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Ekati mines. Rapaport TradeWire - Friday April 23, 2004 -------------------------------------- News: Basel show good with huge turnout and strong buying activity. U.S. 2003 gold jewelry sales up 2.5% to $16.3 billion. India annual FY 2003/4 polished exports up 21.32% to $8.63 billion; jewelry exports up 68% to $2.54 billion. South Africa 2003 rough production up 18% to 12.87 million carats. Ekati Q1 rough production unchanged at 1.015 million carats; Rio Tinto production down 37% to 4.534 million carats. DTC reports 2004 diamond advertising spend at $275 million, 37.5% above target. Christie's NY sells $20 million, with 70% of lots sold and D flawless 51.27-carat pear-shaped selling for $3.3 million ($64,365/ct). Sotheby's sold $6.6 million with 76% of lots sold. === Retail Rap === News: Overall U.S. retail chain sales for week ending April 17 up 5.9% year-to-year, and up 1% from the previous week, according to International Council of Shopping Center (ICSC) analysts. Johnson Redbook Research reports average same-store sales for the week up 4.8% after a 5.4% gain the previous week. The week's performance lagged and left many retailers off plan or at the low end of planned range. The slower performance reflected the closing on Easter Sunday as retailers were up against last year's pre-Easter shopping week, making for a difficult comparison. === Retail Quote === "We are encouraged by the leading retailers' increasing inventory commitment to gold jewelry. Despite higher costs for the raw product, gold jewelry sales continue their moderate growth as female consumers choose to express themselves with the warm, stylish and evocative language of gold." -Michael Barlerin, regional director, the Americas, World Gold Council === World News === --- Indian Gem & Jewelry Exports Touch $12 Billion The Gem & Jewellery Export Promotion Council (GJEPC) announced a 31% increase in gem and jewelry exports for financial 2003-2004 (ended March 31). Total gem and jewelry exports were $11.97 billion verses $9.13 billion the previous financial year. Cut and polished diamond exports were up 21.32% to $8.63 billion, Jewelry exports up 68%, to $2.54 billion. Colored gemstone exports down 7%, to $178 million. Total added value for India was $2 billion. --- UN Affirms Backing for Kimberley Process The United Nations this week affirmed its support for a global diamond certification scheme to break the link between the illegal trade in diamonds and armed conflict, the UN's Integrated Regional Information Networks reported from Johannesburg. At the 58th General Assembly plenary in New York on Wednesday, the UN called on its member states to comply with the Kimberley Process Certification Scheme. The process requires diamond-producing countries to control the production and transport of rough diamonds from mines to points of export. Shipments of rough diamonds are to be sealed in tamper-resistant containers and a Kimberley Process certificate must be issued for each shipment. The Assembly welcomed the establishment of a peer-review system, which was seen as key to ensuring the process's credibility. A review mission to the Central African Republic had been completed, South Africa's representative, Dumisani Khumalo, told the Assembly. He said a proposed review mission to the Republic of Congo would help clear up discrepancies in diamond export figures there and help strengthen control systems. --- MIBA in Tel Aviv to Sell Diamonds Rapaport Diamond Report met with representatives of the Societe Miniere de Bakwange (MIBA), the main diamond company of the Democratic Republic of Congo (DRC), who are in Israel this week to sell 12%(76,000 carats) of the company's March production. Total March production was around 650,000 carats. Dan Gertler International (DGI) has the rights to market 88% of MIBA's monthly production for a set rate of $14 per carat. The MIBA representatives said they are very satisfied with the way DGI sorts and evaluates their goods. The remaining 12% is used by MIBA to test market prices for its goods in different diamond centers around the world. This will not be a one-off sale, as, according to a MIBA official: "It takes longer than one month to gauge market prices in a trading center like Tel Aviv." MIBA is aware of the rough shortages on the Tel Aviv market, but says it cannot tie up the 12% in a deal to one source, because using that 12% to sell in various markets is the only way it has to test the market. MIBA has invited new joint