• Industry Analysis: DTC Announces Client List, Price Increases
• From Gems & Gemology: New Rubies from Central Tanzania
• Susan Johnson Elected as ACCSCT School Commissioner
• Sinkankas Symposium Explores the World of Garnets
• From GIA Education: Blog Your Way to Better Business
• Find a GIA Lab Class in a City Near You

Industry Analysis: DTC Announces Client List, Price Increases

The De Beers Diamond Trading Company (DTC) announced its new official roster of clients -- 79 "sightholding groups" with an additional 30 affiliates. A number of these firms operate primarily in southern Africa: South Africa and Botswana now have 32 sightholders between them, while Namibia has 11. These operations were established as part of the countries' "beneficiation" policies designed to increase local employment in the industry.

The DTC also noted that rough diamond prices will have increased an average of 8.5% for the year by the April 28 to May 2 sight. The total was a combination of the 3.5% increase set in January, a "price creep" in February and March and an unspecified hike this week.

These percentages are average increases, meaning that high-demand goods have been raised much more; the DTC said the increases were concentrated in better-clarity goods (which are in demand in Asia).

Currently, there is a surge of demand for large, high-quality diamonds, of which the DTC still controls the lion's share. The DTC sold an estimated 42% of the nearly $12 billion worth of rough produced last year. By volume, however, the DTC share has fallen below 30% according to some estimates. Such a large discrepancy between value and volume means its production is skewed well toward the larger, better-quality goods.

At the recent GIA GemFest held during BaselWorld, luxury market experts noted that demand for high-quality diamonds continues to grow among the world's wealthy and in emerging consumer markets such as India and China, while supplies remain static. Nevertheless, there is evidence that much of the demand for large diamonds is coming from dealers. With only two exceptions, dealers were the buyers who paid $150,000 to $175,000 per carat for large D-flawless diamonds at Christie's and Sotheby's recent New York auctions. Because prices have increased so sharply in the past year, some diamond people believe that dealers are stockpiling such goods in anticipation of further price increases. Should the market reverse, however, this would create additional problems for an industry already saddled with high debts and declining cash flow.

AUCTIONS: Christie's Geneva will feature a 13.39-ct. Fancy Intense blue VS₁ cushion cut diamond at its May 14 evening sale, making it one of the largest blue diamonds to go on the auction block in recent years.

The stone carries a pre-sale estimate of $6 million to $8 million, but Christie's is hoping the hammer price approaches the $1.3 million per carat that Sotheby's Hong Kong achieved last year when it auctioned a 6.04-ct. Fancy Vivid blue diamond.

The catalog noted that the diamond is "likely to set a world record and take its place among other world class famous blue diamonds."

The sale will also feature a 2.46-ct. triangular-cut Fancy Vivid blue diamond (estimate of $960,000 to $1.2 million) and a 21.4-ct. Fancy Vivid yellow heart-shaped diamond with the estimate on request (this usually means too few similar items have been sold recently to gauge an accurate market price).

Also up for sale will be a brooch featuring a 378.22-ct. emerald center stone, and a 40.43-ct. yellow diamond, estimated to bring $1.8 million to $2.5 million.

Otherwise, the sale shied away from the large colorless diamonds that were the mainstay of New York sales in favor of classically designed estate pieces from name jewelry houses such as Cartier and Van Cleef & Arpels.

MACRO: Two leading consumer confidence surveys show that the public mood on the economy is the gloomiest in years.

The Conference Board Consumer Confidence Index, which had declined sharply in March, fell even further in April. The Index now stands at 62.3, down from 65.9 last month.

Consumers' assessment of current conditions also continued to weaken in April. Those claiming business conditions are "bad" increased to 26.7% from 25.5%, while those claiming business conditions are "good" remained virtually unchanged at 15.3% versus 15.6% last month.

Lynn Franco, director of The Conference Board Consumer Research Center, noted that the slowing economy and rising prices are taking their toll on consumers. "The percentage of respondents intending to take a vacation over the next six months has fallen to a 30-year low, another sign of consumers turning more cost conscious," she said. "Looking ahead, consumers' outlook for the economy, the job market and their income prospects remains quite pessimistic and little changed from last month."

