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"The flow of diamond buyers from Asia is growing"

Have diamond auctions in Vladivostok become part of a full-fledged "diamond exchange", EastRussia found out

At the end of August, Vladivostok, where the Eurasian Diamond Center (EAC) opened with the participation of the Russian diamond mining company ALROSA for two years, hosted the Asian Summit of the World Federation of Diamond Bourses of the Asia-Pacific Region. The event, held in Russia for the first time, was a kind of confirmation of the appearance of another point on the world "diamond map." The director of the ALROSA branch, Semyon Lavrentiev, says that one of the main issues discussed at the summit concerned the protection of jewelry consumers in connection with the possible penetration of synthetic diamonds into the natural diamond market: technologies have reached such a level that a layman cannot distinguish them from each other without special equipment in the laboratory.

Photo: Diamond Technology and Gemology Center
Special project TORA and Free Port
- What threatens the diamond industry with the increasing distribution of synthetic diamonds?

- Every year the jewelry "synthetics" becomes more. Producers represent it as an environmentally friendly product, the production of which excludes interference with nature and hard human labor. But this is a very one-sided view. The technology of production of artificial diamonds is extremely energy-intensive, and in fact expanded energy production is one of the most adverse sources of influence on the environment and humans.

But the main danger lies in the fact that the end user - a regular customer in an ordinary jewelry store - can be misled. We understand that the right of every person is to decide whether to buy a real or synthetic diamond. And legislation aimed at protecting consumers in many countries, including ours, requires disclosure of information about the origin of a diamond in a piece of jewelry. At the same time, according to the Center for Strategic Projects and Analytics of ALROSA, only every fifth artificially grown diamond is currently being declared.

Manufacturers are actively engaged in the problem of information disclosure for the end user. For example, in September, the Ministry of Finance, Goznak and the Assay Chamber presented a mobile application developed jointly with jewelers, which will allow anyone to get reliable information about the characteristics of jewelry and precious stones using the QR code on the jewelry tag. Now is the process of testing the application. Our company is one of the 20 participants in the experiment.

In addition, ALROSA, together with scientists, for the first time in Russia, developed a portable detector that allows identifying diamonds of natural and synthetic origin. Perhaps soon it will appear in stores, and then the authenticity of diamonds can be checked before buying them.

“Despite the existing competition, this year alone, ALROSA held several international auctions for the sale of special-sized diamonds at the site of the Eurasian Diamond Center in Vladivostok. If auctions for such a specific product are conducted with a similar intensity, then there is a demand?

- It was the third auction of the year, another one is scheduled for the end of October. Three more passed last year.

Diamonds of special sizes are large stones from 10,8 carat and higher. For example, stones weighing more than 100 carats were put up for sale. To make it clear - such stones reach 3-4 centimeters in diameter, although this is very conditional - the nature of the diamond is such that all the stones are completely different: each has its own shape, color, and visual perception.

In September, more than 100 stones were sold for a total of $ 12,6 million. Participated 76 companies from Israel, Belgium, China, India and even the United States. 

Buyers are different. There are those who take goods for resale, but most of them are manufacturers of diamonds, companies that are engaged in diamond cutting.

The site in Vladivostok was created to search for new customers, to expand the geography of sales. Taking into account the actively developing jewelry and cutting industries in the neighboring Celestial Empire, and in this our calculation was justified - the flow of customers from Hong Kong and mainland China is constantly increasing. And they say that it is convenient for them to come to Vladivostok.

- How are the auctions?

- No auctioneers, hammer blows, “sold out” shouts. Along with the invitation to participate, buyers receive a specification that lists the weight and initial cost of each stone. Within a certain time, usually two weeks, experts from participating companies come to view and evaluate the goods. The product is expensive: it is from such diamonds that large diamonds are obtained. So before you make a choice regarding the acquisition of a stone, you need to understand what can be obtained from it as a result.

A man from the street cannot come and see diamonds. Each participant on our electronic trading platform has a personal account, where, having decided on a choice, he makes bets. Then the electronic system selects the best offer and determines the winner.

In Vladivostok, we also sell smaller natural diamonds. From stones that have similar characteristics - quality or color - collect boxes that show customers, and then sell.  

- The Diamond Exchange in Vladivostok is a young venue, is it able to compete with large and well-known centers located in Belgium, Israel, the United Arab Emirates, and India?

- First, I would not use the term "diamond exchange". It implies a platform where both sellers and buyers can enter. They can find each other and make deals. On the trading floor in Vladivostok, only ALROSA is trading in raw materials.

Secondly, ALROSA exhibits its products in all the world's major diamond centers, and often the biddings take place there simultaneously. Customers who come to Vladivostok participate in tenders in Antwerp, Hong Kong, Dubai, Mumbai, New York. They have a choice. But the diamond business is so specific that buyers are ready to come to anywhere in the world where there is a product of interest. So, it’s probably not entirely correct to talk about the competition of trading platforms.

- When creating the EAC, it was said that it should become a trading platform for the whole “diamond cluster”. How is the process of its creation?

- Today we already have one long-term buyer of diamonds from Vladivostok. Russian company KGC DV, a member of the Indian diamond group KGK, became a resident of the free port a year ago and launched a modern cutting enterprise. In accordance with the three-year prisoner between us, we provide them with a certain amount of raw materials on a regular basis. Additionally, DVG KGC can participate in tenders and auctions on a general basis. Now, another large foreign company is engaged in arranging its plant in Vladivostok, while the other is preparing documentation. So there is definitely movement. And prospects too.
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