Friday 18th October 2019

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Posts tagged ‘india’

Rate cuts, bubble-like stock valuations and possible QE with “new non-traditional” interventions look good for gold: WGC

July 11th, 2019

by Greg Klein | July 11, 2019

Some recent dips below $1,400 notwithstanding, yellow metal’s forecast looks positive for the next six to 12 months, according to the World Gold Council. While long-term performance depends on jewelry, technology and savings, shorter-term prices respond to other factors that the WGC considers positive for its favourite element.

Chief among them are interest rates, reflecting an about-face in global monetary policy. Less than a year ago the U.S. Federal Reserve and investors alike expected continued rate increases, the council stated. “Now, the market expects the Fed to cut rates two or three times before the end of the year. And while statements by board members, including Chairman Powell, are signaling a wait-and-see approach, the market has barely changed its forecast. The Fed may not do what the market asks, but it generally doesn’t like to surprise it either.”

The WGC expects Europe’s and Japan’s central banks to follow suit in a global environment of competing tariffs, U.S.-Iran conflict and the ever-looming Brexit. But, the WGC emphasizes, low rates have “the perverse effect of fueling a decade-long stock market rally with only temporary pullbacks. This has pushed stock valuations to levels not seen since the dot-com bubble.”

Should recession strike, central banks might respond with strategies almost guaranteed to bolster goldbugs’ hoarding instincts: “quantitative easing and, possibly, new non-traditional measures to reinvigorate the global economy.”

With over $13 trillion of global debt now offering nominal negative yields, “our analysis shows that 70% of all developed market debt is trading with negative real yields, with the remaining 30% close to or below 1%.”

As for central bank purchases, they came to about $10 billion during the year’s first five months, with continued buying expected. But a 10-year average shows central banks responsible for only 10% of gold demand. Jewelry commands the lead with 51%, followed by 27% for bars and coins, 9% for technology, and 3% for ETFs and similar products.

Positive economic performance, especially in China and India, would likely enhance the top category.

With a mandate to “stimulate and sustain demand for gold,” the WGC represents some of the world’s biggest gold miners.

Download the WGC’s Mid-Year Gold Outlook 2019.

Visual Capitalist considers the hydrogen city: How hydrogen can help achieve zero emissions

May 14th, 2019

by Nicholas LePan | posted with permission of Visual Capitalist | May 14, 2019

In the modern context, cities create somewhat of a paradox.

While cities can improve the lives of people and entire nations, they also tend to be the main contributors of pollution and CO2 emissions.

How can we encourage this growth, while also making city energy use sustainable?

Resolving the paradox

This infographic comes to us from the Canadian Hydrogen and Fuel Cell Association and it outlines hydrogen technology as a sustainable fuel for keeping urban economic engines running effectively for the future.

The hydrogen city How hydrogen can help achieve zero emissions

 

The urban economic engine

Today, more than half of the world’s population lives in cities and, according to U.N. estimates, that number will grow to 6.7 billion by 2050—or about 68% of the global population.

Simultaneously, it is projected that developing economies such as India, Nigeria, Indonesia, Brazil, China, Malaysia, Kenya, Egypt, Turkey and South Africa will drive global growth.

Development leads to urbanization, which leads to increased economic activity:

The difficulty in this will be achieving a balance between growth and sustainability.

Currently, cities consume over two-thirds of the world’s energy and account for more than 70% of global CO2 emissions to produce 80% of global GDP.

Furthermore, it’s projected by the McKinsey Global Institute that the economic output of the 600 largest cities and urban regions globally could grow $30 trillion by the year 2050, comprising two-thirds of all economic growth.

With this growth will come increased demand for energy and CO2 emissions.

The hydrogen-fueled city

Hydrogen, along with fuel cell technology, may provide a flexible energy solution that could replace the many ways fossil fuels are used today for heat, power and transportation.

When used, hydrogen and fuel cell technology creates water vapour and oxygen, instead of harmful smog in congested urban areas.

According to the Hydrogen Council, by 2050 hydrogen could generate annually:

  • 1,500 TWh of electricity

  • 10% of the heat and power required by households

  • Power for a fleet of 400 million cars

The infrastructure requirements for hydrogen make it easy to distribute at scale. Meanwhile, for heat and power, low concentrations of hydrogen can be blended into natural gas networks with ease.

Hydrogen can play a role in improving the resilience of renewable energy sources such as wind and solar, by being an energy carrier. By taking surplus electricity to generate hydrogen through electrolysis, energy can be stored for later use.