venture partners to finance feasibility studies on its concessions to help ramp up production. Once this happens, extra goods could be made available for purposes other than testing the market. Competitors vying for the joint venture opportunity include DGI, De Beers, BHP and Trans Hex. A decision is expected by the end of April or beginning of May, 2004. MIBA hopes to boost diamond production to 8.5 million carats in 2005, from 6.7 million in 2003. --- Diamonds Fare Well at NY Magnificent Jewelry Auctions The spring jewelry auction season kicked off in New York at Christie's on April 19, with solid results. Diamond sales were brisk with competitive bidding; many of the diamonds that went on the block sold on the high end of their estimates or well over. Christie's jewelry specialists attribute the development to the current shortage of larger, high-quality goods. Contrary to the recent trend of the past couple of years, dealers were bidding more actively and scooping up diamonds believing that prices will increase in the next few months. The sale garnered $20.35 million against a presale estimate of $17 to $22 million. The top lot of the sale was an unmounted pear-shaped, 51.27-carat, flawless diamond, which sold for $3,367,500. A fancy vivid blue, rectangular shaped, SI1 clarity diamond took the second spot, selling for $1,463,500. Pretty, signed name jewelry was the star at the Sotheby's New York Magnificent Jewels auction held April 21. The sale of lot #334 garnered $6,652,940 against a $9.2 million to $9.5 million presale estimate, with 75 percent sold by lot. The top lot was a rectangular cut, VS2, 10.28-carat natural color fancy vivid yellow diamond ring. Diamonds again did well with competitive bidding for the stones in easy-to-wear sizes that were well priced. The merchandise was heavily slanted towards period pieces, which also did well. --- Fancy Colors Move Well at Baswelworld 2004 Exhibitors at Baselworld 2004, which came to a close today, report increased buying activity with diamantaires expressing an optimistic outlook for solid turnover throughout the year. Both show organizers and exhibitors were quick to point out that although last year's show was crippled by global uncertainty caused by the Iraq war and the outbreak of Severe Acute Respiratory Syndrome (SARS), this year's show was an overall success. Demand for fancy colored stones was very strong, while high-end diamond jewelry moved nicely. Continuing the upward trend of the last eighteen months, there was a solid demand for branded items, while medium-to-low price points suffered. Exhibitors also report a decrease in U.S. visitors due to the exchange rate and the closeness of the upcoming JCK Las Vegas Show in the beginning of June. --- Strong Push in Diamond Industry Advertising Incremental trade quality advertising spend is at $275 million, according to Jonathan Kendall, Diamond Trading Company's (DTC) international and trade marketing group director. Speaking at a seminar hosted by the DTC on April 19, 2004 at the 2004 Baselworld Watch and Jewelry Fair, Kendall told the audience that this level of advertising spend is well in excess of the DTC's 2004 target of $200 million. During his overview of the positive impact the DTC's Supplier of Choice (SOC) program is having on the diamond industry, Kendall claimed that over 33% of the DTC's goods are now in what he termed "efficient distribution channels that are driving demand." Commenting on the state of the diamond industry, Kendall stated "It is an exciting time, as there are huge opportunities for us as an industry to work together more effectively to ensure greater success." Other presenters at the seminar which focused on improving marketing initiatives within the diamond industry included Dilip Mehta, chief executive officer of Rosy Blue; Michael Wainwright, managing director of Boodle & Dunthorne; Dominique Assenat of Peclers as well as Dominic Brand and Jonathon Pudney, who are both marketing directors at the DTC. --- Kristall Introduces New Diamond Grading Device Kristall Smolensk, Russia's largest diamond manufacturer, has presented the industry with a revolutionary device for measuring a polished diamond's 'appeal coefficient'. The head of the project, Anatoly Bocharov, Kristall's deputy director, technology, believes that the device may cause a revolution in the diamond grading system. The device was demonstrated by Victor Baranov, director of the Laboratory of Scientific-Research Institute of Experimental Physics of the Russian Nuclear