G7 Plans Russian Diamond Crackdown, Industry Says ‘Not so Fast’

There are three very good reports on the G7 and what their concerns are with Russian diamond sanctions. There’s a simple solution, and yet there are concerns that stand in the way of doing the right thing. – gr

Caption: Meeting with ALROSA CEO Sergei Ivanov (image above).


Isobel Asher Hamilton
September 21, 2023

You’d think diamonds could take a little pressure.

The Financial Times reports that a G7 plan to crack down on sanctioned Russian diamonds, which is due to come into force next year, has run into resistance from big industry players. Well, they can be an extremely hard bunch.

In The Rough (and the Red)

The problem with banning diamonds from one particular country is that when raw diamonds are mined, they’re usually shipped to another country to be cut and polished. There, they’re mixed in with gems from all over the world and their provenance becomes nigh impossible to ascertain.

Belgium, home of Antwerp where 84% of the world’s rough diamonds pass through, was the country holding off on Russia sanctions but has now relented, and is key to drawing up the new plans for tracking down diamonds’ origins. The Belgian government is close to announcing a traceability system, but 16 major diamond manufacturers and traders have written a feisty letter accusing the Antwerp World Diamond Centre (AWDC) of lacking “transparency, accountability and inclusivity” in its plans. Cutting.

No matter the outcome, Russian diamonds also are contending with market forces. Russian diamond miner Alrosa PJSC announced on Wednesday it’s halting sales of rough diamonds this month and next, citing weak demand. The rough diamond trade as a whole has been feeling a bit of a pinch lately:

  • At the beginning of this month, Bloomberg reported that rough diamonds were experiencing a “pricing free fall” as demand for lab-grown gems eclipsed gems dug from the Earth. Incidentally, canary futures are also down.
  • Diamond giant De Beers brushed the price fall-off as a bit of normal market fluctuation. “There has been a little bit of cannibalization,” Paul Rowley, head of De Beers’ diamond trading business told Bloomberg, but he added: “We see the real issue as a macroeconomic issue.”

Timing’s Everything: Although the market for rough …

Tap here to read the complete G7 report in the DailyUpside.com

G7 to Launch Russian Diamond Ban in bid to Curb Revenues

By Julia Payne and Polina Devitt
September 15, 2023


BRUSSELS/LONDON, Sept 15 (Reuters) – The Group of Seven (G7) countries is expected to announce an import ban on Russian diamonds in the next 2-3 weeks, Belgian officials told reporters on Friday, in a bid to tighten a squeeze on Russia’s capacity to finance the war in Ukraine.

The plan could transform the global diamond supply chain, but implementation will depend heavily on India, whose diamond industry employs millions of people who cut and polish 90% of the world’s diamonds.

The ban, proposed by Belgium where the city of Antwerp is the world’s No. 1 diamond trading hub, will come into effect on January 1, one of the government officials, who asked not to be named, told reporters in Brussels.

If it goes ahead as anticipated, it would split the global consumer diamond market. The G7, which accounts for 70% of the consumer market, would no longer accept diamonds from Russia, the world’s biggest producer of rough diamonds.

The global natural diamond jewellery market is estimated to be worth $74bn in 2023 © Francois Lenoir/Reuters

“We’re talking about restructuring a global market,” the official said, acknowledging that the system wouldn’t work perfectly right away and the G7 was still evaluating the details of Belgium’s proposed plan.

“Russia is the biggest supplier globally. With this system, we are cutting them out, leaving them in an inferior market with lower prices. We are slashing the financial flows from this sector.”

Efforts to reduce Russia’s diamond revenues and build on Washington’s sanctions on Russia’s Alrosa (ALRS.MM), the world’s largest diamond producer, have been discussed among G7 leaders since last year.

Alrosa declined to comment.

The EU bought 1.4 billion euros ($1.5 billion) worth of Russian diamonds last year, based on data from Eurostat, as the EU has not banned Russian gem imports nor blacklisted Alrosa.

Anglo American Plc’s (AAL.L) diamond business De Beers said the diamond industry aims to support the G7 efforts.

“The question is how we can do this collectively and effectively so that all parts of the industry – large and small – are represented,” it said in an email.

Before Russia’s war with Ukraine, De Beers and Alrosa led global rough diamond sales, with De Beers accounting for 33% in value terms and Alrosa for 24%, based on a De Beers report.

As of 2021, global rough diamond sales totalled $16.4 billion, while demand for polished diamonds was $28 billion, the De Beers report showed. Demand for natural diamond jewellery stood at $87 billion, with the United States the largest consumer.


Tap here to continue reading Reuters feature report.

Report #3

Diamond Industry Gears Up For G7 Russia Ban

By Rob Bates | September 20, 2023
JCK Online

The World Diamond Council (WDC) and the Belgian government have released dueling plans detailing how the industry might fulfill the Group of Seven’s (G7) desire to bar Russian polished gems from member countries.

At an event Tuesday night at the residence of the Belgian consulate general, Belgian Prime Minister Alexander De Croo told attendees that “Russian diamonds are blood diamonds,” and that he hoped they would be banned from G7 countries beginning Jan. 1, 2024.

“The G7 has a goal of banning Russian diamonds from the market,” De Croo told JCK. “[We still must go] the final mile. We are extremely happy to play a role in this [effort]. We are a partner in this.”

The proposal introduced by the Belgian government—which speakers at Tuesday’s event called “the EU proposal”—is “good and strong and makes sure that we don’t have to have second thoughts about what is being sold,” De Croo told JCK.

Under both the WDC and Belgian proposals, anyone importing rough or polished diamonds into a G7 country, including the United States, would be required to declare on their invoices that their shipments do not contain Russian diamonds. (Current U.S. rules allow Russian polished, under the doctrine of “substantial transformation.”)

Tap here to read Rob Bates’ report on the G7.

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