DIAMOND

December 7, 2010 | Vol.25 No.634

By Chaim Even-Zohar INTELLIGENCE

Ultimatum to Zimbabwe – Take It or Leave It “Take it or leave it.” That is the implicit operational message contained in an otherwise diplomatic and courteous letter that the Chair of the Kimberley Process (KP), Boaz Hirsch, sent yesterday to Zimbabwe Minister of Mines and Mining Development Obert Mpofu. This reference is, of course, to the proposed draft decision agreed by the Working Group on Monitoring (WGM) members in its recent Brussels meeting. What Hirsch actually wrote was: “I wish to suggest that Zimbabwe will convey its unreserved acceptance to the Draft Administrative Decision, as forwarded to you in my letter of the 29th of November 2010. KP Chair Boaz I also recognize that your concerns should be addressed, and I suggest Hirsch that to that end, that the issue you have raised will be discussed at the coming Intersessional.” [See page 6330 for the full text of the letter.] The letter came in a reply to Zimbabwe’s strong opposition to the so-called “violence clause,” which allows two BRIEFS members of the WGM to trigger a complete export halt from all mines in the Marange area, including fully KP-compliant producers, subject to a further decision by the full WGM. What really irked the Zimbabweans was the so-called “reverse consensus” condition tied to the cessation of exports. The Brussels text reads that a consensus of the WGM is needed to resume exports after stoppage, while Zimbabwe claims that it had agreed to a clause requiring a consensus to maintain a cessation of exports. Zimbabwe acknowledges that it had agreed to the Jerusalem Agreement - but not to this specific clause. The Chair thinks otherwise. In his December 6th letter, the KP Chair makes it clear that any reservations Zimbabwe may have can be discussed next June in Kinshasa, when the next KP Intersessional will take place. Until then, the county can “take it or leave it.” In fact, there is really no mechanism to consider further changes – the southern African governments close down for summer vacation, while the rest of the world also approaches a holiday season.

Zimbabwe: Regarded as Pariah State The hardest thing to swallow for the Zimbabweans is that nobody really cares. To the world, Zimbabwe’s status seems on par with Iran, North Korea, Syria, Cuba or other countries commonly referred to as “terror states” or “pariah states.” To be blunt about it, a few countries (i.e. KP Participants) and some NGOs couldn’t give an iota and actually prefer that A Confidential Service for Zimbabwe’s rough diamonds will not – or will never – be officially exported. Executives in the Diamond and Diamond 6331 4 CORNERS OF THE GLOBE Jewelry 6334 DIGGING THE DIRT  6335 BRIEFLY NOTED  6336 OFF THE SHELF Business EDITORIAL

Rough diamond stocks belonging to the former Canadile joint venture in Marange, which lost Plenary), the impression was given that its mining license amid corruption charges. the United States had become more conciliatory toward Zimbabwe, some KP Participants felt having a higher comfort level for sounding support for Zimbabwe. When the tune in Washington hardened (during the subsequent Brussels meeting), the music changed as well. The world has only one Superpower.

Wikileaks Says It All A secret cable by former U.S. Ambassador to Zimbabwe, Christopher W. Dell, made at the end of his tour of duty, sums up his country’s policy: “My views can be stated very simply as stay the course and prepare for change. Our policy is working and it’s helping to drive change here. What is required is simply the grit, determination and focus to see this through. Then, when Unofficial Exports the changes finally come we must be ready to move quickly to There is little need to repeat here the preferred diamond- help consolidate the new dispensation.” industry position that it is far better for the diamond community to The ambassador (in 2007) expected the regime change absorb Marange diamonds through visible, traceable, monitored and official channels than to have everything simply smuggled Christopher Dell, out and paid through laundered money – as is the case of the former U.S. Venezuela. Moreover, even within the industry there are cracks: ambassador to Zimbabwe there are those (and I believe this includes De Beers) that worry that Marange diamonds in the formal distribution channels of the organized trade might contaminate the image of diamonds. Keeping them “out” might better protect the diamond image – and would allow exorcising the “less desirables” from industry ranks. Additionally, it is clear to producers that the current high rough diamond prices could not have been achieved if the Marange stockpile would have been sold off already. There are reasons to believe that, at least in the eyes of the KP, some illegal rough exports have already taken place to be near. He observed that “Robert Mugabe has survived for in recent weeks. The KP Chair alludes to this when he writes in so long because he is more clever and more ruthless than any his letter: “Meanwhile, I would reiterate my call that Zimbabwe other politician in Zimbabwe. To give the devil his due, he is a refrain from making exports until consensus can be reached.” brilliant tactitian and has long thrived on his ability to abruptly If diamonds were exported, they must either float in the change the rules of the game, radicalize the political dynamic air or be at a free trade zone. No KP Participant has imported and force everyone else to react to his agenda. Zimbabwe rough from the November tender to date. However, he is fundamentally hampered by several factors:

Regime Change Remains Ultimate Goal All the rhetoric in recent weeks from some southern African President Robert Mugabe producer countries, Dubai, and even China, has shown that, at the end of the day, nobody wants to risk a confrontation with the United States over diamonds. It has nothing to do with fairness – some KP countries’ human rights violations are far more serious than Zimbabwe’s – it has everything to do with politics. Other countries literally get away with murder and rape, while in Zimbabwe, each guard dog bite can trigger an international outcry. But that is what the KP is – a political union, whether we like it or not. When, just for a short period (before and during the KP

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his ego and belief in his own infallibility; his obsessive focus on the of the comrade’s favorite phrases, could ‘go hang,’ leaving it to past as a justification for everything in the present and future; his the international community to stave off the worst humanitarian deep ignorance on economic issues (coupled with the belief that consequences,” says the ambassador. his 18 doctorates gives him the authority to suspend the laws of This is not the place to argue a leaked – and outdated – U.S. economics, including supply and demand); and his essentially cable, except to stress that the U.S. government’s fears that short-term tactical style.” the Zimbabwe president will enrich himself and stay in power The U.S. ambassador devotes most of his cable to the various through diamond revenues is as acute today as it was before. end-scenarios, on how the regime change will happen. He When Ambassador Dell wrote his cable, there were few concludes that “The final, and probably worst, possibility is that outside investors in the Marange diamond areas. Corruption Mugabe concludes he can settle for ruling over a rump Zimbabwe, is still rife, as the still-unraveling Canadile saga underscores. maintaining control over Harare and the Mashon heartland, the Everything is a matter of degree. Even the United States should critical forces of the National Reserve Force and CIO and a few ask itself what will achieve its policy objectives more effectively: key assets gold, diamonds, platinum and Air Zimbabwe to fund allowing official transparent rough diamond exports or letting the good times. Under this scenario, the rest of the country, in one anarchy prevail. 

H.E. Minister Obert Mpofu December 6th, 2010 Minister of Mines and Mining Development Zimbabwe

Your Excellency,

Thank you for your letter of 2 December 2010 concerning the proposed draft Administrative Decision presented as a result of the consultations held at Val Duchesse. I welcome your decision to accept the terms of the proposed Administrative Decision. It is my view that substantial progress has been made during the last few weeks towards finding an agreed approach allowing for the resumption of KP endorsed exports from compliant mines in Marange. It has been my goal to find a consensual approach between, on the one hand, the understandable desire of Zimbabwe to resume immediate and unconditional exports from compliant mines and, on the other, the demands of the international community that conditions for those exports should meet international requirements. However, I note with concern your reservation regarding the oversight mechanism in para 3.b. This safeguard mechanism was set up to address concerns of WGM members that may arise in the course of implementation, and will self-dissolve if no notifications are made within one year. As you well know, such oversight mechanism is a key element of the draft Administrative Decision, which constitutes a package and cannot be dissembled. I also note that the mechanism was already part of the proposal agreed upon by Zimbabwe in Jerusalem on 4 November, and has simply been reformulated at the Val Duchesse consultations in light of comments from various Participants and with a view to ensuring its consistency with KP rules. I would therefore take the view that Rule 43 of the “Rules of Procedure” is not applicable to the case at hand and would not help us make progress: Please note that other KP Participants also had reservations regarding the text, but agreed to lift those reservations in a spirit of compromise. I wish to suggest that Zimbabwe will convey its unreserved acceptance to the Draft Administrative Decision, as forwarded to you in my letter of the 29th of November 2010. I also recognize that your concerns should be addressed, and I suggest that to that end, that the issue you have raised will be discussed at the coming Intersessional. Once I receive your agreement to the draft Administrative Decision, I shall act to validate the draft Administrative Decision by written procedure. Once approved, this will enable the immediate resumption of exports from Marange according to the Administrative Decision. Meanwhile I would reiterate my call that Zimbabwe refrain from making exports until consensus can be reached. In conclusion, I believe that the balance achieved in the draft Administrative Decision will provide fresh impetus for Zimbabwe’s continued participation in the Kimberley Process us and I look forward settling the remaining issue at the earliest so that the draft Administrative Decision can be put under written procedure for its adoption.