Center. The coefficient - named 'charm'- represents "an integrated, generalized characteristic of a subjective perception of a diamond." Charm is determined by measuring the known constituents of a diamond's brilliance - intensity, dispersion, sparkle, etc. The value of the coefficient is also influenced by standard characteristics of a stone -- color, clarity, cut and carat weight, its geometric parameters, and external factors such as light and interior. The value of the charm coefficient is measured by mathematically processing a large number of the diamond's images captured from different bow and turn angles. --- Bodies of 29 Diamond Miners Found in Amazon The bodies of 29 diamond miners allegedly killed by Indians in an Amazon jungle reserve have been found, the Sydney Morning Herald reported from Brasilia on April 21. Police said another 35 miners are still missing in one of the worst such mass killings in South America's richest diamond region. Some 300 police from Espigao d'Oeste, northwest of Rio de Janeiro, flew into the jungle on April 19 to recover 26 bodies of miners, who are believed to have been killed on April 7 in a confrontation with Cinta Larga Indians. Three bodies had been found last week. The confrontation was the third of its kind in recent years. Entry to and mining on Indian reserves without authorization are illegal in Brazil, but hundreds of miners have converged on the reserve because of speculation about the prospect of diamond discoveries. Some 1,000 Cinta Larga live on the Roosevelt reserve. Mercio Pereira Gomes, head of the Government's Funai agency, which oversees Indian reserves, said the Indians "were defending their territory." --- NGO Blames Brazil's President for Clashes After an explosion of violence this week between Brazil's Cinta Larga Indian tribe and diamond miners, hundreds of indigenous representatives are gathering in the capital, Brasilia, to protest government policies. A mass lobby of Congress is planned for April 19, 2004 the annual 'Day of the Indian.' The Cinta Larga tribe claimed that the miners had illegally invaded their reserve. Clashes have left several miners dead. In retaliation, on April 10, 2004, a tribesman was stoned and kicked by miners in the mining town of Espigão do Oeste and saved only by police intervention. Young Cinta Larga girls have reportedly been forced into prostitution by miners and many Indians have been assaulted and threatened since the mine was illegally opened in 2001. In a press release on April 18, 2004, nongovernmental organization (NGO) Survival International wrote that despite clear commitments in his election manifesto to demarcate Indian lands and to defend their rights, Brazilian President Lula da Silva "has failed to tackle the pressing problems which have led to an explosion of violent conflicts throughout the country." It continued that in the northern Amazon the government has continually delayed recognition of the Raposa-Serra do Sol territory -- home to over 12,000 Indians. Encouraged by local politicians, colonists and ranchers have invaded the area. At least 12 Makuxi Indians have been murdered by ranchers during the past 15 years. The situation is extremely tense, because the government has hinted it may reduce the size of the reserve to hand Indian land to outsiders. In the southern state of Mato Grosso do Sul, the Guarani are in a desperate fight to regain their land. The land situation is so acute that some communities live by the side of the road with no land or hope for the future. Malnutrition is common and Guarani children as young as 9 have committed suicide. --- China Leads in Platinum Consumption for Third Year China consumed $2 billion of platinum in 2003, making it the world's largest user of the precious metal for the third consecutive year, the China Gem Association said. The group's report was published in the People's Daily in Beijing. Jewelry sales and production in China have boomed, responding to a developing economy and a higher standard of living, the group said. Annual jewelry sales reached almost $9.7 billion in 2001 from $24 million in the early 1980s. In 2010, annual domestic jewelry sales will reach $21.8 billion, with export sales totaling $5 billion, the group estimated. Yearly domestic sales of diamonds and pearls have reached almost $1.1 billion and $726 million respectively, the association reported. --- Scientist Reveals Signs of Treated and Synthetic Diamonds A senior research scientist at the Antwerp Diamond High Council (HRD) has revealed sets of