Rapaport Magazine - February 2021

VOL. 44 NO.2 FEBRUARY 2021

LAW OF THE LAND It’s time to legitimize the artisanal mining sector — for the people on the ground, and for the good of our industry

OP INI O N

R E P O RT

ST YLE

GE M STO NE

HOW EMBRACING THE CIRCULAR ECONOMY CAN BENEFIT THE DIAMOND TRADE

AN IN-DEPTH LOOK AT CHINA’S JEWELRY MARKET, WHICH HAS GROWN DESPITE THE PANDEMIC

PEARL NECKLACES ARE TOPPING WISH LISTS AS A GENDER-FLUID FASHION STATEMENT

MEET THE NIGERIAN BUSINESSWOMAN PROMOTING AFRICAN GEMS AND TALENT

CONT E NTS

40 PAGE

VOL. 44 NO. 2 FEBRUARY 2021

past year, and what are its prospects for growth?

8 NEWS

24 REFLECTIONS

LVMH welcomes new acquisition; De Beers shakes up client list.

Fancy-white diamonds owe their opalescent shimmer to micro-inclusions and are driving designers to scour the globe for specimens.

12 OPINION How circular-economy principles can deliver benefits for the industry.

RETAIL

26 RETAIL PROFILE

COVER

14 COVER STORY Illegal artisanal miners often risk their lives to eke out a living, but diamond-rich countries can benefit from decriminalizing the sector.

18 REPORT China is one of the largest diamond and jewelry markets in the world. How well has it weathered the crises of the

At almost 100 years old, London Jewelers in Long Island and Manhattan is a four-generation success story.

28 RETAILRAP As e-commerce gains momentum, jeweler Esther Fortunoff explains the pluses and pitfalls of ditching brickand-mortar.

STYLE & DESIGN

30 JEWELRY

CONNOISSEUR

Discreet yet bold, cuff bracelets can make a powerful statement.

32 STYLE Pearl necklaces are having a renaissance thanks to edgier designs targeting both women and men.

36 INTERVIEW The Connect Agency has successfully shifted its physical showroom to a digital platform, creating new opportunities for its designers.

38 DESIGNER

32 PAGE

Fourth-generation diamantaire Harakh Mehta draws on childhood memories and national symbols to fashion evocative high jewelry.

MARKETS & PRICING 47 TRADE REPORT US, China stabilize.

40 LEGACY

48 USA

Two new books and an upcoming exhibition showcase the groundbreaking creations of the 1960s and 1970s.

52 INDIA

43 ESTATE JEWELS

55 HONG KONG

Dealer Benjamin Macklowe offers advice on stocking and selling brooches.

56 DIAMOND DATA

44 COLORED

53 ISRAEL 54 ANTWERP

61 PRICE LIST 73 RAPNET PRICE LIST

GEMSTONE

Activist and entrepreneur Amina Okpukpara is devoted to championing gems and talent from her native Nigeria and other African countries.

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82 DIRECTORY 86 CALENDAR 88 THE FINAL CUT

IMAGES: THE ESTATE OF JACQUES LOWE/GETTY IMAGES; TONY WALSH/CINCINNATI ART MUSEUM. FRONT COVER: DDI@RESOLVE

IN-DEPTH

N OTE FROM TH E P U B L I SHE R DON’T GET LEFT BEHIND

B John Costello PUBLISHER

IMAGE: BEN KELMER

J O H N .COST E L LO @ D IA M ON DS.NET

ack in September 2018, Rapaport Magazine’s cover story was entitled “Flipping the switch.” It focused on an impending industry tipping point that companies would need to embrace to ensure their future was a bright one. This tipping point was represented by three “lightbulb moments” — demographics, digital and disclosure.

All are still critically important to understand and navigate.

In the time of the coronavirus, however, one of them is now more important for survival than ever.

If digital technology is not at the core of your business, the facts are clear: Your company is not well-placed to succeed in the future. This is as true for mom-and-pop jewelry stores as it is for diamond dealers, manufacturers and miners. Yet it is important to understand what having “technology at the core of your business” means.

