• Industry Analysis: The Economy May Slow, but Diamond Cutters Won't
  
• From Gems & Gemology: Field Study of Paraíba-type Tourmaline Mines in Mozambique
  
• BBA Program Reaches New Heights With First Grad
  
• Staff Honored for 25 Years of Dedicated Service
  
• Outstanding Grad of 2008 Chosen for Commitment to Studies
  
• Winter 2008 Loupe Now Available
  
• Don't Miss the Feb. 29 Continuing Education Recognition Program Deadline!
  
• From GIA Education: Use Integrated Decision Making to Solve Ethical Dilemmas
  
• Reserve Your Seat in One of GIA's Lab Classes
  

Industry Analysis: The Economy May Slow, but Diamond
Cutters Won't

As economists debate the likelihood of a U.S. recession, diamond manufacturers in India, Israel and New York say they plan to sell to emerging markets rather than slow their production of polished stones.

Manufacturers continue to be more concerned about future supplies -- largely because of rough being redirected to African diamond operations and changes in the De Beers Diamond Trading Company (DTC) sightholder list -- than they are about the prospect of diminished demand in the U.S., even though it accounts for about 48% of world diamond sales.

"We anticipated the slowdown since last summer and have been sending our production to the fast-growing markets of the Far East and the domestic [Indian] retailers," said one major Indian manufacturer.

China, India and the Middle East have seen double-digit growth during the past five years. They still represent a relatively small portion of world demand, however, leaving some executives concerned about accumulating inventory and increasing debt.

Those diamond manufacturers who have scaled back their polishing operations because of the economy acknowledged that other, competing manufacturers will certainly purchase the rough they don't use, so it is unlikely there will be any decrease in polished diamond supplies this year. This is supported by the fact that southern African "beneficiation" diamond cutting operations will undoubtedly continue to grow and, given the enormous political pressure for their success, will not be subject to supply cutbacks.

Despite slower-than-expected U.S. holiday sales, the DTC released large allocations of rough and raised prices an average of 3.5% at the Jan. 14-18 sight. Contrary to initial reports, the sight -- which totaled nearly $600 million -- included increases across the board, not just on the large, high-quality material.

Diamond manufacturers see this as a clear sign that the DTC has truly abandoned its longtime "custodianship" of the diamond market, withholding supplies and stabilizing prices when the market turned soft.

While most U.S. retailers will turn in positive numbers for 2007, because the slowdown did not begin in earnest until September, economists warn that 2008 may bring sales declines. This will force some retailers to retrench and lead to consolidation within the wholesale and manufacturing sectors of the industry.

Indeed, that was the mood in Japan, the world's second largest consumer diamond market. Dealers there are very pessimistic about their prospects for 2008, according to a Jewellery News Asia (JNA) survey. Diamond dealers who responded to JNA's spot survey said they believe sales will decline around 5%-15% or, at best, see a single-digit increase this year against a very lackluster 2007.

RETAIL: Demand for larger diamonds and top colored stones was the one bright spot for U.S. retail jewelers in 2007, but according to a just-released luxury market survey, that spot may be dimming as well.

According to a survey conducted by Unity Marketing, luxury consumer confidence for the final quarter of 2007 plunged to its lowest level since the survey began four years ago, as wealthy consumers adopted an increasingly pessimistic view of the U.S. economy. The report noted that spending among this group fell 20% during the holiday season and will continue to be soft as an increasing number of respondents claimed they would continue to cut back during 2008.

Confidence among general consumers declined in January, according to the Conference Board's monthly survey. January's Consumer Confidence Index fell to 87.9 from 90.6 in December, suggesting that consumers may continue to restrain their spending.

The Board found strong pessimism about the direction of the economy over the coming six months, particularly business conditions and employment prospects.

MACRO: The world stock markets continued their volatility, while gold and platinum soared to all-time records in the wake of economic uncertainty. This week opened with gold spotting at $927.50 per ounce, while platinum's per-ounce price broke the $1,700 barrier.

The U.S. Federal Reserve, which last week issued its steepest interest rate cut in more than two decades (0.75%), added another half percent drop at this week's meeting, hinting at even further cuts if the economy fails to respond.

The downturn in the U.S. housing market and the related subprime mortgage meltdown are taking most of the blame for the current turmoil. Sales of new homes fell last year by 26%, the steepest drop since records began in 1963, the U.S. Commerce Department said on Monday. In December, the median price of a new home was down 10.9% from December of the previous year.

One bright spot appeared this week as the U.S. Commerce Department reported that demand for big-ticket durable goods rose 5.2% in December, more than a percentage point above what economists had predicted, prompting some to say that the economy has more underlying strength than many analysts believe.