telltale signs which would indicate that a diamond is synthetic or is a natural stone that has been color treated by a High Pressure-High Temperature (HPHT) method. Dr. Katrien De Corte of HRD Research, Antwerp, spoke at a special symposium April 18, 2004, at the Baselworld Show in Switzerland. The symposium, attended by about 100 participants and entitled "In Defiance of Nature," focused specifically on synthetic and HPHT treated diamonds, which are being seen with increasing frequency in the diamond marketplace. De Corte described the various synthesizing and treatment procedures involved and spoke about methods of identification that are being developed by HRD Research. The telltale signs relate to color, proportions, strain patterns, typical inclusions and sensitivity to ultraviolet and infrared light. The indicators, De Corte stressed, are signals that a diamond may be synthetic or HPHT treated, but not definitive proof. For that to be determined, she said, such diamonds should be submitted for examination to a qualified laboratory. === Retail News === --- Mother's Day Spending to Rise 1.3 Percent, Retail Group Says Consumers plan to spend an average $98.64 on Mother's Day, up 1.3 percent from $97.37 in 2003, according to a report by BIGresearch for the National Retail Federation in Washington. The survey indicates that Mother's Day spending will total $10.43 billion. Consumers buying jewelry will spend the most, an average of $62.40. Clothing buyers plan to spend $31.89 for such purchases, and those taking their mothers to lunch plan to spend $40.54. Many consumers "see this as an important day to honor the women in their lives," said Tracy Mullin, president and CEO of the National Retail Federation. "With all the sacrifices mom has made over the years, Mother's Day is an opportunity to give something back." "In addition to their own mother, many consumers are also buying gifts for their daughters, wives, and grandmothers," said Phil Rist, vice president of strategy for BIGresearch. "When you're honoring several mothers on one holiday, a $100 price tag is not hard to achieve." --- U.S. 2003 Gold Jewelry Sales Up 2.5% Gold jewelry sales in the U.S. increased by 2.5% to above $16.3 billion in 2003, according to a survey undertaken by NOP World, sponsored by the World Gold Council (WGC). This increase marks the thirteenth consecutive annual increase in U.S. gold jewelry sales. The survey also shows a rise of 3.9% in gold jewelry units sold, while the average price per unit declined by 1.3% to $76. The increase in gold jewelry sales was spurred by bracelet sales, which increased by 8.2% and 6.8% in terms of value and quantity respectively, as well as earring sales, which increased by 2.6% and 6.6% by value and quantity, respectively. In terms of channel distribution, mass merchants saw the largest percentage increase of 3.6% in dollar sales to $3.7 billion, while jewelry stores, the largest distribution channel, reported a 2.3% increase to $8.1 billion. --- Aber Appoints New Harry Winston Inc. CEO Aber Diamond Corporation and Harry Winston, Inc., have announced the appointment of Thomas O'Neill as chief executive officer of Harry Winston, Inc., and president of Aber. This appointment closely follows Aber's purchase of a 51% controlling interest in the jeweler on April 2, 2004. Commenting on the appointment, Ronald Winston, chairman of Harry Winston, Inc., stated, "I am pleased and excited that Mr. O'Neill will be leading the management team." O'Neill's experience in the luxury retail industry spans 20 years. His career commenced at Tiffany & Co., where he last served as executive vice president with responsibility for international markets. In 1997, Mr. O'Neill left Tiffany to become president of Louis Vuitton, Americas, as well as chief executive officer of the fashion house Marc Jacobs and ultimately the president and chief executive officer of the LVMH Fashion Group in the Americas. In 2000, he transferred to Paris as president and chief executive officer of the newly created LVMH Jewelry Division. He joined Burberry in 2001. Commenting on his own appointment, O'Neill said that he was "looking forward to continuing the Harry Winston legacy while revitalizing the brand and contributing to the ongoing success of Aber." --- Legal Proceedings Still Haunt Whitehall Whitehall Jewellers has filed its annual report on Form 10-K for the fiscal year ended January 31, 2004, but is still embroiled in ongoing legal proceedings. On March 23, 2004, Whitehall announced that it had accrued