In truth, the mining and manufacturing sectors have been adopting cutting-edge technological solutions for some time.

From the exploration of mines to the cutting of diamonds, digital tools play a key role. As we move along the pipeline to the dealers and retailers, though, many in our industry could be considered laggards on the digital front. But having technology at the core of your company can be as simple as having an Instagram account. It does not have to be complicated, it just has to add value, and reach beyond bricks and mortar.

The pandemic has seen those who embrace technology survive and even thrive. Those who haven’t adopted such tools have, by and large, been hit harder over the past year.

To help companies understand what technology can mean for their business, Rapaport has developed a series of podcasts, kindly sponsored by Sarine. The episodes look at practical examples of technology’s importance throughout our industry, but more specifically in the diamond journey, diamond grading and the reinvention of retail.

By visiting info.diamonds.net/tech-podcast, you can listen to them all or choose the ones most relevant to your business. As always, any feedback will be warmly received.

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FEBRUARY 2021 7

COVER

L AW AND ORDER

L AW A N D O R D E R Illegal artisanal miners often risk their lives to eke out a living, but diamond-rich countries can benefit from decriminalizing the sector.

B Y L E A H M E I R OV I C H

Illegal artisanal miners often risk their lives to eke out a living, but diamond-rich countries can benefit from decriminalizing the sector.

B Y L E A H M E I R OV I C H

T

he African media is rife with stories of illicit artisanal and small-scale miners (ASM) being shot by officials, chased by guard dogs, and brutally killed on diamond fields while trying to find a means to support their families. Granted, the miners’ actions are against the law, but these largely uneducated, desperate and poverty-stricken individuals are willing to take the risk in order to secure an income. They have no other training, their skills are limited, and the career market is hardly ripe with opportunities.

Even more disturbing is that many of the mining sites on which ASM workers trespass lie fallow. The large-scale mining operations that own the property have already picked over and plundered the grounds, and the small number of carats that remain are not economically viable for big companies to remove.

“Conflict arises between artisanal…and large-scale miners when, for example, [the latter] leaves a site, and then small-scale miners move in to go through the tailings,” says Ian Rowe, director of DDI@Resolve — a responsible-sourcing program established last July when the Diamond Development Initiative (DDI) merged with the nongovernmental organization (NGO) Resolve.

“Large-scale miners still have ownership of the operation, and more often than not, they [aren’t] happy to see increasing numbers of artisanal miners come in to clean up after them.”

In countries that contain a large number of impoverished communities, allowing artisanal mining would seem like an ideal way to let its citizens make a living. So why aren’t more governments legalizing the sector?

IMAGE: DDI@RESOLVE

The weight of stigma

Artisanal miners in Sierra Leone.

Artisanal mining of various minerals supports more than 44 million people worldwide, according to Delve, a global ASM data platform that American NGO Pact and the World Bank have developed. Of that number, approximately 1.5 million people earn their living from diamond mining, says Feriel Zerouki, senior vice president of international relations and ethical initiatives at De Beers.

Zerouki is also general manager of De Beers’ GemFair sourcing program, which helps ASM workers operate ethically and secures a route to market for their goods. The problem, she believes, is that the ASM sector suffers from the stigma of its connection with human-rights abuses and child labor.

“Legal recognition is the first step toward using the artisanal mining sector as a force for good, and a force for development,” she asserts. “But the artisanal mining sector has been stigmatized in the past. Many people feel that it’s a story of despair, when it’s not. I think, personally, it’s a huge story of development. It’s a livelihood issue.”

However, sometimes the reasons governments won’t legalize the sector are less obvious, and more difficult to solve. Because many artisanal miners are from poor towns, they don’t have access to proper education. This means governments need to set up programs to teach them how to register properly, obtain a license, and mine economically, while also staying abreast of the oversight and reporting necessary to secure Kimberley Process (KP) approval so their diamonds can travel through legal export channels to premium markets like the US and China. ▶ DIAMONDS.NET

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Artisanal diamond miner working with GemFair in Sierra Leone.