The latest Reuters/University of Michigan Consumer Sentiment Index took the worst dive in 26 years for the same reasons, while several surveys of home prices charted declines of 12% to 15% during the past year.

Russell Shor
Senior Industry Analyst

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Figure 1. This 10.75-ct. ruby from Winza has no fissures and shows no indications of heating. Courtesy of Gemburi Co. Photo by H. A. Hänni, © SSEF.

Figure 2. Bent needles such as these appear to be characteristic of rubies from Winza. Photomicrograph by H. A. Hänni, © SSEF; magnified 30×.

From Gems & Gemology: New Rubies from Central Tanzania

Dr. Henry A. Hänni, director of the SSEF Swiss Gemmological Institute, submitted the following report to Gems & Gemology's Gem News International section:

The SSEF Swiss Gemmological Institute received a number of attractive rubies with uncommon features at April's BaselWorld jewelry fair in Switzerland. The stones, which were submitted by different dealers, all had a rather saturated red hue, and their internal features indicated they were clearly unheated. The largest weighed 10.75 carats (figure 1). Qualitative chemical analysis of all the samples with energy-dispersive X-ray fluorescence spectroscopy established that Cr and Fe were the main trace elements, while Ga was low and Ti and V were below detection limits. The client was sure of the stone's Tanzanian origin and expected to see that country identified on the test report. Because SSEF had not seen faceted rubies with such characteristics before, it was not possible to specify the origin at that time.

We recalled, however, a small parcel of rough corundum from a new deposit in Tanzania that was supplied in January 2008 by Werner Spaltenstein, a buyer in East Africa. These samples were represented to him as coming from the village of Winza, which is located near Mpwapwa, about 85 kilometers east-southeast of Dodoma. A comparison of this material with the cut stones examined during the Basel fair showed a similar chemical composition, and some of the inclusions were identical. They included bent fibers that were actually hollow channels filled with a polycrystalline substance (probably secondary minerals; figure 2), and partially healed fissures consisting of idiomorphic cavities with a polycrystalline filling of white and black grains. Therefore, we concluded that the rubies seen at the fair were indeed from Winza.

The faceted gems we have seen thus far from this new deposit suggest there is considerable potential for high-quality rubies from Winza that in some cases do not need enhancement. But as with all deposits, a considerable amount of lower-quality material is probably present - in this case, as fractured stones with blue color zones. Such corundum will likely be subject to flux-assisted heat treatment to remove the blue spots and "heal" the fractures.

For more on 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.

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Susan Johnson, director of Education Administration, has been elected as a school commissioner for ACCSCT. GIA file photo.

Susan Johnson Elected as ACCSCT School Commissioner

Susan Johnson, GIA's director of Education Administration, has been elected to a full term as a school commissioner for the Accrediting Commission of Career Schools and Colleges of Technology (ACCSCT). Johnson will serve as one of 13 ACCSCT commissioners through June 30, 2012.

Johnson was elected to fill a one-year partial term last year and was the first GIA staff member to serve on the ACCSCT's governing board. Her role will include reviewing applications from prospective and member schools and ongoing strategic planning for the ACCSCT. She will also chair the distance education committee and serve on the degree program review board.

"We are proud of Susan's re-election to such a reputable organization like ACCSCT, which shares our commitment and dedication to achieving the highest standards of education," said Donna Baker, GIA president. "We are confident Susan will continue to fulfill her role with merit."

Johnson is a member of GIA's Education leadership team and plays a key role in operating its global educational business, which serves 16,000 students annually. Throughout her tenure, she has served as a faculty member, managed the extension division (now Lab classes), directed alumni development and filled the role of dean of students. In addition, Johnson has been closely involved with GIA's accreditation, compliance and licensure endeavors. She is also a member of the Association for Career and Technical Education and the Women's Jewelry Association.

"On behalf of the ACCSCT board, we are pleased with Susan's re-election," said Dr. Gery Hochanadel, chairman of ACCSCT's Commission. "She brings strong expertise and a high level of integrity to help foster our mission of excellence in education."