a litigation reserve of $6 million for the consolidated Capital Factors actions and the U.S. Attorney and Securities and Exchange Commission investigations. Since that time, the company has engaged in further settlement negotiations and accrued an additional reserve of $2.6 million for the period. In a statement Whitehall said it cannot provide any assurance "that it will be able to reach a settlement with any of the parties to the consolidated Capital Factors actions or that any settlement or settlements will be for the amount recorded as a reserve." --- Retailers Welcome New Overtime Regulations The National Retail Federation (NRF), Washington, D.C., called the U.S. Department of Labor's (DOL) release of new federal white collar overtime regulations "a victory," saying the long-sought update would help put an end to costly litigation from disputed overtime pay decisions. The NRF counts among its members Tiffany & Co. and Fortunoff Fine Jewelry, both based in New York. The regulations address which employees qualify for time-and-a-half pay beyond 40 hours per week. There are new income tests and job duty tests to determine eligibility. The labor regulation on nonmanual labor overtime had not been changed in more than 50 years. The new DOL rules update the Fair Labor Standards Act of 1933 and go into effect in 120 days. Since their publication in draft form in March, 2003, the new rules have drawn controversy, being opposed by many labor unions and setting off a political battle. Craig Shearman, a spokesman for the NRF, said labor contracts supersede the federal rule, and he applauded the raising of the pay threshold for nonunion employees from $8,060 a year under the old regulation to $23,660 when the new regulation takes effect. Below that level, workers are guaranteed overtime pay. Under the current regulations, many assistant store managers with salaries of about $20,000 do not qualify for overtime pay, even when they work 60-hour weeks. --- Blue Nile Sets Terms of IPO Underwriters for Blue Nile, a leading online retailer of high quality diamonds and fine jewelry, set the terms of the company's pending initial public offering (IPO) at 3.74 million common shares, with a price of $17.50 to $19.50 a share. The Seattle, Washington,-based company said on April 19, 2004, that it is selling two million shares, while shareholders are selling the rest. On March 11, 2004, Blue Nile filed an IPO to sell up to $75 million in common stock, but did not disclose details. In an amended Form S-1 form filed yesterday with the Securities and Exchange Commission, the company said it expects the net proceeds from the offering will be $32.4 million. According to the filing, there will be 17.3 million common shares outstanding after the offering. The company intends to list its common stock on the Nasdaq National Market under the symbol NILE. === Stock Watch === Thurs. Thurs. Change($) Change(%) Apr. 15 Apr. 22 Finlay(FNLY) $17.34 $18.66 $1.32 7.61% Friedman's(FRDM) $5.95 $5.84 ($0.11) -1.85% JC Penney(JCP) $34.55 $36.05 $1.50 4.34% Neiman(NMGA) $51.38 $51.45 $0.07 0.14% Nordstrom(JWN) $37.70 $38.32 $0.62 1.64% Signet(SIGY) $62.21 $62.72 $0.51 0.82% Tiffany(TIF) $38.60 $41.52 $2.92 7.56% Wal-Mart(WMT) $57.79 $58.60 $0.81 1.40% Whitehall(JWL) $9.05 $9.30 $0.25 2.76% Zale(ZLC) $58.29 $59.68 $1.39 2.38% Dow Jones Avg. 10,397.46 10,461.20 63.74 0.61% === Africa News === --- SA Achieves Record Diamond Production in 2003 Preliminary statistics released by South Africa's diamond board indicate that South Africa's diamond production surged 18% to a record level of over 12.87 million carats in 2003, compared to the 10.92 million carats produced in 2002. The higher production is attributed to increases at De Beers Venetia, Kimberley and Namaqualand mines. South Africa is the fifth-largest diamond producer in terms of volume -- carats -- after Australia, Botswana, Russia and the Democratic Republic of Congo (DRC). However, in terms of value -- estimated at $950 million -- its ranking has dropped from third to fourth behind Botswana, Russia and Canada, following the latter's doubling of production in 2003. These figures exclude the production of the majority of diggers -- the small, privately owned alluvial diamond producers operating concession areas in the Northern Cape, North West and Free State provinces who, according to the diamond board, produce between 130,000 and 300,000 carats per year. According to Minerals Bureau statistics, a total of 75 mining-licensees produced diamonds in 2003, of which, 