India-Australia Comprehensive Economic Cooperation Agreement (CECA)

Indian Gems & Jewellery Gets Preferential Access To Australia with India-Australia CECA

After successfully negotiating a Comprehensive Economic Partnership Agreement (CEPA) with the UAE, the Indian Govt. has secured preferential access for Indian gems & jewellery products in Australia through the recently executed India-Australia Comprehensive Economic Cooperation Agreement (CECA).

Currently India-Australia has a significant bilateral trade of USD 950 million for gem and jewellery commodities. Key commodities that are exported to Australia are gold jewellery plain and studded and polished diamonds. The main commodities imported from Australia are precious metals i.e. gold and silver bars.

COLIN SHAH, CHAIRMAN, GJEPC, REPORTS

“The historic India-Australia trade agreement is expected to unlock millions of dollars of additional trade due to the preferential access accorded towards India’s gem and jewellery exports to the island nation”.

While India-UAE CEPA will build inroads for plain gold jewellery to the Middle East, and CECA with Australia would provide preferential advantage for the studded jewellery sector. Australia is one of our large suppliers of gold and silver bullion, and until recently, it was also a key supplier of diamonds”.

We expect Australia to benefit from access to areas where India is a world leader, such as diamonds. By providing preferential access for Indian gems and jewellery exports, the deal also makes it cheaper for Australian retailers to procure world-class jewellery crafted with finesse from Indian manufacturers”.

We expect the Agreement to boost bilateral gem and jewellery trade from USD 950 million at present to USD 1.5 billion.”

GEM AND JEWELLERY EXPORT PROMOTION COUNCIL (GJEPC)

The Gem & Jewellery Export Promotion Council (GJEPC), set up by the Ministry of Commerce, Government of India (GoI) in 1966, is one of several Export Promotion Councils (EPCs) launched by the Indian Government, to boost the country’s export thrust, when India’s post-Independence economy began making forays in the international markets.

Since 1998, the GJEPC has been granted autonomous status. The GJEPC is the apex body of the gems & jewellery industry and today represents 7500 exporters in the sector.  With headquarters in Mumbai, GJEPC has Regional Offices in New Delhi, Kolkata, Chennai, Surat and Jaipur, all of which are major centres for the industry.

It thus has a wide reach and is able to have a closer interaction with members to serve them in a direct and more meaningful manner. Over the past decades, GJEPC has emerged as one of the most active EPCs, and has continuously strived to both expand its reach and depth in its promotional activities as well as widen and increase services to its members.

KGK Group chairman celebrated

Lifetime Achievement Award at Jewellery World Awards

The Jewellery World Awards (JWA) awarded KGK Group chair Navrattan Kothari with the Jewellery World Awards’ highest honour, the Lifetime Achievement Award, for the year 2021 on 21 February in Dubai in the presence of industry stalwarts. Mr. Kothari has been working persistently in the industry since the 1960s, not only to raise the KGK Group but also to inspire excellence in the jewellery and gemstone sector. He is a pioneer in the sector, and his experience and knowledge have made a significant contribution. 

The KGK Group was founded in Jaipur, India, in 1905, with the aim of trading gemstones between India and Burma. With a global presence across 17 countries today, the group has evolved into one of the most preferred brands in the gems and jewellery realm. KGK has emerged as one of the few conglomerates covering the entire spectrum of mining, sourcing, manufacturing, and distributing coloured stones, diamonds, and jewellery for over a century. Mr. Kothari has been the driving force behind the expansion of his family’s gemstone trading company into a worldwide conglomerate. 

KGK Group is also actively engaged in numerous philanthropic endeavours, assisting those in need in the community and helping uplift society. He is a firm believer in the power of morals and always stands by the same. For him, giving back to society is dharma.

He adapted the same as his way of life. Mr. Kothari donates and contributes to social causes as he believes that “It’s difficult to be born as a human being. If you are not able to help others, it’s a sheer wastage of life.” He also started Bhagwan Mahaveer Cancer Hospital and Research Centre in Jaipur in 1996 as it was his lifelong mission to help as many people as possible.