“You can create an employment structure where the companies are, in essence, paying the small-scale miners to do the work they can no longer do” In Sierra Leone, one of the countries where GemFair operates, artisanal mining has been legal since 2009, but there are often issues with large mining companies.

“We ask large-scale miners to encourage artisanal miners to operate within their concession,” says Mohamed Gaima, regional manager at the country’s National Minerals Agency.

“But we have some instances where we have licenses issued to big companies, and some of them will not give us the permission to legally issue artisanal mining licenses within their concession.”

Outside forces can also have an impact on the sector. In Lesotho, artisanal mining had been legal since the 1950s, but the country prohibited it in 2004 for environmental reasons.

Lesotho has a program through which it sells approximately 18,000 liters of water per second to neighboring South Africa, explains Lesotho mining commissioner Pheello Tjatja, and the practices associated with artisanal mining were leading to water pollution.

“That was the main reason for illegalizing artisanal mining,” he asserts. “At the time, we were not very clued up on environmental controls as a country. But now, with the mining and environmental expertise we have in the ministry, and [the] new environmental laws we [have] introduced, we think we can solve the problems we had before.”

Turning the tide

In November, Lesotho took its first steps toward repealing the prohibition by passing the diamond amnesty law, which allows artisanal miners who have obtained diamonds illegally to declare them to the government without repercussions.

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“We determined that if we reintroduced diamond digging while people still have [illegal] diamonds in their hands, they are going to pretend that they mined them from the new deposits that we intend to allocate them, which will skew our numbers and distort our diamond data,” Tjatja says.

GemFair, which is already well-established and making great strides in Sierra Leone, plans to expand its reach to Guinea, Liberia and the Ivory Coast, while DDI@Resolve is working to legalize mining in the Democratic Republic of Congo.

However, with artisanal mining still prohibited in diamondrich countries such as Angola, Zimbabwe and South Africa, the question is whether it is feasible for all nations to legalize the practice. Are the methods of the Sierra Leone and Lesotho governments, GemFair, DDI@Resolve and other organizations exportable as a whole?

Rowe believes the answer is yes. It is both possible and desirable to establish a formal system in all of these locations, he says, because of the “advantages it offers not only to artisanal miners, but also to large-scale miners and…governments in terms of reducing conflict, putting in place safe labor practices, avoiding environmental degradation and minimizing criminality. These are all key.”

No simple task

Unfortunately, the road to legalizing artisanal mining is complex and often fraught with difficulties that governments must address first.

“The steps are, I think, very straightforward in terms of what we need to see happen, but they’re more complicated in their execution,” states Rowe.

To begin with, governments need to establish a system that provides these miners with legal standing, he says. This will give them access to the standard rights of any citizen in terms of fair wages, labor, and on-site health and safety, as well as ensuring basic human rights.

In addition, he argues, countries should have a structure in place to formalize the mining process itself, since the regulations and requirements are often prohibitive to ASM workers. In most cases, they don’t have the resources to conduct site evaluations, institute safety requirements and purchase the proper mining licenses to support their operations.

“These are all elements [that] are accessible to large-scale miners, but obviously people that are living on the poverty line [are] never going to be able to meet these criteria,” stresses Rowe.

Problems persist even in Sierra Leone, which has been consistently fine-tuning its artisanal mining sector over the past decade. The sector — which comprised about 1,600 workers in 2019 and accounted for approximately 52% of the country’s rough diamonds in 2016, according to Gaima — is highly dependent on parties known as “supporters.” About 70% of the country’s artisanal miners received full financing from these informal backers, Zerouki claims; of those, 73% repay their debt to their supporters in diamonds.

“This basically creates a situation where the supporters, not the miners, determine the price of a diamond,” she says. “I’m not saying all supporters act this way, but it’s obviously in their interest to depress that price and keep the miner in debt and indebted to them [for] as long as possible.

This cycle of dependency and debt creates knock-on effects, but the support is critically important for the [artisanal miners] to remain employed, to feed their families, and to provide the baseline securities that we all take for granted.”

regulations, you allow it to contribute to your country’s economy.

It’s hard to tax something [that] technically doesn’t exist.”