16 mined kimberlites, 42 exploited alluvial deposits and 17 recovered diamonds from a marine environment. Kimberlite production contributed about 11.64 million carats -- 90.4% -- to total output, notably up from the 9.86 million carats produced in 2002, as a result of higher production at De Beers Venetia and Kimberley mines. Alluvial diamonds contributed about 1.11 million carats, a modest increase compared with 2002, while marine diamond production, which was dominated by the Trans Hex Group and Alexkor, rose to around 117,000 carats from 75,000 carats in 2002. Mines owned by De Beers accounted for 92.5% or 11.9 million carats of South Africa's recorded production, compared with 10.4 million carats in 2002. --- Thousands of Congolese Expelled from Angola Tens of thousands of Congolese nationals expelled from Angola are in urgent need of humanitarian aid in two southwest provinces of the Democratic Republic of Congo, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) said in a report of April 17, 2004, posted to the web today. Many of the Congolese citizens expelled from Angola since December 2003 had been living and working illegally in the country as diamond miners, OCHA said. The agency said returnees in the provinces of Bandundu and Kasai Occidental need food, water, health care and nonfood items. This situation was clarified by an OCHA-led interagency needs assessment mission on April 17, 2004, to those two provinces. It is estimated that between 80,000 and 100,000 Congolese have been or will soon be forcibly expelled. Since April 2, at least 40,000 Congolese have been registered in Bandundu and Kasai Occidental after crossing the Tungila River from Angola. This amounts to at least 2,500 people daily, although the count may be higher, because many of these people are not passing through registration points. Humanitarian relief is being coordinated through OCHA. --- Congo Laments Angola's Expulsion of Congolese Angola's expulsion of tens of thousands of Congolese is causing mayhem, the Democratic Republic of Congo's interior minister said, according to South Africa's Mail & Guardian. After speaking with Angolan Foreign Minister Joao Miranda, the DRC's interior minister, Theophile Mbemba Mfundu, said his country "does not have the necessary logistics to accommodate these people repatriated from Angola." About 40,000 returnees have been registered in the DRC this month, the United Nations has said. Angolan authorities have rounded up more than 60 000 foreigners, most of them from the DRC, over the past four months to try to stop illegal diamond mining and trading. The DRC is still suffering the effects of a five-year war. That conflict, which involved as many as six other African nations, including Angola, killed about 2.5 million people in combat or through disease and hunger. The war, which crippled the Central African country's economy and infrastructure and gravely harmed its diamond industry, ended in April 2003 with a peace accord. === Mining News === --- Rio Tinto Quarterly Production Down 37% Rio Tinto's diamond production for the quarter ended March 31, 2004 reached 4.534 million carats representing a decline of 37% on the previous corresponding quarter in 2003 and 49% on the preceding quarter ended December 31, 2003. The decline in output is a result difficult mining conditions at the Australian Argyle diamond mine which comprises 80% of Rio Tinto's total diamond production. Despite the overall decline in diamond production, output from Rio Tinto's 60% owned Diavik diamond mine in Canada's Northwest Territories reached 922,000 carats in the quarter ended March 31, 2004, an increase of 40% on the corresponding quarter in 2003 and 274% above the preceding quarter ended December 31, 2003. Amongst other factors, the increase in output was attributed to the processing plant operating ahead of design capacity. Rio Tinto also announced that it has commenced construction of a small scale diamond mine and plant in Murowa in Southern Zimbabwe at a cost of $11 million. The mine comprises 3 kimberlite pipes, 16.5 million tons of ore and a grade of 0.9 carats per ton. The company expects production from Murowa to commence during the second half of 2004 and diamonds recovered will be marketed through Rio Tinto Diamonds in Antwerp. --- BHP Billiton Reports Flat Quarterly Diamond Production BHP Billiton's diamond production from its Ekati diamond mine reached 1.015 million carats for the quarter ended March 31, 2004 in line with the previous corresponding quarter in 