals is also rising rapidly.

In addition to this fund, diamond price list publisher Martin Rapaport announced that a plan is being implemented to trade diamond futures on a commodity exchange. He did not elaborate, except to note that futures contracts would bring more liquidity and price transparency into the market.

Briefly, a futures contract allows the producers of a commodity to sell their materials before they have gotten to market; they do this by promising to deliver a specific quantity on a specific date at a contracted price. This allows the producer to plan further in advance and protect itself from dramatic changes in the price of its goods. The futures contract can be resold on a commodities exchange, and prices for it fluctuate similar to stock prices. Most contracts are cashed out before the execution date, and only a minority result in physical delivery of the commodity. However, laws in the U.S. require the exchange where the contracts are traded to hold sufficient stocks on the sellers’ behalf in the event the buyer chooses to take delivery.

SYNTHETICS: A report by Bloomberg.com notes that current output of synthetic diamonds from all producers, but primarily Gemesis of Sarasota, Fla., is about 100,000 carats per year, compared to more than 175 million carats of natural diamonds. The Bloomberg report quotes market analysts who claimed that output of synthetics will increase to about one million carats yearly when other producers, including Apollo Diamond Co., begin commercial production. The analysts maintained that the average price for synthetic diamonds was $2,500 per carat, against an average of $8,000 per carat for a natural diamond of similar weight. However, the vast majority of synthetics in the market are yellow, not colorless.

Some analysts quoted believed synthetics would cut into sales of large diamond companies, while others said synthetics would be a market segment of their own, augmenting supplies of natural diamonds.

MACRO: Consumer confidence took a greater-than-expected drop in June as shoppers grew more concerned about the job market, inflation, and home prices, the Conference Board reported in its monthly survey.

The Conference Board’s Consumer Confidence Index fell almost 5 points to 103.9, down from a revised 108.5 in May, reaching its lowest level since August 2006, when the reading was 100.2. Analysts had expected a reading of 106.

“A perceived softening in present-day business and employment condition is the major cause of the drop," said Lynn Franco, director of The Conference Board Consumer Research Center in a statement. “Looking ahead, consumers remain subdued about short-term economic prospects. All in all, the glass remains half empty and half full.”

The Present Situation, which measures how shoppers feel now about the current economic conditions, fell to 127.9 from 136.1 in May. The Expectations Index, which measures shoppers’ outlook for the next six months, edged down 87.9 from 90.1.

Russell Shor
Senior Industry Analyst

While in Minas Gerais in August 2006, one of these contributors (MM) purchased two loupe-clean pieces of rough that were represented as Imperial topaz, which he subsequetly had cut (see figure). The two pieces had an irregular triangular shape, which the dealer had indicated would maximize the yield from the rough. The color and the vitreous-to-subadamantine luster resembled Imperial topaz.

The two pieces (1.18 and 2.03 ct.) were analyzed in the Department of Earth Science of the University of Rome “La Sapienza,” and the following gemological data were obtained: color—orange-yellow-“rose”; diaphaneity—transparent; RI—n_o = 1.770 and n_e = 1.761; birefringence—0.009; optic character—uniaxial negative; SG—4.05; fluorescence—inert to long- and short-wave UV radiation; and no inclusions were seen with a gemological microscope. These properties identified the pieces as corundum; their synthetic origin was strongly suggested by the lack of any natural-appearing inclusions (typical of flame-fusion material) and the relatively inexpensive price. The synthetic origin was confirmed by LA-ICP-MS analysis at GIA of one of the samples (donated to GIA by Mr. Macrì); the lack of Ga was characteristic of flame-fusion synthetic corundum. The instrument did find traces of Cr, Ni, Ti, and Mg, but no Be, which indicates that the color of the synthetic corundum was not influenced by Be-diffusion treatment.

Although the color and luster of this synthetic corundum are strikingly similar to Imperial topaz, the two materials can be easily separated by their standard gemological properties. Still, this imitation could present a problem for the unsuspecting buyer. Interestingly, similar-colored synthetic corundum was recently sold as spessartine in the Tanzanian market (see Winter 2006 Gems & Gemology, p. 282).

This entry was prepared by Michele Macrì and Adriana Maras of the University of Rome “La Sapienza,” Rome, Italy, and Andy H. Shen of the GIA Laboratory, Carlsbad. For more gemological developments from around the world, read the Gem News International section in every issue of Gems & Gemology. There’s also still time to submit your entry to the 2007 Gems & Gemology Challenge; entry cards are included in the Spring 2007 issue. To purchase a copy of the Spring issue or to subscribe, click here or contact Circulation Coordinator  Debbie Ortiz at toll-free 800-421-7250, ext. 7142. Outside the U.S. and Canada, call 760-603-4000.