The U.S. Congress is considering an economic stimulus package to jump-start consumer spending. Economists remain divided over whether or not the legislative package or the Federal Reserve rate cuts will have any real effect on improving the economy.


Russell Shor
Senior Industry Analyst

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Figure 1: Most of the production of copper-bearing tourmaline from Mozambique has come from artisanal miners using simple hand tools. Photo by Brendan M. Laurs.

Figure 2: A variety of colors is seen in this parcel of waterworn pebbles represented as unheated Cu-bearing tourmaline from Mozambique. Three of these samples proved to be imitations: an amethyst, a light yellowish-green fluorite and a light bluish-green glass. Photo by J. C. Zwaan.

From Gems & Gemology: Field Study of Paraíba-type Tourmaline Mines in Mozambique

Gems and Gemology (G&G) Editor Brendan Laurs and Netherlands National Museum of Natural History researcher Hanco Zwaan traveled to Mozambique to explore the new Paraíba-type tourmaline deposits. Following is their report:

We visited Mozambique's copper-bearing tourmaline deposits to obtain information on their location, geology and mining in late August and early September 2007. We were hosted by Mozambique Gems in Nampula, which owns the first claim staked in the area for this tourmaline in 2003.

The Paraíba-type tourmaline deposit is located near the eastern border of the Alto Ligonha pegmatite district, adjacent to the village of Mavuco in northeastern Mozambique. An approximately 3 km² area has been mined for the tourmaline, which is hosted exclusively by secondary deposits (paleoplacers) buried beneath as much as 5 meters of soil. The paleoplacers rest directly on top of weathered bedrock. The extent to which gem tourmaline is distributed in the paleoplacers has not yet been established.

To date, most of the copper-bearing tourmaline mining in the Mavuco region has taken place in the area to the south and east of the Mozambique Gems claim by local diggers using simple hand methods (figure 1). The miners use picks and shovels to remove the overburden and dig through the material for gems with their picks when they encounter the tourmaline-bearing horizon. Although many stones are probably overlooked in the process, water for washing the soil is scarce or unavailable to the artisanal miners during most of the year; the paleoplacers are infiltrated by clay so dry screening is not feasible.

At the time of our visit, Mozambique Gems was preparing for a major mechanized operation on their 300-hectare mining concession. They had completed a comprehensive environmental impact report and performed systematic mapping and test pitting of their claim. They were also constructing a washing plant that will be capable of processing 150-200 tons of material per day. Mozambique Gems expects to complete the washing plant in early to mid-2008 and then will begin to simultaneously mine and reclaim the pits. The owners of the surrounding concessions have consolidated their claims and are making preparations for mechanized mining.

We purchased samples from a parcel of rough material that was reportedly mined from the Mavuco area while we were in the regional capital of Nampula (about 90 kilometers north of Mavuco). The parcel consisted of waterworn pebbles -- all reportedly unheated -- in a range of colors and sizes (figure 2). From the smaller pieces, they obtained samples that were representative of the color range in that parcel. Subsequent laser ablation-inductively coupled plasma-mass spectrometry (LA-ICP-MS) analyses were done to chemically characterize the tourmaline, but the data showed that three of the 20 pebbles were amethyst, light yellowish-green fluorite and light bluish-green manufactured glass. A light green pebble obtained directly from one of the miners at the pits was also identified as fluorite. Imitations, regardless of whether they are unknowingly or intentionally offered to buyers, are a concern in any gem mining area. Separating them out can be particularly challenging when dealing with multicolored parcels of waterworn rough.

The future production of copper-bearing tourmaline from Mozambique should be bolstered by the mechanized mining activities that are due to commence in the coming months. An article with more information on this tourmaline has been submitted to Gems & Gemology (G&G).

Laurs and Zwaan were guided by Salifou Konate and Chirindza Henrique from Mozambique Gems, which is owned by Moses Konate. For the latest gemological developments from around the world, read the Gem News International section in each issue of G&G. To subscribe, click here or contact Circulation Coordinator Debbie Ortiz toll-free at (800) 421-7250, ext. 7142. Outside the U.S. and Canada, call (760) 603-4000, ext. 7142.

Wade H. Clar Jr., first graduate of GIA's Bachelor of Business Administration program. Photo by Valerie Power/GIA.

BBA Program Reaches New Heights With First Grad

GIA's newest addition to the School of Business, the Bachelor of Business Administration (BBA) degree-completion program, has been preparing students for lasting careers in the gem and jewelry industry since its inception in January 2006 and, last December, Wade H. Clar Jr. became its first graduate.

The young degree-holder from Canandaigua, New York, always wanted to obtain a business-focused degree after high school, but never planned on one related to the jewelry industry. Clar, who moved to Southern California in 2004, said he became intrigued by the opportunities in the jewelry industry after he met Dr. Tim Malone, an associate professor for GIA's School of Business.