Sincerely yours, Boaz Hirsch Chair, Kimberley Process cc: Stéphane Chardon, Chair of the Working Group on Monitoring

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Zimbabwe Civil Society Clarifies Appointment, Role of New KP Local Focal Point Coordinator

uring the Kimberley Process (KP) Plenary in Jerusalem last month, the matter of the KP Local Focal Point in Zimbabwe, Dwhose role is to promote dialogue and engagement between civil society, industry and government, was resolved with the confirmation by the KP’s Working Group on Monitoring (WGM) of Shamiso Mtisi as the coordinator of the Local Focal ZIMBABWE Point, says a statement issued by civil society. As coordinator, Mitsi is expected to act as the point of liaison between the Local Focal Point, the KP Monitor and the WGM, says the statement. Mtisi is a lawyer and a representative of the Zimbabwe Environmental Lawyers Association (ZELA) in the technical committee of Zimbabwe Civil Society’s KP Local Focal Point. The technical committee is an instrument created by civil society and is not mentioned in the draft KP Plenary decision. [See box.]

Local Focal Point Technical Committee BRUSSELS RESOLUTION TEXT According to the background statement, the technical ON KP CIVIL SOCIETY committee was formed by the National Association of Non- he draft Administrative Decision, which reflects the KP Government Organisations (NANGO), which comprises six civil TPlenary resolutions, will contain the following text (if the society organizations with knowledge of the events in Marange government of Zimbabwe will not raise further objections): and expertise on the KP. “The technical committee acts as the “The WGM monitoring is to be based notably on quarterly Local Focal Point and has all the powers vested in the Local Focal reporting provided by the Government of Zimbabwe and Point by the WGM as agreed in the St. Petersburg agreement,” reports from the KP Monitor with support from the Local Focal writes NANGO in a public notice. Point, as established at St. Petersburg and designated by the The members of the technical committee are Centre for KP Civil Society Coalition. Plenary endorses the designation Research and Development (CRD), Zimbabwe Environmental of the Local Focal Point, and calls upon Zimbabwe to grant Law Association (ZELA), Zimbabwe Lawyers for Human Rights free and unfettered access to the whole of the Marange (ZLHR), Women’s Coalition, Counselling Services Unit (CSU) and area and to guarantee the safe operation of the KP Monitor, Crisis in Zimbabwe Coalition. NANGO acts as the secretariat. Local Focal Point, and any future KP Review Mission.” “Each member of the Local Focal Point is mandated with According to this text, the Local Focal Point supports monitoring a particular aspect of the Joint Work Plan and produces KP Monitor Abbey Chikane and its reporting takes place reports that will be discussed by the group and presented to the through the Monitor’s Quarterly Reports. KP Monitor or to the WGM. The report to the KP Monitor or the WGM is done by the Local Focal Point coordinator,” according to the public notice. “Therefore,” writes NANGO, “the Local Focal Point is not an individual or Mr. Shamiso Mtisi… Mr. Mtisi is just the Co-ordinator or a liason person, all the powers to make decisions lie with the Technical Committee/Local Focal Point. It is a mechanism composed of seasoned researchers with knowledge and expertise on the Kimberly Process and the situation in Marange,” explains NANGO.

Events Leading up to Mtisi’s Appointment Back in August, NANGO had appointed Farai Maguwu, director of the Centre of Research and Development, as coordinator of the Local Focal Point. However, soon after Maguwu’s appointment had been announced, a group of non-governmental organizations loyal to Zimbabwe President Robert Mugabe’s ZANU PF party had refused to recognize him. They went so far as to convene at the office of Mines and Mining Development Minister Obert Mpofu in Harare and demand that the appointment be annulled while appointing their own Local Focal Point coordinator. Farai Maguwu, who served a five-month jail sentence last summer on charges of allegedly circulating Maguwu false reports prejudicial to the state about human rights abuses in the Marange diamond area, he stepped down before last month’s KP Plenary citing personal and institutional reason. It was then agreed among NANGO members in October, prior to the KP Plenary, that Mitsi would replace him. “The Working Group on Monitoring thereupon expressed support for the proposal on the 25th October 2010. On the 1st of November 2010 in Jerusalem, Israel the Civil Society Coalition announced in Plenary the appointment of Mr. Mtisi while the Working Group on Monitoring also noted the fact that a Local Focal Point is now in place,” says a NANGO public notice.

