The head of Berkshire Hathaway Inc.’s Borsheims Fine Jewelry in Omaha is going back to the roots of her business.
We’re not saying that CEO Karen Goracke will dive into the earth with a pick and shovel. Rather, she has joined the board of directors of Mountain Province Diamond Inc.
“I hopefully will get out there next summer and actually see the mine and view the production,” Goracke told us last week.
This is the start of the busy season for Mountain Province’s Gahcho Ku mine. (Gahcho Ku is the traditional Chipewyan name for a nearby lake and translates as “Place of the Big Rabbit.”)
Because there are no roads in that section of Canada’s Northwest Territories, workers wait until everything freezes over to truck in equipment and supplies.
Mountain Province is a 49 percent partner with DeBeers Canada in the mine, touted as the world’s largest and highest-grade new diamond mine.
Although Goracke has never seen diamonds mined, her expertise in selling them is what Mountain Province wants.
Its chairman, Jonathan Comerford, said Goracke will help the mining company “understand the dynamics of the world’s largest diamond retail market in the United States.”
“They were looking for some expertise in diamond jewelry and loose diamonds and really understanding the American market,” Goracke said, such as advice on trends in diamond sales, customer preferences and other retail matters that might help with the mine’s production and pricing decisions.
Goracke, a University of Nebraska at Kearney graduate, said it helps that Borsheims has a wide range of customers, both locally and through catalogs and the Internet.
High-value diamond mining isn’t easy. The Gahcho Ku mine’s potential was discovered in 1993, and Mountain Province has been building its production system for more than a decade. Its share of the first production is scheduled for January in Antwerp, Belgium.
The new mine has a cluster of four diamondiferous kimberlites, a type of rock where diamonds reside.
Three of the kimberlites have 35.4 million tons of ore yielding 1.57 carats of diamonds per ton, or 55.5 million carats. The fourth kimberlite wasn’t described in the announcement of Goracke’s appointment.
If you figure an average retail price of $3,000 per carat, that’s a
Borsheims' new CEO, Karen Goracke poses for a portrait on Thursday, April 10, 2014. Coracke was chosen to be the chief executive officer and president of the jewelry retailer owned by Berkshire Hathaway on Dec. 31.
Warren Buffett after he voted at Lifegate Church on Tuesday.
The head of Berkshire Hathaway Inc.’s Borsheims Fine Jewelry in Omaha is going back to the roots of her business.
We’re not saying that CEO Karen Goracke will dive into the earth with a pick and shovel. Rather, she has joined the board of directors of Mountain Province Diamond Inc.
“I hopefully will get out there next summer and actually see the mine and view the production,” Goracke told us last week.
This is the start of the busy season for Mountain Province’s Gahcho Ku mine. (Gahcho Ku is the traditional Chipewyan name for a nearby lake and translates as “Place of the Big Rabbit.”)
Because there are no roads in that section of Canada’s Northwest Territories, workers wait until everything freezes over to truck in equipment and supplies.
Mountain Province is a 49 percent partner with DeBeers Canada in the mine, touted as the world’s largest and highest-grade new diamond mine.
Although Goracke has never seen diamonds mined, her expertise in selling them is what Mountain Province wants.
Its chairman, Jonathan Comerford, said Goracke will help the mining company “understand the dynamics of the world’s largest diamond retail market in the United States.”
“They were looking for some expertise in diamond jewelry and loose diamonds and really understanding the American market,” Goracke said, such as advice on trends in diamond sales, customer preferences and other retail matters that might help with the mine’s production and pricing decisions.
Goracke, a University of Nebraska at Kearney graduate, said it helps that Borsheims has a wide range of customers, both locally and through catalogs and the Internet.
High-value diamond mining isn’t easy. The Gahcho Ku mine’s potential was discovered in 1993, and Mountain Province has been building its production system for more than a decade. Its share of the first production is scheduled for January in Antwerp, Belgium.
The new mine has a cluster of four diamondiferous kimberlites, a type of rock where diamonds reside.
Three of the kimberlites have 35.4 million tons of ore yielding 1.57 carats of diamonds per ton, or 55.5 million carats. The fourth kimberlite wasn’t described in the announcement of Goracke’s appointment.
If you figure an average retail price of $3,000 per carat, that’s a potential value of $166 billion.
At a sale, rough diamonds are divided into lots, held in boxes.
“Investors have a chance to look at these actual boxes and gauge what they think the cut diamonds will produce,” she said. “It’s a complicated process to look at the rough and realize how to cut it and what you’re going to get out of it.”
Winning bidders cut the diamonds and sell them to retailers like Borsheims as loose diamonds or to jewelry makers.