Are you passionate about jewelry and thinking about a career in the industry? Then don’t miss the upcoming GIA Jewelry Career Fair on July 27 at the Jacob Javits Center in New York City. Career Fair is considered the industry’s premiere recruiting event and can get you up-close and personal access to high-profile companies, leading industry experts and even, ultimately – a profession in the jewelry industry.

Besides having the opportunity to interview with top employers, attendees also get to meet, listen, and learn from some of the industry’s most prestigious individuals through workshops, panel discussions, and career coaching sessions.

Many past Career Fair attendees have successfully found employment through the event. 

Sumeet Chordia—a Graduate Gemologist (G.G.), Graduate Jeweler (G.J.), Applied Jewelry Arts (A.J.A.), and who also holds a Jeweler Business Management diploma (J.B.M.)— attended a previous Career Fair and met with a Tiffany & Co. executive, a meeting that eventually led to a position for him there. Chorida believes Career Fair was instrumental in finding that first major job upon which he’s basing his career. He is now an apprentice for a high-end jeweler, Zonnie Shiek, in New York.

“The GIA Career Fair is the best platform for individuals interested in the jewelry industry,” said Chordia. “It brings together a variety of personalities and opportunities all in one setting. It gets the career process moving and makes job seekers aware of what's out there and where they want to go. Everyone seeking a career in the jewelry industry should attend Career Fair.”

Paty Mejorado, an Applied Jewelry Arts (A.J.A.) and Graduate Jeweler (G.J.), attended a previous Career Fair and found her present employer through the event. She is now a gemstone buyer for Los Angeles-based Star Ring and credits Career Fair for leading her to this role.

Mejorado explained, “My Career Fair experience came full-circle, as I not only found a career I am passionate about, but I walked away finding the most fitting professional role based on my skills and talents. I believe that because I attended Career Fair, I found my dream job.”      

In addition to the July 27 event being held in New York City, Career Fair will also be held on Oct. 19 at GIA’s Robert Mouawad Campus in Carlsbad, Calif. Like New York, the Carlsbad event will feature career coaching in addition to panel sessions and recruiting opportunities.

Job seekers can visit GIA Career Fair for more information, or call GIA’s Jewelry Career Fair hotline at 800-421-7250, ext. 4100. Admission for job seekers is free. Employers who wish to recruit at Career Fair can call 800-421-7250, ext. 4195.

GIA’s Jewelry Career Fair was founded by GIA and The Jewelers 24 Karat Club of Southern California.The prime sponsor for the New York Career Fair is The Nielsen Jewelry Group, and the prime sponsor of the Carlsbad event is the JCK International Publishing Group.

According to the Jewelers’ Security Alliance (JSA), the jewelry industry lost more than $105 million in 2006 due to crime. To help combat these losses, which frequently combine with the potential for violence, GIA was recently called upon by federal and local law enforcement to provide a full day of diamond and gem training. The event, the first of its kind for GIA, was held last month at GIA’s New York City education facility, with 24 law enforcement officials in attendance, including representatives from Belgium and Canada, as well as specialized NYPD detective units and FBI agents from New York, New Jersey, Baltimore, and Washington, D.C.

Spearheaded by GIA New York’s Director of Education, Dan Campbell, with support from the Institute’s Education and Laboratory departments, the program was designed to enhance attendees’ knowledge of gemology in order to aid in the investigation and prosecution of criminal cases. Campbell covered topics as diverse as diamond characteristics and inscriptions, colored stones, synthetic gems, and the use of microscopes and loupes. He also discussed standard methods for grading diamond clarity, color, and cut, along with determining carat weight. 

In addition, Ivy Cutler, a GIA staff gemologist who serves as the Laboratory’s lead liaison with law enforcement, explained how agents can use the expertise and services of the Laboratory to identify stolen jewels or assist with prosecution. Bob Frank, vice president of JSA, also presented an overview of JSA and its focus on industry crime.

Brian J. Nadeau, supervisory special agent for the FBI’s Major Theft Unit, played a key role in preparing for the training day program. "The FBI welcomes the opportunity to work with GIA in this effort,” said Nadeau. “Specialized training is always helpful to law enforcement, and this class provided FBI agents with good information to enhance future jewelry and gem investigations."