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The Zimbabwe Government’s Position With regard to the Zimbabwe government’s position on the Local Focal Point, NANGO clarifies that while “it is understandable that there is need for engagement and to inform the Ministry of Mines about the appointment,” the St. Petersburg agreement “does not state that the appointment of the LFP [Local Focal Point] will be done in consultation with Government,” states the NANGO public notice. “The issue of consensus on decisions only relates to the consensus that was secured when Zimbabwe agreed with the KP in St Petersburg that a Local Focal Point will be appointed by the KP civil society,” writes NANGO. “Unfortunately, the Working Group on Monitoring only discussed and expressed support for the LFP mechanism and the appointment of Mr. Mtisi on the 25th of October 2010, just a day before the Coordinator of the LFP was to travel to Jerusalem for the KP Plenary on the 26th of October 2010. There was no time to inform the Ministry about the acceptance of the Coordinator by the WGM,” states NANGO. “Nevertheless, the LFP is ready to engage the government on this matter.”

Zimbabwe Says It Will Sell Marange Rough from Marange Diamonds the Mbada Zimbabwe will proceed to sell its diamonds since it Operations is compliant with all the requirements of the Kimberley Process Certification Scheme (KPCS), the state-controlled

ZIMBABWEHerald said, citing Mines and Mining Development Secretary Thankful Musukutwa. The mines secretary told a visiting Norwegian delegation that his country’s rough trade would not be stopped by NGOs and “hostile nations,” reports the Herald. Musukutwa reportedly said that while Zimbabwe has had “a few problems” with the KPCS, “we have worked our way up Indian Government Restricts Trade and we are very compliant," cites the Herald. Musukutwa added of Marange Rough that Zimbabwe feels that it has done more than other countries India’s Ministry of Commerce and Industry has sent a to meet the KP minimal requirements and that the KPCS should INDIA memorandum to the Department of Revenue advising its stick to its mandate and stop engaging in politics, reports the Joint Secretary, Sandeep M. Bhatnagar to adhere to the Kimberley Harare-based newspaper. Process (KP) Chair’s Notice, dated November 17, 2010, informing According to the news report, the Norway’s Deputy Foreign that no trade of Marange diamonds can currently take place Affairs Minister Ingrid Fiskaa, who led the delegation, did not state under the Joint Work Plan until an agreement can be found. the purpose of the visit other than to say that the delegation was The letter, signed by Anurag Saxena, Joint Secretary of the in the country to know more about the political situation, issues Department of Commerce, also states that “KP Chair has also of human rights and developments in the diamond industry. requested the Participant countries to be vigilant and to notify the Working Group on Monitoring Chair in the event of Mines Secretary receipt of an irregular shipment of Marange diamonds.” Thankful Musukutwa, left, sitting with Mines The Department of Revenue’s Joint Secretary also Minister Obert Mpofu. requests that the information “be circulated to all Customs field formations.” Copies of the letter, which contained a copy of the KP Chair’s notice, were also addressed to the Department of Revenue’s Directorate General of Export Promotion and the Executive Director of the Gems & Jewellery Export Promotion Council.

[To see the full text of the KP Chair's notice, see DIB 632: http://tinyurl.com/2vsdlyb]

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DDC President: Like New York, Stephane Shanghai Also Needs to Focus on Fischler Domestic Diamond Market

