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SDLRC Blog: John Kaiser highlights media articles for April 2018

Sheahan Diamond Literature Reference Compilation
The Sheahan Diamond Literature Reference Compilation is compiled by Patricia Sheahan who publishes on a monthly basis a list of new scientific articles related to diamonds as well as media coverage and corporate announcements called the Sheahan Diamond Literature Service that is distributed as a free pdf to a list of followers. Pat has kindly agreed to allow her work to be made available as an online digital resource at Kaiser Research Online so that a broader community interested in diamonds and related geology can benefit. The SDLRC Blog is a guest commentary by an industry expert about articles, themes and trends in recent issues of the SDLRC.

April 2018

Comments by John Kaiser

Media and Corporate Releases
Every month when Pat Sheahan publishes her monthly Diamond Literature Service she sends me a copy of her spreadsheets containing the technical and media-corporate references. I load them into the database we created in late 2015, track down any URLs and abstracts that I can, and port them to the Diamond Resource Center which is the gateway to Pat's reference library as well as Canadian and Australian listed companies featured at KRO which I have flagged as having a serious diamond focus. The technical references end up in their own yearly report and the media and corporate references in a separate report. This commentary is an attempt to flag those media articles I found particularly interesting. Any opinions expressed are solely those of John Kaiser. It is also an effort to introduce audiences to the online diamond reference library and its many features.
Discovering the price of Namibia's rough diamonds on the international market, New Era This is a teaser article for those who are curious about the quality and size distribution of the diamonds recovered offshore Namibia by De Beers through its partnership with the government. While each kimberlite pipe will have a distinctive size-grade-frequency "signature" which follows some sort of logarithmic function, the stones that ended up in the Atlantic offshore Namibia and South Africa are the survivors of a 300 km plus river journey after being eroded from a multitude of kimberlites with varying grades and diamond populations. They are universally "gem" quality because poor quality stones, including those riddled with inclusions, get broken down by the long journey and never make it to those offshore deposits. But what is the size distribution of these stones? Do large Type IIa diamonds make it to the coast, or do they get hopelessly trapped upstream? When you remove all the low quality stones from a pipe's run of mine production, how does the quality-size profile compare with that of the offshore deposits? You would think that Namdeb which is entitled to 15% of De Beers' offshore production would see all the recovered stones and understand their value structure. So why is there a need for an entity like Namib Desert Diamonds (Namdia), which was established in 2016 "to discover the price of Namibia's rough diamonds in the international market"? The Namibian government knows the price De Beers gets for its diamonds recovered offshore. The real question might be "how is the value distributed among individual diamonds". This is more of scientific interest than economic unless there is a suspicion that De Beers is not properly pricing higher value stones. This article is interesting not because it informs but because it walks a tightrope of ambiguity.
N.W.T. government co-hosts 'diamond experience' for Belgian king and queen, CBC This is a feel good article about Belgian royalty visiting Ottawa for a "diamond experience" organized by the NWT and the Antwerp World Diamond Centre in which the Belgian king and queen met with indigenous people and get a Tlicho drumming show. For somebody like me who has read King Leopold's Ghost it is all a bit weird even though the present is no longer the past.
A proposal to the President -- A six-point plan, Mining Weekly Any Creamers Mining Weekly article flagged by Pat Sheahan is worth reading but this one is particularly worthwhile because the 6 Point plan is a list of what ails South Africa as far as its mining industry is concerned as well as solutions proposed by the two consultants who formulated the 6 Point Plan.
Alrosa Urges Promotion of Stones' Russian Origin, Diamonds.Net Alrosa, the Russian government controlled diamond giant, is waking up to the threat of synthetic diamonds. It is urging its "Alrosa Alliance" members, namely the parties who buy Russian rough diamonds, to start banging the drum about the "natural, non-conflict" origin of Russian diamonds. Maybe Alrosa should follow Dominion Diamond's example by sponsoring Sarine Diamond Journey. Joking aside, there is a serious effort afoot to document a diamond's origin through a chain of custody that enables a diamond to enter a blockchain ledger as a unique specimen which can become a collectible like an original work of art if its origin from a bedrock source can be documented.
March 2018 Market Report, Ehud Arye Laniado Anything by Ehud Laniado is worth reading, even when it is historical stuff like his portraits about people associated with diamonds such as Maximilian I and Mary of Burgundy. He has a keen grasp of the diamond market and this article about recent market conditions is a good example.
New article series recognizes women in the diamond industry, Jewellery Business This article is a gateway to 7 articles about women involved in various aspects of the diamond sector produced by the Diamond Producers Association. No, Eira Thomas is not one of them.
Secrets to Earth's interior found trapped in diamonds, Globe & Mail This is a science article about one of the diamond sector's rising academic stars, Maya Kopylova, whose work includes figuring out what makes really big, fantastic diamonds tick. In this case it is about the diamonds from the Cullinan Mine in South Africa from where comes the largest diamond in the world. Here the subject is about inclusions, nasty bits of grit that ruin the quality of a diamond. For geoscientists, however, the diamonds are little more than a suitcase that must be unpacked to reveal a treasure not just from deep inside the earth but from very long ago, sometimes billions of years. Diamonds with inclusions are like time capsules. In this case Maya is excited about an inclusion called perovskite which apparently is unstable at the earth's surface but may comprise a large part of the earth's mantle. Anybody who clicked on that perovskite link would have found all the articles Pat Sheahan has tagged as involving the key word "perovskite". Every reference comes with key words Pat Sheahan has assigned. Because there are so many variations of similar key words we have created