2003, however production was down 40% on the preceding quarter ended December 31, 2004. The company attributed the decrease in production to the completion of processing from a pocket of high grade material from the Koala pit in December 2003. For the nine months ended March 31, 2004, diamond production was up 17% to 1.422 million carats compared to the previous corresponding period. The Ekati diamond mine located in Canada's Northwest Territories is BHP Billiton's only diamond mine and produces approximately four per cent of current world diamond production by weight and six per cent by value. --- Churchill Diamond Exploration Starts Shear Minerals Ltd., Stornoway Diamond Corp. and BHP Billiton announced that the 2004 field program on the Churchill Diamond Project has commenced with a detailed aerial geophysical survey. The site covers 8.5 million acres on the west coast of Hudson Bay in Canada. The survey includes the collection of more than 33,000 line-km of detailed magnetic and electromagnetic data. The survey, which will be flown in two stages, is being conducted by Fugro Airborne Surveys using its helicopter-borne Resolve system. The survey will focus on the core mineral claims where the most favorable mineral chemistry has been recovered. Last year, 18 kimberlites were found, 10 of which had diamonds in them, and there are currently more than 250 high priority targets on the vast property, said a spokesman for Shear Minerals, Norman Eaton. Shear Minerals Ltd. is based in Edmonton, Alberta, and Stornoway is headquartered in Vancouver, British Columbia. Canadian sites currently have the greatest financial investment in exploration, and Canada ranks third in diamond production, after Botswana and Russia. --- SouthernEra 2003 Diamond Sale Prices Rose 15% SouthernEra Resources Ltd., a Toronto-based platinum and diamonds producer, reported on April 20 that 2003 mining revenue more than tripled while average selling prices for diamonds rose 15%. SouthernEra reported that its full-year net loss grew to $12.3 million, or 20 cents a share, from $9 million, or 19 cents, in 2002. The company attributed the loss largely to the strength of South Africa's rand against all major currencies. The platinum-metals group began commercial production in fourth-quarter 2003 at the Messina Phase 1 mine. Revenue from that operation and from diamond sales derived from SouthernEra's holding in the Klipspringer joint venture totaled $12 million. In the corresponding 2002 period, revenue from diamond sales totaled $3.2 million. The company's portion of diamonds recovered in 2003 shrank 17% to 37,885 carats from 45,566 in 2002. SouthernEra's average selling price for the diamonds advanced to $85 a carat from $74. Direct mining costs quadrupled to $21 million from $5 million because Messina's fourth-quarter operating costs were included in the latest period. The company said earlier this month that it was considering a plan to separate the platinum and diamond operations into two public companies. --- SearchGold Recovers 3 Large Diamonds at Mandala SearchGold Resources Inc., a Montreal-based producer of diamonds and gold, said on April 20 that it recovered three unusually large diamonds within the Mandala III North bulk sample of its Mandala River diamond project. The three diamonds, measured at 21.47 carats, 10.72 carats, and 7.26 carats, confirm the presence of large diamonds in Mandala's diamondiferous gravels, SearchGold said. The Mandala Alluvial Diamond Project is located in Guinea, West Africa. Placer Analysis Ltd. sampled the Mandala and N'Keleyani Rivers Flats and measured an indicated resource of 615,000 carats of diamonds within the Mandala River exploitation permit area owned 80.75% by SearchGold through its 95% -owned Guinean subsidiary, Ressources Mandala Guinee SARL. The company also said it's planning a third diamond delivery to Antwerp at the end of April, "and according to the interim results, this shipment will be a record one." --- Anglo American to Boost Investment in China Anglo American plans to increase its investment in China, to explore for resources including gold and diamonds, Chief Executive Tony Trahar said. Trahar spoke at a ceremony on April 21, at which Anglo American donated samples of gold, platinum and diamonds to the new Geological Museum of China. The ceremony was attended by China's minister of land and resources, Sun Wensheng. Anglo American could help China find more minerals with its expertise and advanced technology and equipment, he said. Trahar also suggested