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Weekly Market Report

DIAMOND MARKET OVERVIEW

Polished traders reported healthy trading volumes in the wholesale market over the past week. Manufacturers in India have reportedly ramped up production, amid tightening supplies in the wholesale market in certain categories.  There was positive news for jewellery sales from Hong Kong and mainland China. Luxury goods, especially jewellery and watches, was one of the best performing sectors in 2017 and is expected to further recover in 2018, according to a report published by PwC. “All time high stock and real estate markets, both local and global, have created a significant wealth effect, and much improved sentiment in consumption,” said the PwC report. Further, LVMH the world’s largest luxury goods group, said a revival in Chinese demand boosted sales last year. In the broader market, the main polishedprices index ended the week on a higher note, opening at 117.11 on Friday, from Monday’s opening at 116.84.

ROUGH MARKET

Traders reported a rebound in trading volumes, following the De Beers January sight this past week. Sightholders reported strong demand across the board. The Sight was estimated to be in the region of $700 million.  Overall premiums cited in the secondary market on De Beers’ rough boxes were around 5 – 7%.  “Premiums were much higher than Alrosa due to the fact that De Beers didn’t increase prices,” one sightholder said, adding there were strong premiums in 5-10 carats gem quality.

CORPORATE AND EVENTS

LSE-listed Gem Diamonds has recovered an exceptional quality 149 carat, D colour Type IIa diamond, from its Letšeng mine in Lesotho, miningreview.com reported. The 149 carat diamonds, characterised by its excellent shape, is the fourth high quality diamond of over 100 carats recovered to date in 2018 from Letšeng, the highest dollar per carat kimberlite diamond mine in the world, said the miningreview.com report. The latest diamond recovery follows closely upon the recovery of the exceptional 910 carat diamond announced on 15 January 2018, it said.

Zimbabwe, which has the world’s second-biggest platinum reserves, may lift a requirement that companies mining the metal or diamonds must be at least 51 percent owned by black citizens of the country, President Emmerson Mnangagwa said, Bloomberg reported. Mnangagwa, who became president in November after Robert Mugabe resigned under pressure from the military, has announced that the ownership requirement on all other minerals will be abolished. The government needs to assess its platinum and diamond industries more carefully, he said, according to the Bloomberg report. “I only excluded diamonds and platinum for now. We do not have a real or deep-rooted or well-interrogated policy on diamonds or platinum,” the 75-year-old president said in an interview in his office in the capital, Harare, last week. “Down the line when we are satisfied that this can also go into the open basket we will do so,” said the Bloomberg report.  Among individual operations, notable performances came from Kumba, the Grosvenor coal mine in Australia, and Canada’s Gahcho Kué diamond mine, the group says in its production update, Business Day reported.

Global miner Anglo America saw its output climb 5% last year thanks mainly to its diamond and iron ore divisions, though copper production remained flat, mining.com reported. The company said output at its diamond unit, De Beers, climbed 22% compared with the previous year to 33.5 million carats, as its Gahcho Kué mine reached full production. Gahcho Kué, Canada's newest diamond mine and the world’s largest in the last 13 years, is a joint venture between De Beers and Mountain Province Diamonds. It officially opened in September 2016, achieving commercial production last March, the mining.com report said.

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