CHINA The role of Shanghai’s diamond center most closely parallels that of New York’s, asserted Moshe Mosbacher, President of the Diamond Dealers Club, while speaking at the China Diamond Conference in Shanghai. "I believe that, in many respects, the business models that have been developed in my city and my country over the past several decades are particularly applicable to Shanghai and the Peoples Republic of China," Mosbacher added. Like New York has in the United States, Shanghai today serves as the financial nerve center of its national economy, the DDC President said. "And like the Diamond Dealers Club of New York in the United States, the Shanghai Diamond Exchange was the Chinese Translation of IDC Grading first diamond bourse to be established in Mainland China, and Rules Presented in Shanghai it functions today as the official point of entry to this country's To ensure the viability of the global diamond diamond market." manufacturing industry, long-term competitiveness What traditionally has characterized New York in comparison is needed, said Stephane Fischler, Treasurer of the to other major diamond centers, and soon will characterize International Diamond Manufacturers Association (IDMA), Shanghai, Mosbacher observed, is the need to focus almost while addressing the 2010 China Diamond Conference exclusively on its domestic market. in Shanghai. The DDC President also stated that "China's political Fischler, who also appeared in his capacity as leadership has declared its intention of raising the relative Chairman of the International Diamond Council (IDC), level of consumer spending so that it becomes a more critical discussed the geopolitical shifts and the financial dynamics source of growth in the Chinese economy. McKinsey's research the industry has experienced. He also focused on the suggests that Chinese consumer consumption as a share of development of new consumer markets in India and China. GDP will only approach the 40 percent mark by 2025, but that In his speech, Fischler discussed issues such as the alone will result in a middle class in China that is approximately effect the proportional increase of the ageing population double the size of the one in the United States today." has on both the traditional and newer consumer markets; Mosbacher said that the bottom line for a diamond center the need to support and raise awareness among industry like Shanghai, therefore, is to focus on the local consumer and members about consumer confidence issues; and sticking local consumer confidence, similar to New York. to best business principles. Within this framework, Fischler introduced Shanghai and presented the Chinese translation of the IDC Diamond grading rules for diamonds. "We have emphasized Exchange the importance of publishing rules that are open and free for all to consult and use. As such we have recently embarked on a series of translations of which the first is in Chinese,” said Fischler. “These will no doubt contribute to enhancing the trust and comfort level of the Chinese consumer in diamonds and diamond jewellery," he added.

To download the IDC rules in Chinese, click here: http://tinyurl.com/3ahhywr

DIAMOND INTELLIGENCE BRIEFS 6333 DIGGING THE DIRT

De Beers, AngloGold Partner Rio Tinto Confirms Commitment to the in Marine Gold-Mining JV Chinese Diamond Industry De Beers and Johannesburg-based gold exploration company China will play an important role in the long-term sales and AngloGold Ashanti are a third of the way into a joint venture marketing strategy of Rio Tinto’s diamonds portfolio, Jean-Marc agreement, which ends in 2012, to search for gold and other Lieberherr, the miner’s General Manager for the sales and metals off of South Africa’s west coast. The three-year agreement marketing of all diamonds from Rio Tinto's mines, recently said stipulates that while AngloGold provides 40 million in funding, at the 2010 China Diamond Conference in Shanghai. De Beers provides its technology and experience in extracting “Diamonds have a small but important position in Rio Tinto’s diamonds from the sea, reports Business Day. diverse portfolio and attract much attention because of their De Beers Consolidated Mines holds prospecting licenses to growth potential. We see China playing an important role in that search for metals off South Africa’s west coast in water from a growth,” said Lieberherr. depth of 20 meters to 200 meters, the limit at which its underwater To gain more market share in the downstream part of diamond mining technology functions, reports the news source. the pipeline in China, Rio Tinto recently launched a strategic De Beers Marine operates a fleet of ships to explore for and mine partnership with leading Chinese retailer, Chow Tai Fook to diamonds in the sea around the Orange River mouth. develop a fashion jewelry category, separate to the existing In South Africa’s west coast, gold is thought to have washed bridal market in China. into the sea from rivers millions of years ago, and the deposits During his address, Lieberherr highlighted the fact that China covered in sediment. Work has reportedly started in the west has entered a fast growth stage that will change the face of the coast, with geophysical surveys over the prospecting tenements diamond jewelry market, “The emerging middle class demographic to identify drilling targets, Tony Guthrie, De Beers Group Manager in China is an ideal entry point for affordable diamond jewellery. told Business Day. Drilling will start in the first quarter of next year. Increasingly Chinese consumers will be seeking to differentiate According to Guthrie, the joint venture is finding gold, but it themselves through fashion and fashion jewellery and this will be is too soon to tell if the amounts are economically viable. the driver of future growth in retail diamond jewellery demand,” AngloGold was the only company to respond positively out he said. of several approached by De Beers to explore for marine gold, the report says. Meanwhile, De Beers and AngloGold have also established Peregrine Maintains 49 Percent Interest a joint venture to oversee a gold exploration project off the in Chidliak New Zealand coast, where it is believed glaciers scraping down BHP Billiton has elected to maintain a 51 percent participating mountains and into the sea deposited gold along the coast, interest in the Chidliak joint venture with Peregrine Diamonds Ltd. reports Business Day. As a result, Peregrine's ownership in the Chidliak diamond project New Zealand-registered Seafield Resources, part of E. on Baffin Island in Nunavut, Canada, remains at 49 percent, and Oppenheimer & Son International, which owns 40 percent of each partner maintains marketing rights for their pro-rata share De Beers, has been exploring the coast off South Island. of potential future diamond production. The De Beers and AngloGold venture signed a memorandum "Diamond mines can be incredibly profitable, and we are of understanding with Seafield in February to provide 5.9 million pleased to have BHP Billiton as our partner, recognizing that their in funding towards exploration work to earn a stake of Seafield. experience in building and operating the successful Ekati diamond Seafield Director Grant Stubbs told the newspaper that, so mine, also in Canada's north, will benefit Chidliak immensely as far, the results were below expectation. we move the project forward together," says Eric Friedland, Chief Executive Officer of Peregrine. De Beers Marine Vessel To date, 50 kimberlites have been discovered and diamond results have been reported for 24, according to Peregrine. Currently, six kimberlites have coarse diamond populations and are considered to have economic potential in Arctic settings. An aggressive program is planned for the 2011 field season, which is expected to include further investigation of kimberlites with economic potential and comprehensive exploration for more diamondiferous kimberlites.