In short, hydrogen has the potential to provide the clean energy needed to keep cities running and growing while working towards zero emissions.

See Part 1 of this series: Evolution of hydrogen, from the Big Bang to fuel cells.

Posted with permission of Visual Capitalist.

‘The Asian century’

April 4th, 2019

East has surpassed West, whether the West knows it or not, says Peter Frankopan

by Greg Klein

East has surpassed West, whether we know it or not, says Peter Frankopan

“Silk roads” can refer to the process of connecting people and cultures
through trade, according to Peter Frankopan’s recently published book.

 

Less than two years ago tensions along an especially sensitive border area sparked fighting between Chinese and Indian troops. Outside Asia, who knew? “As most of the world focused on the Twitter account of the US president and the circus surrounding Brexit, the threat of the two most populous countries on earth going to war was not just a possibility, it looked like becoming a fact,” writes Peter Frankopan. An uneasy truce eventually stalled hostilities but the West’s ignorance of the wider world remains. That’s both symptom and cause of the West’s decline, the author says.

The decisions being made in today’s world that really matter are not being made in Paris, London, Berlin or Rome—as they were a hundred years ago—but in Beijing and Moscow, in Tehran and Riyadh, in Delhi and Islamabad, in Kabul and in Taliban-controlled areas of Afghanistan, in Ankara, Damascus and Jerusalem. The world’s past has been shaped by what happens along the Silk Roads; so too will its future.—Peter Frankopan

Relatively few Westerners realize the extent of China’s Belt and Road Initiative. Actually a complex suite of alliances concerning resources, infrastructure, trade, security and even culture, the BRI forms just part of an Asian awakening that’s shifting the planet’s centre of importance while strengthening Eastern influence beyond Asia and Africa to make inroads into Europe, the Americas, the Arctic, cyberspace and outer space.

That’s the message of historian Frankopan’s latest book, The New Silk Roads: The Present and Future of the World. While present and future aren’t normally the precinct of historians, it was historical perspective that brought Frankopan to the topic. In context, Western global supremacy has been a recent, short-lived development.

Since announcing the BRI in 2013, China has promised nearly $1 trillion, mostly in loans, for about 1,000 projects, Frankopan reports. That money could “multiply several times over, to create an interlinked world of train lines, highways, deep-water ports and airports that will enable trade links to grow ever stronger and faster.”

That would enhance China’s access to, and control over, resources ranging from oil and gas to mines and farmland; provide markets for Chinese exports including surplus steel, cement and metals, as well as manufactured goods; create projects for Chinese contractors; secure foreign ports and other strategic commercial and military locations; and build closer foreign alliances for geopolitical as well as economic benefits.

Backed by Chinese money and local sovereign debt, Chinese companies have pushed roads, railways, power plants, grids and pipelines through Africa and Asia at a much faster rate than ever seen through Western aid. Of course that can put the supposed beneficiaries at the mercy of their Chinese creditors.

East has surpassed West, whether we know it or not, says Peter Frankopan

In 2011, for example, China forgave neighbouring Tajikistan’s infrastructure-related debt in exchange for several hundred square kilometres of territory. A $7-billion rail line in Laos represents over 60% of the country’s GDP. A rail-building boom in Angola left citizens with a per capita debt to China of $754 out of a per capita income of $6,200. In 2017 a Chinese company got a 99-year lease in lieu of debt on the Sri Lankan port of Hambantota, a strategic site for both commercial and military reasons. Other ports in Maldives, Vanuatu, the Solomon Islands and Djibouti could face a similar fate.

Even so, something like 85% of BRI projects “have proceeded without difficulty,” Frankopan states. China conducts many of its most opportunistic acquisitions openly, like buying a controlling interest in Piraeus, the Athenian port since antiquity. Other seaport purchases have taken place in Spain, Italy and Belgium.

Strategic ports and an alliance with Pakistan help position China in the Indian Ocean, while China continues to expand its South China Sea presence by building artificial islands for military bases. This isn’t just “the crossroads of the global economy” but a ploy to extend military power thousands of miles farther, according to a U.S. Navy admiral. China’s ambitions continue in the disputed East China Sea, location of the 2010 Senkaku conflict, in which China’s rare earths tactics demonstrated yet another weapon in the country’s arsenal.

