Diamond bodies clarify labeling of synthetic gems

Three major international trade organizations in the diamond and jewelry industry reached an agreement to abide by the new International Diamond Council (IDC) rules, particularly regarding terminology of synthetic diamonds, at the thirty-third World Diamond Congress in Shanghai.

The three organizations were the International Confederation of Jewelry, Silverware, Diamonds and Stones (CIBJO), the World Federation of Diamond Bourses (WFDB), and the International Diamond Manufacturers Association (IDMA).

The revised IDC rules included terminology that broadens the range of descriptors that can be used for gem-quality diamonds that have been created in laboratory or factory, and to date have been referred to as synthetic.

According to the new IDC rules, gem quality diamonds created in a laboratory or factory can be described as: synthetic; laboratory-grown; laboratory-created; or man-made; and the descriptor must always be followed by the word diamond or diamonds.

It was agreed that under no circumstances could the term ‘cultured' be used to describe gem-quality synthetic diamonds. At present, the International Confederation of Jewelry, Silverware, Diamonds and Stones' (CIBJO's) Diamond Blue Book only allows the descriptor ‘synthetic' to describe gem-quality synthetic diamonds.

"Concerning diamond nomenclature, we have been aiming to get IDC in line with the CIBJO for many years. This important achievement bodes well for the development of the future of international diamond grading standard and nomenclature," said IDC Chairman Stephane Fischler, who lauded the statement from the organizations as a milestone event.

Since their publication, the IDC stated that these rules have been the essential reference point for clear diamond terminology aimed at benefiting consumer confidence in diamonds.

RBCCM forecasts positive Diamond fundamentals despite credit crunch

LONDON, RBC Capital Markets, the corporate and investment banking arm of Royal Bank of Canada (RY on TSX and NYSE), has published a research report that concludes that despite the worsening global economic climate, the fundamentals for diamonds remain positive.

Des Kilalea, Analyst, Global Mining Research at RBC Capital Markets commented:

"While the world economy lumbers through one of its worst periods in modern history, with central banks reducing interest rates to stave off recession, diamond prices remain surprisingly firm.

"While the possibility of recession in the US might put the upward move under threat, the long-term prognosis is good, with supply of rough gems likely to fall short of forecast demand pushing prices well above inflation rates.

"The major beneficiaries will be producers of better quality and large gems. Here prices are likely to rise at well above inflation rates simply because the stones are in very short supply.

"Investors are placing a premium on current producers over explorers. The result is that companies looking to fund exploration campaigns will find fund-raising difficult and expensive in the short term until risk aversion among investors dies down. This is likely to encourage increasing consolidation in the junior diamond sector.

"The area offering the greatest potential to capture additional margins is in better quality rough diamonds of the type produced by some junior miners listed in London and Canada. But Government intervention, be it in the form of higher taxes and royalties, increased ownership, or pressure to beneficiate in the host country, is increasing. All listed companies will have to adapt to this."

These and other topics will be discussed at RBC Capital Markets' second annual Diamond Conference "A Jewel of an Opportunity" on Thursday 15 May 2008 at HM Tower of London.

The conference brings together the senior management of the world's leading diamond corporations, from exploration to mining to polishing and retailing. Speakers include: De Beers, Rio Tinto, Harry Winstons Diamond Corporation and Apollo Diamond (producer of synthetic diamonds).

The conference contents will be available via audio-only webcast from Friday 16 May via RBC Capital Markets' website at http://www.rbccm.com/