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Synthetic diamonds not so attractive

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Synthetic diamonds not so attractive

Market remains lukewarm towards Lab-Grown Diamonds

Demand for De Beers’ Lab-Grown Diamonds (LGD) is still relatively low, almost two years after they were introduced into the market.

The Group’s Chief Financial Officer – Midstream, Susanne Swaniker-Tettey told the media recently that the demand for synthetics remains low compared to the demand for natural diamonds.

In 2018, the diamond group launched Lightbox which offered a new range of fashion jewellery products containing LDGs at accessible prices.

The objective of the introduction of man-made diamonds, according to De Beers, was to clarify consumer confusion around LDGs, providing clear and transparent information and a differentiated offering from natural diamond jewellery at a different price.

Although response by the public to the Lightbox is described as positive, overall demand is reported to be very low compared to natural ones.

By venturing into the synthetics sector, Tettey said they have seen prices of LDGs going down with the development of the sector which has led to production costs decrease and improvement in consumer education.

De Beers has invested about $100 million on building a new facility in the United States of America (USA), but Tettey says the group will be spending 100 times more than that over the next 5 -7 years in the natural diamond business.

Last year, De Beers which runs a 50/50 joint venture – Debswana Diamond Company, with Botswana government spent $178 million in marketing.

The amount was the group’s highest expenditure in more than a decade which was meant to further drive consumer demand for diamond jewellery.

Tettey says they will again this year spend the same amount on marketing.

The year 2019 was the most challenging one for the diamond sector leading to a revenue decline of 24 percent to $4.6 billion for De Beers while rough diamond sales by 26 percent to P4.0 billion.

Presenting De Beers’ 2019 preliminary financial results, Tettey explained average realised rough diamond price reduced by 20 percent to $137 per carat, reflecting a 6 percent decline in the average rough price index due to lower value mix of diamonds sold in response to weaker demand for higher-value diamonds.

One of the challenges that the diamond industry faced was the trade tensions between China and the US, which led to fewer consumer sales in the US in late 2018.

This led to retailers having less appetite to restock last year which led to the mid-stream being oversupplied with inventory and rough diamond demand falling significantly.

The challenges are said to have been exacerbated by limited bank financing in the diamond midstream, as well as a number of US retail challenges that also put pressure on the polished diamond prices.

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1 Comment

1 Comment

  1. Mark Snyder

    March 1, 2020 at 1:48 am

    Lab-grown diamonds had a positive year in 2019 with estimated growth of 7%. The only reason is wasn’t more is due only to production growth catching up to demand. Remember, lab diamonds retail for 1/2 the price of natural diamonds and retailers report substantially more profit with lab diamonds. Mined diamonds had one of the worst years on record in 2019. There will always be room for both to co-exist only now there is real competition for mined diamond. The mined diamond industry according to its own experts has to learn how to compete. As well restructuring of the mined diamond pipeline is in order where fewer hands touch the diamonds on their way to consumers; ie, lower costs.

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Business

Letlole La Rona suspends CEO

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Letlole La Rona (LLR), a property company listed on the Botswana Stock Limited (BSEL), on Tuesday moved to suspend its Chief Executive Officer, Chikuni Shenjere-Mutiswa.

His suspension, according to a notice to shareholders, follows preliminary findings arising from an investigation into issues relating to the company’s Long-term Incentive Plan.

Mutiswa who was appointed LLR CEO in June 2018, is said to have been suspended with full benefits pending the outcome of the full investigations.

Commenting on the latest developments, LLR Board Chairperson, Boitumelo Mogopa noted good governance remains sacrosanct to the board and all staff of the company.

“The preliminary findings of the possible misconduct arising from the investigations relate to the circumstances around the company’s Long-term Incentive Plan during or around March this year and possible acts or omissions by an individual in a unique position of power,” said Mogopa.

Mogopa said this by no means reflects the integrity of the board, financial performance and company portfolio.

“For us, it remains business as usual as the due process takes its course,” said Mogopa.

Meanwhile, the board has in the interim appointed Botshelo Mokotedi to hold the fort on an acting basis while investigations continue.

Mokotedi is seconded from Botswana Development Corporation (BDC) – a major shareholder in LLR – where he is the Head of Risk.

He is described as a forward-thinking, highly motivated and results-oriented individual with more than a decade experience in the financial services sector across a variety of senior roles, including Business Development, Credit Analysis as well as Portfolio and Risk Management.

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COVID-19 relief fund gets a boost

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COVID-19 relief fund gets a boost

Limkokwing University, Caltex donate over P1. 2 million

Various companies and organizations on Wednesday donated over P1.2 million to the Covid-19 Relief Fund.

Among those who contributed to the fund was Astron Energy Botswana, a leading supplier of petroleum products that operates Caltex filling stations.

COVID-19 relief fund gets a boost
RECEIVING DONATIONS: Vice President Tsogwane accepts a donation from Caltex (Astron Energy)

Presenting a P100 000 cheque donation to the Vice President Slumber Tsogwane, Astron Energy Chief Executive Officer, Bruce Buno noted that given the spirit of unity displayed by Batswana during this difficult time, the country will prevail against the challenges brought by the Covid-19 pandemic.

“We continue to recognise the priceless need to comply with all regulations to ensure that we do our part through our storage depot operations and our network of Caltex branded filling stations,” said Buno.

The biggest contributor of the day, however, was, Limkokwing University of Creative Technology (LUCT), who handed over a P1.2 million dummy cheque towards the relief Fund.

COVID-19 relief fund gets a boost
BIG CONTRIBUTION: Limkokwing University of Creative Technology donates big to the COVID-19 Relief Fund

The institution’s Head of Public Relations, Mercy Thebe highlighted that the donation was a personal contribution from the University founder and President, Tan Sri Dato’ Sri Paduka Limkokwing.

Thebe also noted that the P1.2 million consisted of P500, 000 cash, P300, 000 worth of creative content, P200, 000 worth of face masks and a scholarship to the underprivileged for the 2020 Academic Year.

Other organizations that contributed to the fund included the Apostolic Faith Mission (AFM), which gave P105, 000, the Muslim Association of Botswana Molepolole branch with P56, 550, Southern District Beef Producers Association which donated P50, 000 and Taurus Batteries who put P150, 000 in the kitty.

Receiving the donations, Vice President, Slumber Tsogwane thanked all the organizations for bolstering government relief efforts to fight the Covid-19 by donating generously to the fund.

“It is symbolic in the sense that it reminds us that the war is still on,” said the VP, adding that by making these generous donations, both individuals and organizations are contributing towards winning the fight against the pandemic.

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