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JA Calls on U.S. Legislators to Address Needs of Jewelers Jewelers of America (JA) President and Chief Executive Officer Matthew A. Runci recently sent a letter to all 535 lawmakers on Capitol Hill urging them to address the needs of jewelers as the United States Congress decides on measures that could have lasting impacts on jewelry business. Runci sent the letter on November 8, just ahead of the final session of the 111th Congress, which began on November 15. “Jewelers of America members make invaluable contributions to the local, regional and national economy through job creation and financial support of local commerce,” Cyber Monday Sales up 20% wrote Runci. “In most cases, these companies U.S. consumers are showing preference for online holiday have been passed down from generation to shopping with estimates indicating that overall Cyber Monday online generation, earning positions of respect and retail sales grew by 20 percent this year, compared to the same recognition within their communities.” first Monday afterThanksgiving in 2009. More Americans decided In his letter, Runci highlighted several key to shop online than in the stores over this year’s Thanksgiving issues for Congress to consider, including an weekend, according to comScore Inc., which reported that online extension of the Bush tax cuts and a repeal of sales for both Thanksgiving and Black Friday totaled US$1.1 billion, the Estate Tax. He also told legislators to allow up 15 percent from the US$913 million last year. businesses to continue using the LIFO (last in, first As of 6 p.m. Monday, EST, online sales increased 20 percent Matthew Runci out) accounting method, which would hurt many more than they did a year ago, according to I.B.M.’s Coremetircs, jewelry businesses if it were repealed. a research firm that tracks online sales. Moreover,eBay ’s PayPal He closed the letter by noting the huge toll the recession measured an increase of 21 percent of worldwide payment has taken on the U.S. economy and the importance of small volume by 2 p.m. EST, compared to the same time of day last businesses in achieving a full recovery. year, reports the Wall Street Journal. “Websites are getting better at encouraging impulse purchases JA's Political Outreach – once the provenance of physical retailers – through flash- The communication was part of JA’s expanded efforts to sales and other promotions,” says Sucharita Mulpuru, a Forrester influence legislation that can impact jewelers’ businesses. Another Research analyst, who estimates that online retail will grow 16 key component is JAPAC, the Jewelers of America Political percent over the holiday, according to the news source. Action Committee, which made its biggest and most successful contributions to political campaigns during the recent midterm Evolution of Cyber Monday elections. JAPAC contributed to the campaigns of 28 pro-business Cyber Monday, a term coined by the National Retail Federation candidates in tight races looking to be elected or retain their (NRF), was created five years ago to encourage people to shop seats. Of these, 22 candidates went on to win on November 2. online from work, where they could use high-speed internet “JA understands the importance of jewelers’ voices being connection that they lacked at home. However, as broadband heard on Capitol Hill at this critical time,” says Runci. “They can internet connections are more prevalent in U.S. homes, fewer no longer afford to react – after the fact – to legislation which consumers wait to shop until the Monday after the Thanksgiving could severely impact their businesses. That’s why we are doing weekend when they are back in the office. Shop.org, the online everything we can – through JAPAC, through JA’s outreach efforts arm of the NRF, said that the percentage of consumers shopping and by mobilizing our members and the industry at large – to online from work on Monday was expected to drop more than ensure legislators listen to and address our concerns.” one percent to 12.1 percent compared to last year, reports the New York Times. While online shoppers were motivated by Cyber Monday discounts, online shopping seems to be the way forward in general, given that cellphones are increasingly accompanying shoppers into stores for shopping comparisons and online price checks. Coremetrics reports that more than 5 percent of all traffic to retailers’ websites was coming from mobile devices. It was also predicted that 7 percent of people would use their cellphones to shop on Cyber Monday, nearly double than last year.