As an economic powerhouse as well as a “geopolitical alternative to the US,” China can profit from American sanctions on countries like Iran. Russia too challenges U.S. policies towards countries like Saudi Arabia and Turkey, while the latter shows its willingness to trade with Iran and buy arms from Moscow.

Military co-operation can create unlikely allies. Last summer, in Russian’s largest war games since 1981, Beijing contributed 30 fighter jets and helicopters along with more than 3,000 troops. Included in the exercises were simulated nuclear attacks.

While futurologists and networking pioneers often talk about how the exciting world of artificial intelligence, Big Earth Data and machine learning promise to change the way we live, work and think, few ever ask where the materials on which the digital new world [depends] come from—or what happens if supply either dries up or is used as a commercial or a political weapon by those who have a near-monopoly on global supply.—Peter Frankopan

Even India, America’s strongest Asian ally and the Asian country most wary of Chinese expansion, stands to undermine U.S. influence with proposed transportation connections and free trade with Iran and Afghanistan.

Yet obvious perils weaken any notion of a united Asia working harmoniously towards a common goal. Russian-Chinese military co-operation doesn’t preclude Moscow stationing its 29th Army 3rd Missile Brigade, with nuclear missile capabilities, near the Chinese border.

Time will tell whether other countries can overcome the Eurasian chaos that inspired this maxim of Canadian miners: “Never invest in a country with a name ending in ‘stan’.”

Then there’s extremist Islam. Uighurs from western China have fought in Syria for the Islamic State in numbers estimated “from several thousand to many times that number.” China risks wider Muslim anger by running a gulag archipelago for Muslims. The country’s Xinjiang Uygur Autonomous Region hosts “the largest mass incarceration of a minority population in the world today.”

Oddly enough for someone who knocks Western insularity, Frankopan seems to share the current preoccupation with the U.S. president. Among Frankopan’s criticisms of the West is its supposed opposition to immigration, even though that’s a marginal position within liberal countries but official policy in most of the East.

Nor does Frankopan mention the weird ideological zealotry that threatens to destabilize if not destroy the West from within.

Still, history’s greatest value might be perspective on the present. This historian’s view of the present and future can help Westerners understand their not-so-esteemed status in the Asian century.

Visual Capitalist: A brief history of jewelry through the ages

March 21st, 2019

by Iman Ghosh | posted with permission of Visual Capitalist

A brief history of jewelry through the ages

 

Jewelry has been an integral aspect of human civilization for centuries, but it was the discovery and subsequent spread of precious metals and gemstones that really changed the game.

In this infographic from Menē TSXV:MENE, we visualize how the uses and symbolism of jewelry have evolved across time and space to become the industry we’re familiar with today.

Antique, yet ageless

There isn’t a single corner of the world that’s untouched by the influence of jewelry.

Ancient Egypt
Gold accompanied the affluent into the afterlife—the famous 1922 discovery of King Tutankhamun’s tomb was filled to the brim with gold jewelry.

Ancient Greece and Rome
Jewelry was used practically and as a protection against evil. The gold olive wreath design was highly popular during this time.

Mesopotamia
Both men and women in the Sumer civilization wore intricate pieces of jewelry, incorporating bright gems like agate, jasper or lapis lazuli.

Meso-America
The aristocracy in Aztec culture wore gold jewelry with gemstones to demonstrate rank. The jewelry also doubled up as godly sacrifices.

Ancient India
The Mughal Empire introduced the combination of gemstones with gold and silver. Today pure gold jewelry is often gifted to new brides for financial security.

Ancient China
Both rich and poor wore jade jewelry for its durable and protective properties. Pure gold jewelry is making a fashion comeback, doubling as a form of investment.

Modern jewelry: At a crossroads

Today jewelry is at once the very same and vastly different from what it used to be.

The industry is worth upwards of $348 billion per year and it’s not hard to see why. As an alternative asset, jewelry has grown 138% in value over the last decade—only outperformed by classic cars, rare coins and fine wine.

However, perceptions of jewelry vastly differ. It’s not a stretch to say that Western jewelry buyers are enamoured with diamonds, given their enduring association with special occasions—but it’s interesting to note how that ideal was fabricated.

The invention of diamonds

The De Beers Group is well known for making diamonds great again. In the early 1900s, the company had already monopolized the diamond trade and stabilized the market, but they faced the challenge of marketing diamonds to consumers at all income levels.