Furthermore, governments that don’t monitor their artisanal mining communities are not aware of how much they are losing because of illicit operations, suggests Gaima. Decriminalizing the sector has enabled Sierra Leone to eliminate much of its black market — a move Lesotho is now working to replicate with its own 200 artisanal miners — and to empower its citizens to improve their circumstances.

“Once diamonds have been exported, the [Sierra Leonean] government takes a royalty from the proceeds,” Gaima continues. “It then gives a portion of that royalty back to the communities in which the artisanal mining was performed, known as the Diamond Area Community Development Fund.”

That money, which is one of the main sources of revenue for artisanal diamond mining communities, goes toward building up the towns and bringing them out of poverty. “Now, when you go to these communities, you can see structures like community health posts, schools that have been updated and rehabilitated, a community hall and multipurpose center — all constructed using those funds.”

“Many people feel [the sector is] a story of despair, when it’s not.

I think, personally, it’s a huge story of development”

IMAGE: DE BEERS

Reaping the benefits

The drawbacks of legalizing artisanal mining are minor compared to the potential advantages governments can gain. To begin with, says Rowe, the move would not only help eliminate conflict between large-scale and artisanal miners, but create a symbiotic relationship.

“Once large-scale miners leave large mines because their machinery no longer picks up enough rough to justify the investment, you can create an employment structure where the companies are, in essence, paying the small-scale miners to do the work they can no longer do,” he explains. “That creates a system which is less about people coming into your house and stealing than it is about you paying to have people come in and do the work you are not able to do.”

Another major plus of decriminalizing artisanal mining is that it would curb black-market diamond selling and smuggling. Not only is this a condition for receiving KP approval, it is a way to increase overall revenue for both countries and governments.

“If it’s not legal, [that’s] a whole sector [a government] can’t count as part of the overall country economy,” points out Rowe.

“By formalizing it and putting in legal structures, rules and

A route to transparency

The ability to monitor the flow of artisanally mined diamonds reaches beyond the black market, the KP, and even taxes and royalties.

“With legality and formalization comes transparency and increased accountability, and this is all facilitated by the government’s capacity to monitor what’s happening in terms of the mining industry,” notes Rowe. “Governments, [the] private sector and other stakeholders involved in the supply chain have become more aware of the importance of ensuring that the diamonds passing through their hands have passed through an accountable and responsible system.”

Traceability for rough diamonds is an issue Sierra Leone is currently working to clear up.

“There are several challenges in terms of traceability,” says Gaima. “We definitely report more in terms of the exports compared to what we get from the pits. So what we are now trying to do with our new mining law, which will come into effect early this year, is to form cooperatives, because that will make it easier to supervise operations and provide more traceability — something [that] is very important to us right now.”

Zerouki agrees, asserting that the ability to decisively identify stones’ provenance is extremely important for the future of the diamond industry.

Those who don’t think about it or work to achieve it will find themselves at a disadvantage when it comes to selling their diamonds overseas in the near future, warns Rowe, citing the public’s increasing interest in transparency when it comes to the provenance of diamonds. “People have options now. They have the option of lab-grown, and they also have the option of a natural diamond that can be traced all the way to its point of origin…. Governments that choose to ignore that, I think, are probably doing [themselves a] disservice.” ◼ DIAMONDS.NET

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R E TA I L R A P

O T N IO IT S N A R T O T W HO

ONLINE ONLY As e-commerce gains momentum, jeweler Esther Fortunoff explains the pluses and pitfalls of ditching brick-and-mortar.

B Y L E A H M E I R OV I C H

contact with other people, and younger people seem to like to be left alone. There are parts of the store experience that not everyone loves, and it seems more and more people enjoy browsing online or researching online and then making a decision. So it was a decision I made for a lot of different reasons — not really because of Covid-19, but certainly that helped it along the way. People seem to like looking at the images and being able to go at their own pace, and then they will often go into the chat feature on the site and ask a question, or call, or send an email.

Did you see your online sales growing more rapidly than in-store sales?

