Indian companies join forces to source diamonds

Posted August 24, 2010 |

Australia is set to benefit if a new Indian diamond consortium of 200 companies is successful.

More than 200 Indian diamantaires in Surat, Gujarat, have teamed up to form a diamond consortium that will source rough stones directly from mines in Australia, Africa, Russia and Canada.

The move will be seen as direct opposition to big companies such as De Beers, Rio Tinto, Alrosa and BHP Billiton who have traditionally been the sole suppliers to Indian diamond traders.

Between them, these four companies supply approximately 70 to 75 per cent of the world’s rough diamonds.

According to an Idex report, the big diamond suppliers have few direct clients, leaving the rest of the diamond manufacturers in fierce competition for rough diamonds in the secondary market. Diamond manufacturers often pay a premium of 20 per cent or more for the rough diamonds.

Antwerp’s position as the world’s capital for sourcing rough stones is also likely to be challenged by the formation of the Surat Diamond Sourcing consortium, according to Asit Mehta, who chairs Blue Star Diamonds – one of the biggest diamond manufacturers and distributors in the world, which is a member of the new sourcing group.

Speaking to Mineweb.com he said, “Despite Surat being a hub of diamond polishing and cutting, most of the traders have to rely on Antwerp and Dubai for sourcing roughs. In several cases, traders have complained of being cheated by brokers… which becomes persistent when there is a shortage of roughs in the global markets.”

The newly formed sourcing consortium would reportedly combat the shortages, irregular supply and unstable prices of diamonds. It is set to open buying offices in diamond producing countries such as South Africa, Botswana, Namibia, Tanzania and Zimbabwe.

Other big companies to have joined the venture include Venus Jewels and Lakshmi Diamonds.

India’s first jewellery week a hit
India may be internationally known for its diamonds but in an effort to promote its other jewellery, the country launched its first ever jewellery week on August 15.

More than 30 designers from all over India displayed their high-end jewellery in the inaugural five-day event in Mumbai, which was launched to revitalise the country’s “Made in India” marketing strapline.

Vasant Mehta, chairperson of the event organiser Gem and Jewellery Export Promotion Council of India told the Indo-Asian News Service, “Be it retailers or consumers, they don’t like the ‘Made in India’ tag when it comes to jewellery. Through this event, we wanted to change this perception. We believe we have succeeded in doing [that].”

Mehta added that the jewellery week was designed to disprove the global perception that India only sells mass-produced and medium range jewellery, especially in European markets where high-end jewellery is popular.