From left – Mr. David Bondi, senior vice president, Informa Markets; Mr. Navrattan Kothari, KGK Group; Mr. Ahmed Sultan Bin Sulayem, executive chairman, DMCC

The excitement doubled when, at the same ceremony, KGK Group also received Manufacturer of the Year Award for its diamond operations. KGK’s growth strategies in the diamond sector have always emphasised inclusive growth, paving a success path for many. “We constantly evolved ourselves and our business to transform the system in which business itself is conducted,” said Mr Kothari.

“Receiving recognition from JWA will surely be an actuator to move forward with greater determination and momentum, keeping the identified philosophy and goals in view. It further encourages us to remain conveners for progressive discussion and collaborators for winning partnerships, resulting in positive business as well as social and environmental impact at scale.”

The award ceremony held at JGT Dubai (Jewellery Gem Technology Dubai) was followed by a gala dinner which was attended by the leaders of the industry.

The KGK Group has operations and offices active in Asia, Australia, North and South America, Europe, and Africa. With years of hard work and fore vision, it has achieved the vertically integrated standing of mines-to-brands in the gems and jewellery industry.

Russian Diamonds

Is the jewellery industry doing enough? As Russia’s devastating war on Ukraine drags on, the question of Russian diamonds becomes a legal and moral quandary…

Is the jewellery industry doing enough?

As Russia’s devastating war on Ukraine drags on, the question of Russian diamonds becomes a legal and moral quandary for everyone in the supply chain.

Almost all Russian diamonds come from Alrosa. The company produces the majority of the world’s rough diamond and 90 percent of Russia’s rough. It is responsible for 28 percent of global supply. The miner is one-third owned by the Russian Federation. Another third is controlled by regional governments such as the Russian republic of Yakutia where many of its mines are located.

Alrosa CEO Sergei Ivanov

Alrosa’s corporate leadership has close ties to the Kremlin. The company and its chief executive, Sergei Ivanov, were personally targeted by US sanctions. Ivanov’s father, Sergei Borisovich Ivanov, is one of Russian president Vladimir Putin’s closest allies and was formerly a KGB colonel general, a Russian minister of defence and a Putin chief of staff. Alrosa is a major source of income for its state-owned shareholder. The company reported sales of $4.16 billion in 2021 with a net profit of 91 billion rubles (AUD $1.2 billion).

Blood Diamonds and Global conflicts

And literally overnight, the Russian gems have become conflict diamonds.

Christine Villegas, director of the Mines to Markets program at Pact, a development NGO, says that Russian diamonds do not fit the narrowest industry definition of ‘conflict diamond’ and worries that some players in governments and the industry will continue to trade based on this ‘loophole’.

Alrosa

The Kimberley Process (KP) says the phrase refers to diamonds which are used to fund rebel groups — not, specifically, nations that invade other sovereign nations — but they clearly fit the spirit of the term, says Villegas.

“They’re funding an armed conflict against a peaceful neighbour, by a state actor,” she said. “These things take time to settle on new definitions. But the silence is striking – and it’s hard not to presume it’s because much of the industry is hoping that this goes away or it’s forgotten.”

Many major industry groups have not yet issued statements on whether responsible buyers should continue buying Russian diamonds.

Sanctions

On 11 March, US president Joe Biden issued an executive order restricting the import of Russian diamonds into the US. A day later, a clarification was issued. The ban was limited to the US importation of Russian rough diamonds and diamonds polished in Russia. The order placed no restrictions on the US importation of polished diamonds sourced from Russian rough but polished outside Russia. 

Key industry figures, such as Martin Rapaport, founder of RapNet, believe this will do nothing to halt the flow of Russian gems. 

“The sanctions – unless they deepen – are not going to affect the normal business,” he said, in a presentation to the industry. This is because the vast majority of Russian stones are exported rough. Most will then progress through the system to India, which cuts and polishes 90 percent of the world’s diamonds, meaning polished diamonds can be imported to the US as an Indian product, not a Russian one. 

Government officials in India have received promises from Russia that the sanctions will not affect the flow of rough. Colin Shah, chairman of the Indian government’s Gem and Jewellery Export Promotion Council, told the India’s Economic Times that “Alrosa has assured us that they are running their business as usual … They will be fulfilling all their obligations to their clients in any part of the world,” he said. 

As for other governments around the world, the EU and the G7 (US, UK, France, Canada, Italy, Japan and Germany) have all indicated that tougher sanctions would be imposed on Russia, including the prohibition of jewellery and diamonds. 

