Diamonds: De Beers Profits and Sales Fall in 2012 & More



De Beers on Ice

De Beers saw profits and sales fall in 2012, the result of what it called “challenging” trading conditions and gyrating diamond prices.

Total sales dropped 16 percent to $6.1 billion. Operating profit dropped 45 percent, to $815 million.

Overall, the company’s rough prices slipped 12 percent last year, with particularly strong drops in the third quarter, thanks to depressed demand and high cutting center stocks, according to a company statement. By year’s end, however, prices had stabilized, the statement said.

The miner expects moderate growth in demand throughout 2013, with improvements forecast in the United States, India, and China.

De Beers Adonis Rose one-line bracelet with diamonds in white gold; £22,000

Missing in Auction

iStockphoto

In April 2012, diamond dealer Brett Stettner made headlines when he won the top lots at both Sotheby’s and Christie’s jewelry sales. At Christie’s, he bid $15.7 million for the Clark Pink, a 9 ct. cushion-cut fancy vivid purplish pink diamond set in a ring. The next day at Sotheby’s, he bid $2.4 million for a fancy blue diamond ring from Tiffany & Co.

Both bids set records and Stettner got extensive publicity for what Business Insider called “a very expensive week.”

But the week didn’t turn out to be so expensive after all; the two transactions ended up being canceled.

“The sale to Mr. Stettner was canceled and the diamond sold privately there­after,” says Sotheby’s rep Darrell Rocha.

“The auction sale to the named buyer was canceled,” says Christie’s spokeswoman Erin McAndrew. “Christie’s then brokered a private sale of the diamond to a collector immediately afterwards.”

Stettner, who is currently involved in litigation over the aborted sale of the 230 ct. Wynn Diamond, declined comment.

Veteran auction watchers describe the situation as unprecedented. “It’s extremely rare for a sale not to be completed,” says Ettagale Blauer, who has been covering auctions for 30 years. “I’ve never seen this happen before.”

The cancellations have rattled the generally staid world of high-value ­jewelry sales. Sources indicate the big houses are rethinking how to hand out high-value paddles; one buyer says the major sellers have significantly tightened their criteria.

“Houses are deeply vetting customers and bid contracts are being signed in advance,” he says. “Big buyers must be preapproved at almost all houses. They’re even asking for escrow funds upfront. The new normal is definitely going to be dashed t’s and dotted i’s.”

Rock of Ages

In late January, Russian diamond miner Alrosa unearthed a 145.44 ct. diamond in the Yubileynaya Diamond Pipe in the Yakutia region of Russia. The huge rock could be worth $1 million if put up for auction, the miner says. The octahedron-shape diamond’s dimensions are 35 x 20 x 26 mm, and it boasts transparent yellow hue, with small graphite-sulfide inclusions in its periphery.

For more cutting-edge diamond news