Weakness crept into the diamond market in August 2011. 2012, the year that followed, proved to be filled with notable changes and challenges, some of which will continue to have an impact in 2013.
When police moved on the Israeli Diamond Exchange in January and made over a dozen arrests connected with money laundering, illegal foreign exchange and unlawful loans, it was perhaps an indication that the industry was in for an eventful year.
Later, hundreds of synthetic CVD diamonds were produced without the required inscriptions, sold without the required disclosures and turned up in laboratories to be certified as natural diamonds. This event served as a reminder that CVD diamonds cannot be identified even by seasoned diamond traders. It also prompted renewed concern about the effects that synthetic diamond sales could have on consumer confidence.
However, not all the activity that garnered attention was illicit in nature. Also generating headlines in 2012 were notable shifts in the dynamics of the diamond industry.
These include the $5.1-billion
of the Oppenhemier stake in De Beers. The deal, announced in 2011 but completed in August 2012, marked the family's exit from a business with which its name was associated for nearly decade.
Later came the announcement that Rio Tinto (NYSE:
,LSE:RIO,ASX:RIO) planned to sell the Ekati mine to Harry Winston (NYSE:HWD) for $500 million. This deal, upon closing, will result in Rio Tinto also bidding farewell to the diamond business.
De Beers also created a buzz when it began executing a plan to shift certain segments of its operations from London to Botswana. Last year, the company focused mainly on moving sorting operations. In 2013, De Beers will begin hosting diamond sights in Botswana.