The average American considered diamonds an extravagance, preferring to spend money on cars and appliances instead. The concept of engagement rings existed but they weren’t widely adopted. The #1 slogan of the century—“A Diamond is Forever”— transformed all that.

Even as more companies like Tiffany and Cartier entered the playing field, De Beers had set a successful industry standard. But there’s a catch—diamonds are actually:

  • Not all that rare in nature

  • Intrinsically low in value

  • Easily replicated in a lab

  • Decreasing in sales

Despite these caveats, the popularity of diamonds illustrates how Western consumers do not approach jewelry in the same way as Eastern economies, where its function as a store of wealth persists.

The Eastern gold standard

In Eastern economies, jewelry often takes the form of pure gold. The reasons behind this difference are surprisingly pragmatic: gold is considered a secure and innate store of wealth that maintains its purchasing value over decades, allowing families to pass wealth from generation to generation.

The rich history of the precious metal has made it a sought-after commodity for centuries, and China and India drive more than half of global gold jewelry demand every year:

Year Share of demand (India + China) Total global jewelry demand (tonnes)
2014 57% 2,510 tonnes
2015 58% 2,426 tonnes
2016 55% 2,068 tonnes
2017 57% 2,201 tonnes
2018 58% 2,200 tonnes

Source: Gold Hub. Values have been rounded up to the nearest tonne.

Why are Eastern cultures so attracted to the properties of pure gold?

Part 2 of this series will show why gold is the world’s most incredible metal and why it’s coveted by billions of people.

Posted with permission of Visual Capitalist.

The World Gold Council bases its 2019 optimism partly on progress in China and India

February 25th, 2019

…Read more

World Gold Council hedges its forecasts for 2019

January 11th, 2019

by Greg Klein | January 11, 2019

Both financial market instability and structural economic improvements bode well for its favourite metal, the World Gold Council reports. The WGC’s Outlook 2019 attributes an optimistic price outlook to an interplay of those two factors along with U.S. interest rates and the dollar.

Bullion and gold-backed ETFs would benefit as savings, investments, jewelry and technology drive up demand. The prognosis also sees central bank demand continuing to rise. Last year’s sovereign purchases reached the highest level since 2015 “as a wider set of countries added gold to their foreign reserves for diversification and safety.”

Accentuating gold’s safe haven status would be the financial market uncertainty apparent in higher volatility, European instability, protectionist policies and “an increased likelihood of a global recession,” the report states.

“Stubbornly low” bond yields offer poor protection against uncertainty, the WGC notes. Meanwhile Europe’s economy lags behind the U.S. as the continent faces Brexit, social unrest in France and separatism in Spain, among other challenges. Increasing protectionism and trade war rhetoric threaten economies with inflation and restrictions to “the flow of capital, goods and labour.”

Comprising 70% of consumer gold demand, emerging markets remain “very relevant” to gold’s long-term performance. China’s Belt and Road projects boost regional economic and infrastructure development. India’s economic modernization should continue last year’s 7.5% growth into 2019, “outpacing most global economies and showing resilience to geopolitical uncertainty.

“Given its unequivocal link to wealth and economic expansion, we believe gold is well poised to benefit from these initiatives. We also believe that gold jewellery demand will strengthen in 2019 if sentiment is positive, while increase marginally should uncertainty remain.”

To the allure of gold, the WGC attributes its returns on investment and its liquidity. Additionally, the metal provides an almost unique hedge that often correlates with the market in good times but detaches itself during negative periods, the council states.

While a stronger U.S. economy and dollar could stall gold, the last two months have shown a correction in equities along with weaknesses in other assets, said Joseph Cavatoni, WGC managing director for the U.S. and ETFs. With political uncertainty also troubling investors “we’re going to see gold start to have a much more relevant role to play in people’s investment portfolios.”

Not without skin in the game itself, the WGC represents some of the world’s top gold miners.

Download Outlook 2019: Global economic trends and their impact on gold.

Old Testament turf begets newly identified mineral

January 7th, 2019

by Greg Klein | January 7, 2019

Northern Israel’s Mount Carmel is known for a more miraculous event, but that’s where a company exploring Biblical lands for material riches has made a novel discovery. On January 7 London-listed Shefa Yamim announced a new mineral named carmeltazite won official recognition from the International Mineralogical Association.

Old Testament turf begets newly identified mineral

Imperfections within the unique Carmel
sapphire can hold a newly discovered mineral.