Australia has also announced sanctions which will affect Russian mining companies and the dealings of 33 Russian oligarchs and prominent businesses. The Australian ban focuses mainly on fuel and energy products and makes no mention of diamonds.

But will they be enough?

The various sanctions do not prevent Russia from selling its diamonds. In fact, a report on the Rapaport website confirmed that an Alrosa auction took place in mid-March and, despite the Russian banking system being excluded from the international money transfer system Swift, the diamonds were paid for via banks in the United Arab Emirates and Italy.

The Russian state, independently of the company Alrosa, has an enormous stockpile of diamonds known as the Gokhran. Historically, Russia has used the Gokhran to regulate the market, buying up excess and selling during shortages.

“They have, since the 1990s, been purchasing diamonds in order to manage the pricing,” says Dr Hans Merket, a conflict diamonds researcher at Belgium institute IPIS.

The Russian government holds periodic diamond auctions from the state stockpile with six such auctions occurring in the first half of 2021. Industry watchers have estimated that revenue from just one of those sales reached $140 million.

“It’s a state secret, how much diamond is in that stock,” Merket says. “If they would start selling those diamonds, that could be an important source of revenue.”

So, even sanctions targeted at Alrosa will do little to regulate the flow of Russian stones.

Letting business and the market decide

With governments declining to draw the legal and moral lines against Russian diamonds, the issue will be left to individual companies, industry bodies to decide. And, perhaps, pressure from the general public. But Alrosa remains a key source of diamonds for many of the world’s largest jewellers.

In the week after Russia’s invasion of Ukraine, Alrosa deleted its list of customers — usually proudly and prominently displayed — from its website. Archived versions of the list show over 50 companies with long-term contracts with Alrosa including US giants Signet Jewellers, Tiffany & Co. as well as Chow Tai Fook, Chow Sang Sang, KGK and many companies from India, Belgium and Israel.

At time of writing, only Signet Jewellers had issued a clear indication on its position on Russian diamonds. In a memo to suppliers the company stated that it had “halted all trade in precious metals and diamonds that originate from such sanctioned Russian sources, and you are therefore requested to stop supplying the same to Signet even though the country(s) in which you operate may not have imposed sanctions on Russian precious metals and diamonds”.

Luxury jeweller Tiffany & Co. faces a moral decision after it recently began disclosing the country of origin for its engagement rings, citing the importance of responsible sourcing. Its manufacturing arm currently buys stones from five countries — Russia, Canada, South Africa, Namibia and Botswana. In other words: Alrosa and De Beers. Tiffany & Co’s parent company, LVMH, has closed its retail operations in Russia.

The brands are caught between a diamond and a hard place. Russian gems are an integral part of their supply. They’ve all invested heavily in customer ideals of environmental and social responsibility. As the war continues, they will inevitably face backlash if they make any attempt to white-wash Russian diamonds. If they stay silent, the modern savvy consumer will see through that too.

Just as consumers are beginning to see the Russian influence on energy prices and fuel tariffs as good reasons to invest more heavily in renewables and electric vehicles, there’s a strong chance the Russian conflict diamond issue will drive consumers more strongly toward lab grown diamonds.

Villegas say the big industry players’ silence on the matter of Russian diamonds could affect the industry in significant ways for years to come. 

“All the work that has been done over the years to try to turn the industry reputation around, and show meaningful progress towards diamonds that do good [could] be undermined,” she told The Guardian. “There’s been a deafening silence.”

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UK jewellers extend and demonstrate support for Ukraine

A UK jewellery designer has lashed out at media suggestions that the jewellery industry is “profiteering” from the Ukraine crisis. An article in the subscriber-only…

A UK jewellery designer has lashed out at media suggestions that the jewellery industry is “profiteering” from the Ukraine crisis. An article in the subscriber-only platform the Telegraph was headlined “Jewellers accused of profiteering from Ukraine war” while the article claims that jewellers have taken advantage of rising gold prices to pressure young couples into paying higher prices for rings. 

Founder and designer of jewellery brand Kimjoux, Trang Do, responded to the article by saying “This is utterly unfair!” and demanded that the Telegraph balance the story by reporting on how many members of the jewellery industry are raising millions in donations in support of Ukraine. 