For GIA, deterring gem theft and assisting in the recovery of stolen property is an important part of its mission to protect the public’s trust in gems and jewelry. According to Larry Wright, GIA’s director of Corporate Security, the response from law enforcement officials attending the event was very positive.

“Our work with law enforcement is very important to us, and as a non-profit, public benefit organization, we see it as our role to help them in whatever way we can,” said Wright. “We’re very positive about the potential for this training program, which will ultimately benefit consumers and the trade alike on a global level.”

The GIA team, along with law enforcement, is now carefully evaluating attendee feedback to adjust, enhance, and further provide the highest standard of training and education to meet the specific needs of law enforcement. GIA may then make this training available in the future for other law enforcement agencies.

During his distinguished career, Moses has played a pivotal role in the Institute’s gem identification and research efforts. He has led groundbreaking studies of synthetic diamonds, HPHT-treated diamonds, diamond cut analysis, and Chinese freshwater cultured pearls, among many others. Through his lectures and articles, Moses has educated the industry on important gemological issues. Many of his articles have appeared in Gems & Gemology, the Institute’s quarterly professional journal, where he is an editor of the Lab Notes section and a member of the editorial review board.

Moses earned his Graduate Gemologist diploma in 1977 while working at GIA’s Santa Monica campus. In 1988, he transferred to the New York Laboratory and became a protégé of its longtime director, G. Robert Crowningshield. Moses was named vice president of Identification Services in 1988. Since being named to his current position in 2005, he oversees all GIA Laboratory and Research operations worldwide.

Moses also received GIA’s Richard T. Liddicoat Award for Distinguished Achievement, the Institute’s highest honor, in 2002.

Other AGS awardees announced earlier this month by AGS were Nathan R. Light, who will be honored with the Lifetime Achievement Award, and Ellen Lacy, who will receive the Triple Zero Award in the retail category. The three winners were selected by a committee of industry leaders and past recipients.

Tanzanite, one of the world’s most intriguing gemstones, originates from a single known source deep in the foothills of Mount Kilimanjaro in Tanzania, East Africa. The brilliant blue-violet stone, which is extremely rare, is the focus of a new GIA Museum exhibit that opens June 29 at GIA headquarters in Carlsbad.

As part of the opening event, GIA will host the fourth presentation in its 2007 Museum Lecture series, “The Tanzanite Foundation: A Celebration of Life.” Presented by Sarah Cort, managing director of the foundation and Anna Haber, operations director, the lecture reviewed the rich history of tanzanite, including its ties with the indigenous Maasai tribe of Tanzania. According to the Maasai, the rich blue color of tanzanite is sacred and conveys healing, while representing life. 

Believed to have formed about 585 million years ago, tanzanite was only discovered in the late 1960's.

“We’re very pleased to share these brilliant tanzanite designs over the next few months at GIA,” said Cort. “By increasing awareness of the beauty and importance of tanzanite, we can further protect the future of this valuable stone.”

“It is a privilege to have this exhibit here at GIA, especially since this is the last time these pieces will be displayed in the U.S.,” said Elise Misiorowski, director of the GIA Museum. “This unique jewelry collection demonstrates the versatility of tanzanite in modern jewelry design.”

During the lecture, Cort and Haber will showcase the 21 award-winning pieces from the Tanzanite Celebration of Life Jewelry Design Awards, held earlier this year in New York City.

These stunning pieces, produced by jewelry designers from every corner of the globe, include rings, pendants, earrings, necklaces, bracelets, head pieces, and even shoes. They will all be on display at GIA through Sept. 1, in an open-to-the-public exhibit in the S.Tasaki Student Lecture Hall.

Reservations for tours of the exhibit, must be made through GIA Guest Services by calling (760) 603-4000. Exhibit hours are Monday through Friday, from 8 a.m. to 5 p.m. 

The fifth annual Richard T. Liddicoat (RTL) Scholarship Fund Campaign is now underway. Contributors to the scholarship campaign, which runs through December, will be helping qualified individuals build their careers in the gem and jewelry industry.

The RTL Scholarship Fund was created by the GIA Alumni Association in 2003 to honor Liddicoat, the Institute’s longtime president and chairman, who is regarded as the “Father of Modern Gemology.”

The fund furthers Liddicoat’s personal mission of providing gemological education to worthy students by awarding two full scholarships each year in the GIA Graduate Gemologist (G.G.) diploma program. The winners will be announced at GIA’s Industry Awards Presentation at the Tucson trade shows in February 2008.

To date, the RTL Scholarship Fund has granted eight full scholarships. This year’s