The new entity came to light within the company’s trademarked Carmel sapphire. Made up of titanium, aluminum and zirconium, carmeltazite “is part of the remarkable mineral assemblage” found as tiny inclusions or impurities in the gemstone, the company stated. While not exactly the most compact abbreviation, carmeltazite can be denoted as ZrAl2Ti4O11.

Shefa Yamim also claims distinction for the Carmel sapphire itself, described as “a newly discovered type of corundum… unlike any other sapphire found in the world.” Typically black, blue-to-green or orange-brown in colour, it has so far manifested its largest size at 33.3 carats. That stone came from an area proximal to the River Kishon, associated with Old Testament stories of the Canaanites’ defeat.

Nearby Mount Carmel gained fame when a miraculous fire helped the prophet Elijah upstage Ahab and the idolatrous worshippers of Baal. Shefa Yamim’s exploration focuses on the mountain’s volcanic sources and the river’s alluvial prospects. The company expects to begin trial mining at its Kishon Mid-Reach project this year, targeting diamonds, rubies, moissanite and hibonite, in addition to its proprietary sapphire.

While the Carmel stone has yet to prove itself among buyers of bling, other sapphires have prompted pecuniary appreciation. A late November Christie’s auction achieved its maximum pre-sale estimate of $15 million for a necklace comprised of 21 Kashmir sapphires that outshone the accompanying 23 cushion-shaped diamonds. Originating in a mine that closed in 1887, the exceptionally rare sapphires were collected over a period of more than 100 years prior to the necklace’s creation.

As for rubies, the gems “have seen a more-than-fourfold price increase per carat in the past four years, with the finest rubies fetching $1 million per carat for the first time, as much as top-tier diamonds,” Bloomberg reported in November.

Buying rubies a decade ago would be “like someone who bought Google stock in Year 3 versus buying it now,” Seth Holehouse of the Fortuna auction house told the news agency. Chinese demand has helped push prices, especially for red rubies and other gems in red.

Driven largely by previous ownership, a pearl and diamond pendant that once belonged to Marie Antoinette sold for $36.16 million at a November Sotheby’s event. The auctioneer had hoped for a mere $2 million.

Unapologetically unorthodox

April 30th, 2018

Jayant Bhandari rejects convention as he discusses economies, cultures and opportunities

by Greg Klein

There are contrarians and there are contrarians. But maybe Jayant Bhandari would be better called a controversian. As a prolific writer/commentator and an adviser to institutional investors, his comments reflect a mind unsatisfied with received wisdom. Now a resident of Singapore, his travels have taken him to 80 countries, seven of which he’s lived in. That background has influenced his perspective on a number of topics including the emerging markets—or emerging market singular. China’s the only one, he insists.

Jayant Bhandari rejects convention to discuss emerging markets, the West and China

Jayant Bhandari goes beyond the
mainstream to examine the West,
China, emerging markets and gold.

Speaking on the phone to ResourceClips.com while visiting central India, he used that country to illustrate what he considers to be the emerging market fallacy. With a per-capita GDP of about $1,800, the country enjoys 7.5% growth. Multiplying those numbers shows India’s economy increasing by $135 per capita.

“Now 7.5% looks very good, but look at America,” Bhandari points out. Although it’s growing at “only” 2.3%, its per-capita GDP reaches nearly $50,000. “That translates into $1,150 growth per capita, which means that America’s GDP, on a per-capita basis, is growing nine times faster than India’s.”

He argues that people and organizations—like the World Bank and IMF—are dead wrong in claiming the two countries shouldn’t be compared.

Taking a pessimistic view towards much of the globe, he emphasizes that “something like 75% of the world’s consumption of commodities happens in China. So it is China which is in the driver’s seat and in my view it will continue to do very well going forward.”

While Chile, Argentina and Peru hold out hope, the rest of South America shows little prospect, he believes. Central America faces serious crime and social unrest. “Just about everything in Africa is imploding. The international media are almost completely ignoring the problems of South Africa which is, in my view, rapidly moving in the direction of a civil war. And if South Africa implodes, it won’t take much for the rest of sub-Saharan Africa to implode.”

Bhandari adds that “Chinese money and Chinese businesses enforce some kind of stability in many of these countries.” Yet lingering problems bode poorly for the future “and it is a reason why Trump is asking for a wall between the U.S. and Mexico. The Third World is not in good shape at all.”

Consequently many of its people appreciate gold’s safe haven status. “They don’t trust their institutions and they don’t trust their social structures,” Bhandari maintains.