Yes, they have been. I mean, there’s no question that this past year, our online sales grew a lot, and in-store didn’t. But even before Covid-19, our online sales were growing faster than in-store, so the theme I would say is: “Follow the customers and embrace the next thing that people really want.”

E

sther Fortunoff’s store has been through a lot in the nearly 100 years it’s been in business. Her grandparents Max and Clara Fortunoff opened the shop in 1922 as a New York-based housewares store, but it segued to include jewelry in 1957. In 2005, the family sold the majority share in the then-20-store Fortunoff chain to two privateequity firms, which filed for Chapter 11 a few years later. That led Esther and her brother David to reacquire the business and relaunch it online as Fortunoffjewelry.com.

It remained an e-commerce venture until 2014, when she opened a boutique in Westbury, New York, in response to customer demand to touch and see the product. Now she has taken the store back to its digital roots, closing the physical location at the beginning of January. Here, she explains the reasons behind the move.

What made you decide to move back to an online-only format?

It seems that customers these days really prefer that in a sense.

Not everyone loves to have to go to a store and be there in close 28 FEBRUARY 2021

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In 2014, you told National Jeweler that your customers were clamoring for you to come back to having a physical store, saying e-commerce wasn’t good enough. How have things changed?

Good question. I think there are still people who really want to shop in a physical store, so I can’t say that all those people have changed their minds, because that wouldn’t be the case. But a lot of those people who prefer shopping in a physical store may not be at the time of their life where they’re buying much jewelry.

We certainly cater to a middle-to-older customer, and a lot of those people really do like being in the store, but what I’ve noticed is, over the past six years, certainly in the past two years, even the older customers would pre-shop online. And luckily, we have a trustworthy brand that in certain cases people have grown up with their whole lives, and so it seems they can make that leap from [pre-]shopping online to being comfortable buying online.

For those who don’t want to shop online, or who like to pre-shop online but buy in-store, how will you fulfill their desire to see and touch the jewelry?

I think that in certain cases, we’ll find a way to meet in person by appointment. In other cases, I will probably do some pop-ups where people who must see a live piece in person can schedule or just come in. I also may be able to collaborate with another store

and set up some merchandise in that store. But already, people are making appointments where I will be able to meet them in a safe space and be able to help them with a big purchase like an engagement ring.

time. Others took the opportunity to retire. But I feel like everyone who works for me wears several hats, and so certainly we will have to train to become more tech-savvy. But all of us will be in learning mode and will learn new things.

Have you updated your website to accommodate the shift to online-only sales?

We have instituted a more robust chat feature, and we’re trying to schedule more Zoom calls with people, but the website itself is always changing. I’m trying to update it and add models so the jewelry is featured on people [and so] customers can get a sense of scale, because it’s hard to understand dimensions or how something might look without seeing it on a person.

Now that you don’t have a physical location, where do you intend to keep all your stock?

I’m renting out some warehouse space, and I have a safe-deposit box. I don’t want to turn into a website that only [sources goods to fill] customer orders.

“Not everyone loves... to go to a store and be there in close contact with other people, and younger people seem to like to be left alone”

What were the most challenging aspects of moving fully online?

Well, we were actually fortunate, because we were a pioneer in going online back in the ’90s. Our basic challenges were just photographing every item, describing them and merchandising them in a way that people would find interesting.

There are a lot of sites where you can see a ton of merchandise, but that’s not really what we are about. We have a different aesthetic, with a curated selection of jewelry from all over the world. We’re more about telling a story, putting it together the way a customer would wear it, sort of like Ikea. I’d rather see the way the room is set up than just a million couches.

What practical steps did you have to take to close your store? Did you face any unexpected issues?

We didn’t have any issues with suppliers. They all understood and are supportive and wishing us well. Our biggest issue was with customers who still wanted the physical store and were not only unhappy, but angry and upset.

That was really grounding.

What did the change mean for your staff?

Most of my staff will continue working with me — in certain cases, part

How do you feel about not being in direct contact with your customers?

That’s probably the hardest part, in a way.