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Christie’s Hong Kong Fabergé Unveils Sells ‘Perfect Pink’ Diamond New High-End Jewelry Collection for Record $23.2 Million Geneva-based Fabergé is unveiling its second high-end Christie's Jewels: The Hong Kong Sale earned US$78.9 million, jewelry collection since 1917. The all-white-diamond “Le Carnet the highest total ever for a jewelry auction in Asia and the largest de Bal” collection commemorates “the splendour of bygone ever at Christie’s worldwide. The auction’s top sale was the Russian winter celebrations - the banquets, balls and soirées that Perfect Pink, a rare 14.23-carat Fancy Intense were a pivotal feature of St Petersburg society and Fabergé’s Pink rectangular-cut diamond, which sold for world at the turn of the 19th century,” says the company. The Perfect Pink US$23.2 million, making it the most expensive The collection’s name, “Le Carnet de Bal” means dance card, jewel ever sold in Asia. The type IIa, VVS2 which served to record the names and order of the gentlemen diamond sold to an anonymous buyer. with whom a lady had agreed to dance, and also as a memento Another highlight of the November 29th of the ball. auction, which sold 88 percent of the 302 lots Priced at up to US$1 million, the “Le Carnet de Bal” collection offered, included a Golcanda pear-shaped combines tradition and modernity and “draws inspiration from 12.29-carat diamond suspended from a colorless winter themes and works by Peter Carl Fabergé to deliver and pink diamond necklace by Nirav Modi, contemporary interpretations of styles reminiscent of the Belle which sold to a private Asian buyer. A marquise-cut 16.72-carat Époque era,” says a company release. Internally Flawless D-color diamond also earned US$3,114,384 or A special preview of the new collection recently took place US$186,266 per carat to another private Asian buyer. during London’s Russian Week, when Russian art and century-old Fabergé objects are auctioned by Gems Also in Demand Bonhams, Christie’s and Sotheby’s. In addition to diamonds, high demand for rubies and sapphires “The fascination and enthusiasm was also displayed at the auction. An oval-cut 7.04-carat Burmese for our inaugural ‘Les Fabuleuses’ ruby ring brought in US$2,970,128, or US$421,893 per carat, and a collection has been overwhelming, pair of cushion-cut ear pendants, containing a 5.02-carat Burmese and I’m delighted to present this new ruby and a 4.24-carat diamond by Etcetera earned US$2,595,062, collection, particularly so at a time or US$280,000 per carat. A pair of cushion-cut Kashmir sapphire when white diamonds have roundly ear pendants containing 8.74 carats and 8.65 carats fetched demonstrated their resilient value," US$2,032,464, or US$115,000 per carat while a pair of cushion- says Katharina Flohr, Fabergé’s Creative and Managing Director. cut “Royal Blue” Burmese sapphire ear pendants of 17.25 carats The new collection follows the debut fifteen months ago,in and 15.09 carats sold for US$1,383,312, or US$42,700 per carat. September 2009, of Fabergé’s “Les Fabuleuses” collection of multi-colored jewelry creations. London Sale In other company news, Fabergé’s online business model is In other company news, Christie’s recent sale in London, being extended to include a new iPhone application. The service which offered royal, aristocratic and historic jewels, fetched offers users the ability to “try it on now” by superimposing items US$19,592,861. The sale, which took place on December 1, sold from the collection onto the hands or body of the user via the 253 of the 338 lots offered. International clients from 26 countries iPhone’s built in camera. In addition, the application provides competed throughout the auction, in the room, on Christie’s Live zoom, and allows users to call a sales advisor at the touch of and with over 100 registered telephone bidders, according to the screen. the auction house. The top lot was a 9.20-carat Burmese ruby ring, which sold forUS$3,375,353 or US$366,000 Tiffany & Co. Opens in Barcelona Tiffany & Co. has opened a new store location in Barcelona, at the city’s per carat to an anonymous buyer. Mandarin Oriental Hotel, located at Paseo de Gracia 38-40, in the city’s premier “The Property from the Portland Collection shopping area. The new 360-square-meter, three-level store is Tiffany’s second exemplifies an extremely rare group of in Spain, and follows the fall 2008 opening of a store in Madrid. ancestral jewels offered directly to the market “Tiffany is achieving strong growth throughout Europe, and there is for the first time. Sparking fierce competition, substantial long-term expansion potential,” says Melvyn Kirtley, group vice these lots tripled their pre-sale estimate, selling president, Tiffany & Co. Europe. The store’s diamond engagement rings 100% and achieving £8,651,350,” according include a new collection of rare and color-saturated yellow diamond jewelry. to Keith Penton, Head of Jewels, Christie’s London.