"I stepped back to re-examine my direction and objectives in completing my degree, realizing I wanted more than anything to have a career focus," Clar said.

"I could have attended hundreds of universities and upon graduation found myself with no specific career direction. On top of that, I have developed a passion for my industry of choice -- how lucky is that?" Clar added, noting that he anticipates his time at GIA will help him find a career -- and not just a job -- he can grow within.

According to Dr. Mink Stavenga, dean of GIA's School of Business, industry focus is one of the biggest benefits to the BBA program.

"Students are learning business principles that can be applied to any field, but our coursework is meant to provide practical examples that relate to the global gem and jewelry industry. This type of specialized training helps to give students a clear career path and prepares them for work in this fast-changing industry," he said.

Stavenga said he hopes students like Clar can be ambassadors for GIA and represent the many hundreds of BBA graduates to come.

"The ultimate measure of the success of our programs is the success of our graduates down the road, and I have every confidence that Wade and our other dedicated students will perform well at a high level and make us very proud," Stavenga said.

For more information about GIA's School of Business, click here or contact a GIA Admissions representative at (800) 421-7250, ext. 4001.

Online and On Campus Spring quarter classes begin April 21. Save $150 when you enroll in any online course!

In New York, Lisa Garris (far right), human resources manager, was one of the luncheon attendees to honor the GIA 25-Year Club members Ivy Cutler (left) and Sylvia Sideris (middle). Photo by Lisa Garris/GIA.

GIA 25-Year Club Members at the Carlsbad Campus. Photo by Eric Welch/GIA.

Staff Honored for 25 Years of Dedicated Service

Five staff members have been inducted into GIA's highly regarded "25-Year Club," which honors employees who have worked at GIA for 25 years. The new honorees are part of the 44 employees in the club and work in a variety of GIA departments, including Client Services, Inventory Control and the Laboratory.

This year's honorees are Heather Fretes, Inventory Control coordinator (New York); Sonia Pastoret, Client Services representative (New York); Angelique Giaimo, Laboratory training and development manager (Carlsbad); Mary Smith, administrative assistant to Laboratory Director (Carlsbad); and Dr. Jim Shigley, distinguished Research fellow (Carlsbad).

The new members in the 25-Year Club were honored at a luncheon ceremony -- one in New York and the other at GIA's headquarters in Carlsbad, California -- and all members of the club throughout the Institute were invited to attend. Each new honoree was presented with a personalized, engraved Cartier watch and shared his or her most memorable moments with the organization and their visions for the future.

"The substantial number of 25-Year Club members we have is a testament to this Institute's legacy of loyalty and commitment," said Donna Baker, president of GIA. "These individuals have devoted a significant amount of time to GIA and its nonprofit mission, endlessly perfecting their professional and personal skills and giving back to the industry with their hard work and effectiveness. It is astonishing for any organization to enjoy having so many top professionals who combine their impressive depth and range of knowledge with their amazing, ongoing length of service."

Pastoret said she is honored and proud to join the 25-Year Club. "GIA is a truly special place filled with talented individuals who have contributed to the many milestones the Institute has reached throughout the years."

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Keith Hannum, G.G. Photo by Dana Smith.

Outstanding Grad of 2008 Chosen for Commitment
to Studies

Keith Hannum, who recently earned his Graduate Gemologist (G.G.) diploma, was named GIA's Outstanding Distance Education Graduate of the Year for 2008.

The award is presented annually by the Distance Education and Training Council, a nationally recognized accrediting agency approved by the U.S. Department of Education that promotes sound educational standards and ethical business practices. The honor is given to a GIA Distance Education student who upholds high standards of academic and personal excellence throughout his or her studies.

"It's very humbling and a huge honor for me to earn this award," said Hannum, an employee of Smyth Jewelers for the past eight years. "I was really floored by the whole thing and I know the management here at the store was happy to see me honored for my hard work."

When his fellow employees at the Timonium, Maryland, store approached him about filling their need for another staff gemologist, Hannum jumped at the opportunity. He originally planned to study on campus at GIA's headquarters in Carlsbad, California, but when he found out he could complete the program faster through Distance Education, he enrolled right away.

Hannum began his coursework for GIA's G.G. diploma in July of last year and completed it by November.

"I looked upon the program as a huge challenge. Everyone I dealt with at GIA was helpful and supportive; with their assistance I was able to meet the challenge," Hannum said. "It was a great feeling and a huge confidence boost."

Hannum helps with appraisals, quality control and insurance documents in his new role as one of seven G.G.s on staff at Smyth Jewelers. He said interacting with customers is a huge part of his job and he feels more comfortable helping them after completing the G.G. program.