“Some people read this type of attention-grabbing headline and assume all jewellers are like this,” Tran Do said. “at least have the decency to say ‘some jewellers’, please!”

Members of the British jewellery trade organisation, Company of Master Jewellers (CMJ) have raised £41,500 towards their goal of £50,000 for Ukraine, through their Red Cross fundraiser via JustGiving.

At the CMJ’s ruby-themed dinner and ball in March, attendees stood to give a standing ovation to the people of Ukraine.

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Alrosa closes US office

Russian diamond producer Alrosa has closed its USA office after the resignation of Rebecca Foerster.

President’s Resignation

Rebecca Foerster, the Alrosa USA president until April this year, resigned her position citing the geopolitical situation. Only a day after her resignation, US President Joe Biden banned Russia from importing rough or polished diamonds into the United States in response to Russia’s invasion of Ukraine.

Alrosa, the world’s leading diamond producer by volume, is one-third owned by the Russian Federation.

Rapaport’s ‘The Diamond Origin Dilemma by Avi Krawitz

Rapaport’s Article on ‘The Diamond Origin Dilemma by Avi Krawitz, Explains further how Russia’s invasion of Ukraine is another defining moment for the diamond industry.

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Ellendale to be mining in 2022

Burgundy Diamonds Mines is one step closer to re-opening the Ellendale diamond mines in Western Australia’s Kimberley region.

Burgundy Diamonds Mines is one step closer to re-opening the Ellendale diamond mines in Western Australia’s Kimberley region.

Burgundy Diamond Mines has made its second payment as part of an option agreement it had signed to secure full ownership of the mine from Gibb River Diamonds in WA. A final payment is due in 2023. Burgundy bought the mine in March 2021 from Gibb River Diamonds for $6.7 million in cash, 16 million Burgundy shares and 1.5 per cent revenue royalty.

The company is readying the mine to resume operations after it had been moth-balled by its previous owners. Burgundy will be exploring the alluvial deposits at the Blina and Ellendale locations and developing the stockpiles and coarse rejects and remnant pit material with plans to be fully operational by the end of this year.

Past production at the Ellendale mine produced 50 percent of the world’s fancy yellow diamonds. Burgundy believes there is significant potential for the new Ellendale leases to deliver a profitable diamond mining operation, with the intention of becoming Australia’s next diamond producer within the next 24 months. The project ticks many strategic boxes for Burgundy in terms of location, high-end product and cash-flow timeline.

With the Blina Alluvials fully permitted for mining, this will be a priority target for Burgundy, with plans for additional geological assessment followed by targeted bulk sampling and trial mining.

Resource assessment of the other Ellendale prospects and former mining operations is already underway, in addition to the fabrication of a state-of-the-art processing plant expected to be up and running by the year end.

Burgundy is currently operating its Perth facilities at high capacity, cutting and polishing third-party rough diamonds bought in 2021 and is pursuing options to make further purchases over the remainder of 2022. Burgundy Managing Director Peter Ravenscroft is excited by the retail aspect of the company’s operations.

“We are thrilled to be preparing the launch of our ultra-luxury diamond brand in Paris in July,” he said, “and will soon be announcing the engagement of a great creative agency to manage this process.” French jeweller Bäumer Vendôme will be collaborating with Burgundy on a branded collection using coloured diamonds from Ellendale, along with other gems from third-party retailers.

“Building a new luxury brand and partnering with select jewellery retailers offers a unique concept to the market [which] customers will enjoy a true end-to-end experience while we can deliver the best returns for our partners, shareholders and the communities in which we operate,” added Ravenscroft.

Argyle closure and Russian aggression leaves a gap

The race to kickstart the Kimberley’s diamond industry heated up last year following the closure of Australia’s only operational diamond mine at Argyle. Now, the ongoing invasion of Ukraine by Russia presents another opportunity for Australian diamond miners as Russian gems leave an irresponsible flavour in the mouths of ethically minded consumers.

Another miner in the Kimberley region, Lucapa Diamond Company, recently identified three new prospective targets only 50 kilometres from Ellendale. The exploratory team recovered more than a thousand diamonds from a single drill hole on the site.

Coloured mined diamonds remain in high demand with the prices of high-quality yellow stones increasing as much as 30 percent in recent years.

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