Formed in 1967, the ACCSCT is listed by the U.S. Department of Education as a nationally recognized accrediting agency. The organization serves more than 200,000 students across the U.S. and provides accreditation of private, post-secondary, non-degree-granting institutions and degree-granting institutions, including those offering associate, bachelor's and master's degrees that are predominantly for occupational, trade and technical careers.

GIA is one of more than 800 institutions holding ACCSCT accreditation and was recognized by the group as a 2006-2007 School of Distinction.

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Speakers at the Sinkankas symposium included (left to right): Si Frazier, George R. Rossman, Lisbet Thoresen, John Koivula, Roger Merk, Bill Larson, Dr. William Simmons, William Hanneman and Robert Weldon. Photo by Brendan Laurs.

These garnets from East Africa -- rhodolite, left, and malaia -- are coveted for their strong natural colors. Gems courtesy of JOEB Enterprises, Solana Beach, California. Photo by Robert Weldon.

Sinkankas Symposium Explores the World
of Garnets

The San Diego Mineral and Gem Society and GIA hosted the sixth annual John Sinkankas Symposium at the Institute's headquarters in Carlsbad, California, April 19. A record number of gem and mineral enthusiasts joined world-renowned experts to explore and share a program full of garnet science and lore. Garnet specimens, loaned by the participants and set up by the GIA Museum staff, were also on display.

Speakers from a variety of backgrounds shared garnet information on a wide range of topics, including:

Roger Merk created the symposium to honor his close friend, legendary mineralogist John Sinkankas, who passed away in 2002. "John transcended the difference between the amateur rock hound, the gemologist and the world-class expert," he said. "The Sinkankas Symposium brings together all these groups, and is a fitting memorial."

Past symposiums have highlighted quartz, tourmaline, beryl, phenomenal gemstones and jade. Spinel will be the featured topic for 2009.

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From GIA Education: Blog Your Way to Better Business

Do you know the difference between a vlog, a flog and a blog? Or how about a moblog? There's a whole new language to learn when we talk about Internet marketing, but for now, know that each of these terms represents a way you can generate more interest in your jewelry business.

Blog -- a chronological publication or online journal of postings to a Web site -- is probably the term you're most familiar with. Millions of them have found a home on the Internet. That number continues to rise at the rate of tens of thousands per day as the public's desire for real content that isn't media-controlled grows. Readers are pulled in by the uncensored, consumer-generated dialogue.

That's where you come in. Anyone can create and maintain a blog. You simply need to figure out your niche and focus on a particular topic or message. Blogs have proven to be very effective at engaging your targeted audience, giving your business free exposure and serving as a means for like-minded individuals to share the same passions and goals.

Blogs also offer several internet marketing opportunities, including paid advertising on other blog sites (buzz marketing), sponsorship opportunities (viral marketing) and linking strategies (affiliate marketing). The key is to find where your targeted shoppers and customers are already blogging and post relevant comments that will encourage them to visit your site.

Having links from other blogs will help your Web site improve its organic search engine optimization (when the true content of your site is used to select it as a hit, rather than the meta tags attached to it). Your link popularity score will increase due to the link relevancy score. Relevancy is very significant and represents what is of interest and importance to your blog's readership.

Blogs are still viewed as being in an upstart phase, but there are already offshoots, including moblogs, vlogs and flogs. Moblogs (mobile blogs) are postings to a blog in real time from a PDA (personal digital assistant), camera or other handheld device. Vlogs (video blogs) enable bloggers to post video content online. And flogs (fake blogs) are deceptive postings made by alias bloggers who want to promote a product or service without divulging the company they are trying to promote.

Any of these new marketing methods can be used to enhance or complement traditional marketing strategies or media methods, which have been rendered less-effective by advancing technology. It's up to you to decide on the one that best fits your company's goals and needs.

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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. Enroll today - space is limited.

GIA Lab classes offered through June 2008 are:

So what are you waiting for? It's time to put a spring in your career. Apply online, e-mail GIA Education or call (800) 421-7250, ext. 4001, for more information. Outside the U.S., call
(760) 603-4001.

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