a set of "major" key words to which we have assigned key words with variant spellings or ones that are sub-sets. The major keywords are listed in the Index of Diamond Reference Major Key Words. I have written the "definitions" should be viewed as a work in progress. Each major key word has its own web page where the references are chronologically organized. The index flags in yellow those key words for which there is a new reference. So if you are somebody who cares passionately about "perovskite" the first thing you would do when getting word that Pat has published her latest issue is to go to the Index and see if there is something new on your favorite topic. Perovskite started showing up in 2012 and from 2016 onwards where I have tracked down the online location of the article referenced and provided the abstract, a quick look reveals a technical horror show of which Roger Mitchell is the lead (make sure you watch the 4 minute PDAC video about Pat Sheahan to spot Roger spilling the beans about Pat's two major vices). To its credit the Globe & Mail makes perovskite actually sound cool. But the interesting tidbit is that the pervoskite grain found in the diamond from the Cullinan is from a depth of 700 km. That is way deeper than most diamonds are believed to have formed at and may be a clue about the origin of those really big diamonds that make headlines. If you are curious about Maya Kopylova's technical work, check out our K Authors page and scroll down to all the variations of Maya's name. (Most technical articles have multiple authors; we have extracted each author's name and made it possible to find every article in which that author is a participant.)
Diamond miners linked to Dermot Desmond seek support for merger, Irish Times Ever wonder what the Irish billionaire Dermot Desmond who has kept Mountain Province alive these past decades looks like? This article from the Irish Times mumbling about conflicts of interest and the plan to merge Kennady Diamonds back into Mountain Province has a great photo. The article does not delve into the controversy about the merger, which is that the Faraday-Kelvin diamonds are even lower value than the low value modeled for the Gahcho Kue diamonds which production has demonstrated to have been woefully optimistic. Unless Gahcho Kue starts delivering those high value outlier diamonds we saw show up in bulk sampling that mine will be a bust. By reconsolidating the Kennady North spinout Mountain Province is creating an opportunity for De Beers to absorb the entire district and eliminate the flow of bad news required by Mountain Province's public listing.
Ari Epstein: The diamond trade is stable again, Rough-Polished Clicking on any of the Rapaport Diamonds.Net or Rough-Polished articles usually gives you a short and concise summary of some new development either upstream or downstream in the diamond sector. But sometimes there are in depth articles that delve into big picture stuff. This article from Rough-Polished is an interview with Ari Epstein, head of the Antwerp World Diamond Centre. He believes the diamond sector started to turn the corner in 2016, confirmed stabilization in 2017, and will start to pick up in 2018.
The Price of Lab-created Diamonds Continue to Fall, Paul Zimnisky Paul Zimnisky is a former hedge fund manager who has staked out a place in the diamond sector as an independent analyst who makes his living producing a monthly 15-20 page diamond industry commentary that costs USD $800 per year. In addition to flagging all the current trends and themes he maintains a Rough Diamond Price Index which is a challenge given the multitude of value categories defined by the 4 C's: carat (weight), color (white, which really means no color, is best), clarity (no inclusions) and cut (at the rough level this refers to crystal shape which determines how much weight disappears when the stone is cut and polished). For executives who do not have time to poke through Pat Sheahan's media and corporate references it is more cost-effective to subscribe to Paul's newsletter to insure themselves against appearing ignorant about recent developments. Fortunately Paul also publishes free articles about general trends which get digested by quite a few other media channels. This one is interesting because it describes a price divergence between synthetic and natural diamonds which is music to the natural diamond crowd. The diamond producers have been horrified by the prospect that technology will dramatically reduce the cost of manufacturing diamonds relative to mining them from bedrock or alluvial deposits. On the surface and intrinsically synthetic and natural diamonds of the same 4C category are indistinguishable. So why would a consumer not buy the cheaper version of the real thing? The diamantaires are horrified by the prospect that consumers will start to view diamonds as sparkly bits of crystallized carbon with a purely cosmetic function. But diamonds have always been a mind game and in this regard natural diamonds have a big advantage. Synthetic diamonds do not have the mystique of a natural diamond which can only form deep inside the earth, potentially growing over extraordinary time periods, always vulnerable to large scale changes within the earth's mantle that change the pressure-temperature regime surrounding the immobile diamond, and, even when engulfed by an ascending magma, encountering conditions that transform the octahedral crystal into uninspiring graphite ubiquitous at the earth's surface. A natural diamond that ends up as a cut and polished stone is the survivor of a long and difficult journey incomparable to a synthetic diamond's short hop from factory to store. But will consumers continue to view diamonds as a unique collectible rather than an easily replaceable commodity? The future holds a very finite supply of new natural diamonds, but there is a near infinite supply of new synthetic diamonds. If consumers see natural and synthetic stones as the same thing, a cosmetic bauble, the price of diamonds will collapse to the ever sinking cost of synthetic diamond production. Zimnisky's observation that equivalent quality synthetic diamonds are sinking in price compared to natural diamonds suggests that consumers are seeing a fundamental difference as they do between an original work of art and a perfect copy. Much of the industry's focus in the past has been on screening technology that allows one to tell the difference, but a more important emerging trend is identity tracking technology through systems such as the blockchain ledger and laser-scan fingerprinting. Zimnisky offers the view that synthetic gem diamonds are competing with the natural gem market only as a stepping stone to a much bigger industrial market for diamond materials, perhaps as anticipated by Neal Stephenson in his weird 2000 novel The Diamond Age.


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