"I think I speak for our entire staff in saying we are extremely proud of Keith. This award is another example of his incredible work ethic," said John Jackson, general manager for Smyth Jewelers. "The knowledge gained by taking this GIA program enables people to transcend to new heights in our industry."

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Winter 2008 Loupe Now Available

The Winter 2008 issue of The Loupe: GIA World News leads with a cover story on GIA's international expansion. It gives a historic overview of changes in the gem and jewelry industry and highlights recent GIA developments in Hong Kong, Bangkok and Johannesburg. The article is accompanied by a map that illustrates GIA's "global footprint."

This issue's stories also take you on visits to far-flung corners of the world, including a photo spread from Gems & Gemology Editor Brendan Laurs' trip to Mozambique, a Course Development package on China's akoya pearl farms, Russell Shor's overview of the Israeli diamond trade and Robert Weldon's coverage of the Madison Dialogue Ethical Jewelry Summit held in Washington D.C. last October.

The Loupe also pays tribute to GIA's former Vice President of Education Brook Ellis and his years of leadership and contributions to the jewelry industry and the Institute. An overview of the GIA Museum's Historical Collection, with highlights of some of the stories behind its jewels, such as a diamond brooch from 19th century Russia that survived World War II, is also included.

Also, get to know GIA alumni, like Jeong-Yeon Lee and her unique creations inspired by traditional Korean artwork, and Elise Skalwold, who offers suggestions on how to optimize your learning experience after earning your GIA diploma.

To sign up for a free subscription to The Loupe: GIA World News, e-mail LoupeSub@gia.edu.

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Don't Miss the Feb. 29 Continuing Education Recognition Program Deadline!

Mark your calendar if you registered for the 2007 Continuing Education Recognition Program. Feb. 29 is the deadline to complete your five required assignments and contact us to petition to graduate. Find out more about the Continuing Education Program and how to register for 2008.

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From GIA Education: Use Integrated Decision Making to Solve Ethical Dilemmas

While there is widespread agreement that a strong ethical foundation is important to the success of any jewelry business, a jewelry store manager might ask: How do I make a rational business decision when faced with an ethical dilemma?

This type of situation could involve a range of people, including employees, customers, suppliers or business associates, but regardless of who is involved, it's critical that you make an informed, conscientious decision to resolve it. If there is an actual -- or even perceived -- breach of ethics, your integrity and reputation, along with that of the business itself, is likely to suffer. That negative impact on business operations and profits could be long-lasting -- or even permanent. Your customers and associates will have much more confidence in you for being trustworthy, honest and reliable in all of your actions.

Experience has shown that managers too often make ethical decisions in haste, which can result in some serious repercussions. Your clear understanding of the decision-making process can help you avoid any ethical lapses.

Decisions involve making choices and the results reflect on how well that choice was made. To appreciate the outcome, you must consider the process involved in getting there. Many jewelry store managers use the integrated approach, which involves considering the legal, economic and moral perspectives of a situation, to help them resolve ethical dilemmas. Achieving a balance between them will help you guarantee a reasonable and objective resolution, in contrast with a decision you base solely on one of them (economics, for instance).

The legal perspective involves looking at the lawful requirements and existing legislation applicable to the jewelry industry. You should consider both at the outset of your decision-making process, since obeying laws is mandatory.

The economic perspective covers primary business objectives such as maximizing profit, achieving efficiency, gaining new customers and competing with other firms in the industry. When considering the economic aspects of a situation, however, you must exercise your moral judgment.

The moral perspective is a gray area, simply because morality is subjective. But there should be no doubt that it requires you to consider not only personal gain when making a decision, but also the consequences of unethical actions. The moral point of view supports the notion that jewelry managers should act fairly and in the best interest of their clients.

The integrated approach essentially represents the goals of the majority of jewelry managers: making a profit, operating a successful business, following the rules, satisfying clients and upholding a positive reputation. If you fail to achieve a balance between the legal, economic and moral perspectives, you are more likely to make shortsighted decisions, with potentially disastrous results.

The next time you are closing a deal with a client, training employees or meeting with a supplier, be certain to make choices that will satisfy all parties affected by your decision: use the integrated approach.

GIA's Ethics and Law course in the School of Business will help you learn more about running an ethical jewelry business.

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Students gain the practical experience needed to succeed in the jewelry industry in GIA's Lab classes. These classes also provide the perfect opportunity for those already established in the trade to refresh important gemological skills. GIA Lab classes offered through early March 2008 are as follows:

For more information, see Gemology and Jewelry Manufacturing Arts Lab class descriptions. You can also e-mail GIA Education, apply online, or call (800) 421-7250, ext. 4001, for more information. Outside the U.S., call (760) 603-4001.

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