Goracke, also a director of the Jewelers Vigilance Committee, which oversees the industry, said that arrangement won’t change because of her new directorship.
Taxes and the wealthy: New York prof weighs in
Edward Zelinsky, a law professor at Yeshiva University in New York City, has an idea for increasing taxes on the wealthy, a cause near and dear to Berkshire Chairman and CEO Warren Buffett.
In a blog, Zelinsky reviews the pre-election income tax controversy between Buffett and now-President-elect Donald Trump, in which Buffett pointed out that he doesn’t follow Trump’s example of using past losses to offset his income taxes.
Zelinsky wrote that Buffett plans to donate 99 percent of his wealth, in the form of Berkshire shares, to charities, meaning he wouldn’t pay capital gains taxes on the billions of dollars in value the shares have built up over 50-plus years.
Shielding gains through charitable donations is “perfectly legal,” the professor wrote. “But it deprives the Treasury of any federal income tax payment for the public services that, by Buffett’s own telling, helped create that appreciation.”
To solve the shortcoming, Zelinsky wrote, how about limiting the amount of capital gain that can be excluded from taxes?
Or, he suggested, wealthy people could make voluntary contributions, in lieu of taxes, to the U.S. Treasury to compensate the government for providing the arena in which they created their wealth.
New office in Germany and words of caution
Berkshire’s commercial insurance operation has opened an office in Dsseldorf, Germany, according to Handelsblatt, a business and finance publication.
“When Warren Buffett comes, of course we’ll give him a friendly reception,” said Ulrich Grillo, president of an association of German industries that buy such insurance. “Competition is always good.”
But he had words of caution for newcomers.
“Especially with industrial insurance, business is affected by more than just price. Businesses also value expertise and reliable support,” Grillo said. “These are criteria you can’t buy overnight with money.”
Buffett’s arrival comes at a time of low prices for commercial insurance, making it tough for companies to compete profitably.
Said Christian Hinsch, head of the industrial insurer HDI-Global and an executive board member of the German insurance federation: “There is overcapacity building up as more and more competitors enter the market.”
Berkshire Hathaway Inc. owns the Omaha World-Herald.
At a sale, rough diamonds are divided into lots, held in boxes.
“Investors have a chance to look at these actual boxes and gauge what they think the cut diamonds will produce,” she said. “It’s a complicated process to look at the rough and realize how to cut it and what you’re going to get out of it.”
Winning bidders cut the diamonds and sell them to retailers like Borsheims as loose diamonds or to jewelry makers.
Goracke, also a director of the Jewelers Vigilance Committee, which oversees the industry, said that arrangement won’t change because of her new directorship.
Taxes and the wealthy: New York prof weighs in
Edward Zelinsky, a law professor at Yeshiva University in New York City, has an idea for increasing taxes on the wealthy, a cause near and dear to Berkshire Chairman and CEO Warren Buffett.
In a blog, Zelinsky reviews the pre-election income tax controversy between Buffett and now-President-elect Donald Trump, in which Buffett pointed out that he doesn’t follow Trump’s example of using past losses to offset his income taxes.
Zelinsky wrote that Buffett plans to donate 99 percent of his wealth, in the form of Berkshire shares, to charities, meaning he wouldn’t pay capital gains taxes on the billions of dollars in value the shares have built up over 50-plus years.
Shielding gains through charitable donations is “perfectly legal,” the professor wrote. “But it deprives the Treasury of any federal income tax payment for the public services that, by Buffett’s own telling, helped create that appreciation.”
To solve the shortcoming, Zelinsky wrote, how about limiting the amount of capital gain that can be excluded from taxes?
Or, he suggested, wealthy people could make voluntary contributions, in lieu of taxes, to the U.S. Treasury to compensate the government for providing the arena in which they created their wealth.
New office in Germany and words of caution
Berkshire’s commercial insurance operation has opened an office in Dsseldorf, Germany, according to Handelsblatt, a business and finance publication.
“When Warren Buffett comes, of course we’ll give him a friendly reception,” said Ulrich Grillo, president of an association of German industries that buy such insurance. “Competition is always good.”
But he had words of caution for newcomers.
“Especially with industrial insurance, business is affected by more than just price. Businesses also value expertise and reliable support,” Grillo said. “These are criteria you can’t buy overnight with money.”
Buffett’s arrival comes at a time of low prices for commercial insurance, making it tough for companies to compete profitably.
Said Christian Hinsch, head of the industrial insurer HDI-Global and an executive board member of the German insurance federation: “There is overcapacity building up as more and more competitors enter the market.”
Berkshire Hathaway Inc. owns the Omaha World-Herald.
"Know what you own, and know why you own it." - Peter Lynch