Jayant Bhandari disregards convention to discuss emerging markets, the West and China

“The biggest buyers of gold are in the Middle East and south Asia because institutions in these countries simply don’t work and people do not trust them. They do not even trust their families and friends, basically. Pakistan is imploding right now, India is rapidly moving in that direction and wealthy people of these countries will rapidly move their investment wealth into gold once they realize that economic growth isn’t happening anymore.”

Although he regards himself “ambivalent about buying gold in Western countries,” he says: “If enough gold-buying happens in these poor countries, the gold price will do quite well and that will benefit buyers of gold in Western countries.

“Of course you have to protect yourself from government interference and it’s wise to keep some of your wealth in a form that you can keep in your own pocket.”

Still, Bhandari sees too much emphasis on gold’s price in U.S. dollars. Non-American buyers “look at gold in the currencies that they use at home. When people focus too much on U.S. dollar pricing of gold they might not understand the technical future of gold.”

What could trigger a significant and sustained price increase? One possibility could be turmoil in South Africa “because those problems would very rapidly spread across sub-Saharan Africa. But I also see problems continuing to increase in India and if this country increases its consumption very slightly on a per-capita basis, it will start consuming a lot more gold. And social instability is increasing in this country.”

People should pay attention to what Western civilization stands for in hopes that they can preserve it.

Among Bhandari’s more optimistic endeavours is Capitalism and Morality, a philosophy seminar that he hosts in Vancouver each year. “My purpose is to bring people together to discuss Western civilization, what I consider to be the only civilization that has ever existed.”

Considering the West unique for its respect towards reason and individuality, Bhandari says, “People should pay attention to what Western civilization stands for in hopes that they can preserve it.”

What does Bhandari’s perspective mean to investors? He examines the mistakes people make in junior resource stocks at the International Mining Investment Conference, held in Vancouver on May 15 and 16. For a 25% admission discount click here and enter the code RESOURCECLIPS.

Read about conference speakers Simon Moores and Ed Steer.

Flanders to Holland and back

March 13th, 2018

Resource Clips visits the diamond industry in Belgium and the Netherlands

by Greg Klein

Resource Clips visits the diamond industry in Belgium and the Netherlands

A stately building belies elaborate security guarding this Antwerp diamond bourse.

 

As if providing an outer defence, a solid line of retail jewellers blocks two broad avenues from Antwerp’s famed diamond district. Access comes mainly through a side street with a police-controlled traffic barrier. More cops and soldiers (the latter attesting to Belgium’s ongoing terror alert) patrol the narrow streets inside. The only vehicles seem to be armoured vans customized for the diamond trade or the occasional bicycle carrying an Orthodox Jew with long coat and side curls flowing in the wind but magnificent hat solidly perched.

Resource Clips visits the diamond industry in Belgium and the Netherlands

Practitioners in Belgium and the Netherlands
perfected the art of transforming rough stones into jewelry.

Except for the Portuguese synagogue, the buildings look un-Antwerpishly drab, catering to four bourses, several major companies and many more smaller operations that buy and sell stones and/or cut and polish them, as well as businesses selling tools of the trade or offering services like laser inscription removal.

Travel agents advertise flights to Mumbai and the Emirates, the Union Bank of India maintains a local branch and the neighbourhood postal outlet flogs a “one-of-a-kind diamond postage stamp.”

And there are no photos allowed, a courteous but firm police officer insists.

“But I’m a journalist from Canada.”

“I realize that, but it’s not allowed.”

“Being a journalist from Canada?”

“They don’t like it.”

“They” apparently represent the world’s diamond capital, a status Antwerp still holds for grading rough, although no longer for the art of transforming those stones into jewelry. One polishing factory, however, is DiamondLand, which welcomes visitors to its workshop before ushering them into the sales department. A guide explains that Antwerp’s seemingly ubiquitous diamond retailers cater to an international clientele attracted by prices that justify travel expenses.

Resource Clips visits the diamond industry in Belgium and the Netherlands

Traders in 15th-century Bruges met outside
the home of Jacob van der Beurze, from
whom the word “bourse” was derived.

Yet this global diamond centre’s far from any mine. Antwerp and other cities of the Low Countries gained that peculiar stature pretty much by inventing the modern diamond industry. Just how they did that can be explained by a visit to Bruges, aka Brugge.