But I feel like we will be in touch. I mean, even just in the past week, I’ve been interacting with customers who want a special gift. I think between email, phone, the website [and] Zoom, it’s not so hard to be in touch with people. Certainly it’s different, and there has to be some planning involved, but in the current world, you can stay in touch with people pretty easily.

What new opportunities has Fortunoffjewelry.com opened up for you?

The main opportunities are those for collaboration, perhaps with designers. I’m also interested in art, and I have friends who are photographers and sculptors, and I know someone who has a beautiful line of books that she produces. There may be a different way to have more than one point of view on the website, possibly showing things that are not jewelry, but I’m still exploring that.

Do you think online is the future of retail?

It is certainly going to be a bigger part of the pie. I’m hoping that people will be able to get together and meet in the future, but I do think this is going to be a permanent change. I think this [pandemic] has changed people’s habits for the foreseeable future, because people will have adapted to using online. ◼

Vintage diamond bands available on Fortunoffjewelry.com.

Opposite: Esther Fortunoff (left) in the Westbury store.

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THE FINAL CUT

See how she thrives Rapaport Magazine asks two diamond dealers about the challenges and opportunities of being a woman in the industry.

B Y L E A H M E I R OV I C H

MICHAL AMRAM FOUNDER OF S.T. AMRAM

SIDSEL DALBY GLERUP FOUNDER OF DALBY DIAMONDS

Why did you choose to work in the diamond industry?

Why did you choose to work in the diamond industry?

Given my background, it was easier for me to open doors, since my family has a good name in the market. Once you have made it past those doors, it is entirely up to you to be able to work passionately, diligently and true to your words. Since I started my own company, S.T. Amram (today Mia Masterpiece), in 2012, it has been a constant [process of] growth and a daily commitment to showing both suppliers and customers that they can count on me personally and professionally.

I came to the business on my own, with no heritage and no connections.

I grew up on a countryside farm in Denmark, and as a marketing graduate, my career was already gaining momentum at companies like Microsoft and British American Tobacco. At my last job within the gold industry, I evolved my already great passion for diamonds and precious stones. After the completion of my graduate gemologist education [at the Gemological Institute of America (GIA)], I founded my company, Dalby Diamonds, in 2013.

Is there a specific feminine touch you add to the business in this male-dominated environment?

What makes you enjoy dealing with diamonds, as opposed to designing?

I would say a softness. I am sure that by being gentle and feminine I have achieved more than I would think. At the beginning of my path, I was dressing very conservatively and acting very rigid to put up boundaries, given the fact that I was a very young woman in an older, macho, male-dominated reality. Through the years, and by getting to know people, I was able to be my true self, which is so beautiful.

The technical knowledge is the primary reason for my success: As a gemologist, I might have a geek’s approach towards my profession, and it is my actual great passion for diamonds and precious stones that makes it fun to work 60 hours a week.

How did you make your mark?

Have you ever faced discrimination or felt slighted?

Dealers would think, given my young age, that I would not be up to date with market trends and prices, until I left them surprised. Brokers used to come into my family office. They would ask, “Where is the buyer?” And I would smile and say, “I’m the buyer.” Their surprised face was so amusing.

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Have you noticed any positive changes in the industry — in general and in relation to being a woman?

You are born into this industry, and furthermore you should be a man — two criteria I hardly live up to. In the beginning, I met with a lot of skepticism from established traders, but I have since gained their respect by showing persistence and proving my insights into the industry, along with my technical knowledge of precious stones. Today I see myself as a part of the “family.”

Have you ever faced discrimination or felt slighted?

Not really — maybe because I’m kind of a tomboy.

I used to play with cars as a child. I’ve been trained to hunt by shotgun and rifle, since I was born and raised in the countryside. I also act very straightforward in my communication. Some might perceive me as rude, but I have experienced that it goes hand in hand with the [culture] in the diamond industry.

IMAGES: SHUTTERSTOCK

I am a second-generation diamantaire; my father, Zvi Amram, is vice president of the Diamond Bourse of Italy. [I grew up] surrounded by diamonds, precious stones and pearls, and learning the fascinating behind-the-scenes stories of these rare natural beauties.