that the company could help China improve mining safety. Anglo American, with annual sales of $21 billion, has interests in gold, platinum, diamonds, coal, base and ferrous metals, industrial minerals, and paper and packaging. Since the mid-1980s, Anglo American has invested in a number of mining and industrial projects in China. The company holds 45% of De Beers. === Indian Diamond Market Update === --- Market Slower Than Usual --- The polished market has settled back into routine but at a much lower level than usual for this time of year. No price variations are expected for some time, as not much rough is purchased around this time and many firms also will be closing for the summer vacation shortly. --- POLISHED: -1 point: Very good demand: $100-$200 whites. Good demand: $120-$180 white natts. Fair demand: $200-$250 whites. -2 point: Very good demand: $150-$250 whites. Good demand: $260-$320 whites. Fair demand: $325-$360 whites; $125-$175 white natts. 2-7 point: Good demand: $200-$360 whites. Fair demand: $200-$275 +8 white natts. 8-18 point: Very good demand: $400-$525 whites. Good demand: $250-$375 whites. Fair demand: $150-$225 whites; $400-$450 OW LC; $250-$325 TTLC, $200-$250 OW TTLB & TTLC.; $425-$475 OW TTLC; +14-point $525-$575 OW TTLC; $200-$350 white natts. 20 points: Very good demand: $300-$350 whites. Good demand: $150-$200 whites. Fair demand: $200-$300 whites; $600-$650 OW TTLC. 25 points: Very good demand: $175-$225 whites. Fair demand: $250-$400 whites. 33 points: Good demand: $425-$550 whites; $225-$300 TTLB. Fair demand: $375-$425 whites. 50 points: Good demand: $800-$1,000 whites; $400-$700 whites. Fair demand: $200-$400 whites; $450-$600 OW TTLC. 75 points: Good demand: $700-$1,200 whites. 1 carat+: Very good demand: $1,000-$4,000 whites; $1,000-$5,000 +2 ct I+ color. Good demand: $800-$1,000 whites; $500-$800 whites & white natts. Fair demand: $200-$500 whites. Princess: -3 point: Good demand: $150-$250 whites. +3 point: Fair demand: $200-$250 whites. +9-18 point: Good demand: $225-$300 whites; +14 point: $275 - $325 whites. 20 points: Fair demand: $300-$335 whites. 33 point: Fair demand: $500-$600 whites. 50 point: Good demand: $600-$1,000 whites. 1 carat+: Good demand: $1,000-$1,200 whites. Fair Demand: $1,600-$2,200 whites. Marquise: -6 point: Good demand: $250-$310 whites. Fair demand: $400-$450 whites. +7-18 point: Good demand: $175-$250 whites; +14 points $250- $300 whites. Fair demand: $500-$600 whites. 20 point: Fair demand: $275-$325 whites. 25 point: Fair demand: $325-$375 whites; $425-$450 whites. 33 point: Good demand: $400-$475 whites. 50 point: Good demand: $550-$650 whites; $850-$1000 whites. 1 carat+: Good demand: $800-$1,200 whites. Fair demand: $1,500-$1,800 whites. Tapers & Baguettes: Good demand: $225-$300 2mm-2.5mm whites; $300-$350 2.5mm-3mm whites; $150-$225 +2mm-3mm whites. Fair Demand: $575- $650 +5mm whites. --- ROUGH: 1-7 point: Fair demand: $25-$40 & $57-$101 sawn princess; $45-$98 rounds; $35-$79 crystals. Fair movement: $11-$26 & $45-$75 makeables; $18-$34 (2-3 pointers) rounds; $75-$105 sawables. 8-20 point: Slow demand: $40-$55 & $79-$120 rounds; $20-$36 & $65-$108 crystals; $25-$53 & $75-$114 sawn princess; $35-$78 clivage. Slow movement: $25-$48 & $73-$110 makeables; $35-$60 flats; $30-$51 baguettes. 21-49 point: Fair demand: $55-$125 rounds; $65-$130 sawn princess; $78- $115 crystals. Slow movement: $150-$220 rounds; $58-$97 clivage; $45-$79 flats; $38-$78 baguettes; $75-$131 makeables. 0.5-1 carat: Fair demand: $63-$89 & $108-$160 sawn princess; $78-$135 crystals; $185-$225 rounds. Slow movement: $45-$85 & $105-$175 makeables; $68-$105 flats; $47-$85 baguettes. 1-3 carat: Good demand: $115-$200 clivage; $120-$173 & $239-$415 rounds; $909-$1,254 makeables & rounds +3-carats. Fair movement: $75-$120 flats; $91-$128 & $187-$283 OW; $150-$225 sawables. ======================================== Are you interested in trading Rough or Polished diamonds? Contact the Rapaport Trading Department [e-mail] Rapaport Offices in New York, Las Vegas Antwerp, Vicenza, Ramat Gan, Mumbai and Hong Kong. ========================================= ==== TradeWire Notices And Restrictions ==== === Providing News === If you have any news that may be of interest to our readers, please send your information via email to [e-mail]. You may also call our editorial department at 1-212-354-9100 ext. 242. === Share Your Opinions === The Rapaport TradeWire encourages readers to share their views. 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