Those able to tear themselves away from the insufferably pretty canal-side buildings of possibly Europe’s most beautiful fairy tale surroundings could spend a few interesting hours in the city’s Diamond Museum. There, visitors learn of Venetian traders who brought diamonds to Europe from India, once the world’s only known source, eventually establishing a permanent presence in this once-important trade centre by the 15th century. That was before 16th century Portuguese and 17th century Dutch took over the Asian trade routes.

Other European cities had diamond cutters too, but it was in Bruges in 1476 that Lodewijk van Bercken is said to have invented the technique of polishing stones using a wheel, diamond dust and olive oil. His existence might owe more to legend than fact, but the technique continued, enhanced by later refinements and more recent technology.

As local waterways silted up, Bruges lost its overseas trade and the diamond industry shifted to Antwerp, which in the late 15th century became the world’s greatest trade centre overall. The industry gained new blood with migrations of Jews fleeing the Spanish in Spain, the Spanish in Portugal and, later, the Spanish in Flanders as the industry moved once again, this time to Amsterdam. Diamonds played a part in the city’s Golden Age, which flourished especially well after Amsterdammers forced the closure of Antwerp’s port. Protestants from France and Flanders joined the religious diasporas that bolstered Europe’s diamond industry.

During all that time new diamond sources were found in Borneo, Brazil, Russia and Australia, with the greatest discoveries of all in late 19th-century South Africa. That country’s first consignment of stones sparked a boom in Amsterdam, bringing unprecedented demand for cutters and polishers.

Resource Clips visits the diamond industry in Belgium and the Netherlands

This exacting profession continues
to draw new adherents.

Amsterdam’s decline began in the 1920s, to the advantage of Antwerp. Bruges also regained some stature as early 20th-century strikes encouraged some Antwerp companies to move their operations to job-starved West Flanders. Bruges’ on-and-off revival lasted about 61 years, Amsterdam held out with a few prominent companies but Antwerp prevailed. More recently, however, polishing has been moving to places like Tel Aviv, New York, Moscow and especially Surat, where the sector could be joined by the world’s largest diamond bourse, reportedly now under construction.

But Amsterdam, second only to Bruges for canal-side prettiness, to Vancouver for drugs and hookers, and to nowhere for massive mobs of selfie-snapping sightseers, still hosts companies offering workshop tours. Among them is Gassan Diamonds, now ensconced in a building that originally housed Boas Bros, once Europe’s largest company. Among the newer company’s achievements is the patented Gassan Cut with 121 facets.

Further factory visits make facet envy evident. One such operation is Coster Diamonds, founded in 1840 and the world’s oldest remaining diamond company. It was Coster that cut history’s most fabled stone, the Koh-i-Noor, now part of Britain’s Crown Jewels.

Crediting lengthy experience and new technology, Coster created the Royal 201 eight years ago by adding 144 facets to the more traditional brilliant cut, aka the Amsterdam cut. Coster also claims a Guinness record for the smallest polished stone ever—a tiny, tiny brilliant cut of 0.0000743 carats.

But with its 257-facet Star of Amsterdam created two years ago, Amsterdam’s Zazare Diamonds surpasses Gassan and Coster in the many-sided contest. This isn’t just a numbers game, a Zazare rep insists. “More facets mean more sparkle, more life,” she says.

But much of the industry’s sparkle and life have moved elsewhere, especially India. Numbers provided by Rapaport News show the country’s net polished exports, representing exports minus imports, climbed 3.8% to $20.71 billion last year. Belgium’s share fell 34% to $269.2 million.

Although India already hosts the world’s largest gem exchange in Mumbai’s Bharat Diamond Bourse, the Surat Diamond Bourse would far overshadow its neighbour. Construction has begun on a nine-tower complex that could accommodate more than 4,400 merchants, sources told Rapaport. Expected to be fully operational by 2021, the long-delayed proposal would be located within the government-planned Diamond Research and Mercantile (DREAM) City, confirming much of the world’s trade in the country that first found and coveted the gems.

 

Resource Clips visits the diamond industry in Belgium and the Netherlands

Dozens of diamond shops form a solid wall curving
along two streets outside Antwerp’s diamond district.

 

Resource Clips visits the diamond industry in Belgium and the Netherlands

But not all of them thrive.

Authors William Dalrymple and Anita Anand consider responses to India and Pakistan’s rival claims to the Koh-i-Noor diamond, now part of Britain’s Crown Jewels

October 17th, 2017

…Read more