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Sotheby’s Sale of Duchess of Windsor Gems Earns $12.6 Million Sotheby’s recent auction in London earned US$12,577,900 (£7,975,550) for jewels and precious objects that were formerly in the collection of the Duchess of Windsor, the American divorcee Wallis Simpson whose husband, Edward VIII, gave up his rights to the throne of England in 1936 to marry her. Twenty lots were sold, including several custom-made pieces engraved with personal messages and composed mostly of modern and contemporary jewels by designers and houses including Suzanne Belperron, David Webb, Van Cleef & Arpels and Cartier. These jewels were often created specifically for the Duchess, sometimes using gems from the Duke's collection, according to Cartier’s archives.

Sale Highlights Duchess of The highest earner of the evening was the onyx and panther bracelet, designed Windsor's Diamond by Cartier Paris in 1952, which fetched US$7,130,280 (£4,521,250). It is pavé-set with Flamingo Clip brilliant- and single-cut diamonds and calibré-cut onyx. The eyes are each set with a marquise-shaped emerald. The bracelet divides in two places, under the head and in the center of the back. This particular onyx and diamond bracelet in the form of an outstretched panther was purchased from Cartier in December 1952; the sale is recorded unusually as being by the Duchess herself, according to Sotheby’s. The auction’s next highest earner was the ruby, sapphire, emerald, citrine and diamond flamingo clip, mounted by Cartier, Paris, 1940, which brought in US$2,714,510 (£1,721,250). Designed as a flamingo in a characteristic pose, the plumage set with calibré-cut emeralds, rubies and sapphires. The beak is set with a cabochon citrine and sapphire, while the eye is set with a similarly cut sapphire. The head, neck, body and hinged legs are pavé-set with circular-, brilliant- and single-cut diamonds. According to Cartier, in order to make this jewel, the Duchess had several of her own pieces unmounted so that the stones could be re-used in this clip; jewels used included a necklace and four bracelets to supply the 42 calibré-cut rubies, the same number of sapphires and emeralds and 102 diamonds that make up this piece. The Duchess of Windsor is known to have worn this brooch soon after acquiring it, when she is photographed with the Duke wearing it as they arrived at the Ritz Hotel, Madrid, on his forty-sixth birthday on 23rd June 1940, says Sotheby’s. Among the collection pieces sold were also the duke’s cuff links and military medals, a silver, gem-set and enamel picture frame circa 1900, a Cartier gold coin watch circa 1940, silver and gold cigarette cases, jeweled dress buttons and an emerald, ruby and diamond heart-shaped brooch. The piece was commissioned by the Duke to commemorate the Duke and Duchess of Windsor's Twentieth Wedding Anniversary. This jewel was composed of gems un-set from other pieces belonging to the Duke.

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