The year of omnishambles

Edahn Golan

The Oxford Dictionaries UK Word of the Year 2012 was ‘omnishambles.’ The word describes “a situation that has been comprehensively mismanaged, and is characterized by a string of blunders and miscalculations.What word would lexicographers of the diamond industry select for 2013? At the end of each year, according to tradition, we make resolutions for the coming year. The hope is that the new year will be, at the very least, somewhat better than the past year. When looking ahead from the tail end of 2012, no one probably wished for 2013 to look the way it did.

Was it a year of development? Not for many. Rough diamond prices continued to rise as miners stubbornly pushed them up until the market nearly gave in on doing any more business. Prices of polished diamonds should not be described as ‘stable,’ but rather as flat. The distinction is important: stability is positive. Flat is a victim’s state. Prices fell victim to high rough prices pushing up on one side, and dull demand applying an equal force in the opposite direction. Not only prices fell victim, nearly everyone in the pipeline, from rough traders through manufacturers to polished wholesalers to retailers, fell victim to the situation.

BHP Billiton exited the diamond industry and Rio Tinto failed to find a buyer for its diamond unit. Even a possible IPO by Rio Tinto looks out of the question at this point, as Argyle, which turned into a $2 billion money pit, is not an attractive purchase.

There were no marketing highlights, either. No brilliant campaign to catch the imagination, or generate the kind of interest and demand that would pull diamonds through the pipeline onto fingers, necks or earlobes.

The financial sector keeps sniffing around the diamond industry and diamonds, but even this hungry beast is not yet taking a bite, preferring to satisfy its appetite elsewhere.

The industry banks keep a watchful eye and made a bold move this year by deciding to cut back on financing. Standard Charter Bank apparently made up its mind to slowly end its relationship with the industry after entering it with a bang only a couple of years ago. ABN AMRO, which finances the entire pipeline except mining, ended its 100-percent financing of rough purchases of Sight goods (and some others), lowering it to 70 percent as we first reported a few months ago.

Antwerp Diamond Bank has been on the block for some time, looking for a buyer. It will eventually happen and its current cautious approach to the industry may decrease even further. Bank Leumi in Israel is already out of the game and Union Bank is aiming to decrease its involvement, too. In India, the winds of change are also blowing, with smaller banks reconsidering their positions regarding the industry.

This was also the year of undisclosed lab-made goods. What a shame. Instead of developing them into a separate niche that many could benefit from, it starts off as part of fraudulent activity. The good news is that De Beers is supplying traders with a device that will help them detect ‘synthetics’ in parcels. However, leased at $25,000 a year, this looks a little too opportunistic on the diamond miner’s part. If it wants to support its business of natural diamonds, make detection of undisclosed goods more accessible to those with smaller pockets.

As we look back, we also see the closure of the only promising diamond fund, Diamond Circle Capital, which officially stopped trading exactly a year ago, while hopes to see diamond ETFs launched this year are yet to happen.

This was the year that DTC moved to Botswana, a source of dejection for many. This move will sadly not be followed through with the important leadership of Varda Shine, who recently announced that she is leaving her VP post formerly known as CEO of the DTC.

Donna Baker also made a sudden and distressing departure. The former CEO and President of GIA is credited for overhauling the lab’s oversight procedures and restoring the industry’s faith in its leading lab. Baker, another leading female figure in the industry, will be greatly missed.


The mysterious departure of Michael Rea, CEO of the Responsible Jewellery Council, was announced on Wednesday, his last day in the post. Quick and unexplained departures create rumors, concerns and, worse, a sense that matters are not being managed well.

Does last year’s Word of the Year describe this year’s diamond industry well? Is the industry “comprehensively mismanaged, and characterized by a string of blunders and miscalculations?” This is a disturbing thought, but luckily not true everywhere.

Alrosa launched a successful share issuance on the Moscow stock exchange, culminating a year of focused progress that included a number of good diamond asset acquisitions and expansion of its contracted client list. Alrosa is clearly a company on the rise and in many ways the industry’s big white hope.

High-end diamonds, fancy color goods and super large D/FL-IF diamonds, are doing very well on the auction arena as well as in quiet, unreported transactions. This is a bright spot for the industry. It’s generating interest in diamonds, serving as the most important marketing facility and product ambassador diamonds have today.



“At this point, reflection feels necessary. A hard look at ourselves, identifying what is wrong, and then taking the corrective measures needed to rise from the shambles.”


The visceral sense is not one of omnishambles, but 2013 was no doubt a pretty crummy year for the industry. Oxford Dictionaries picked ‘Selfie’ the word of 2013. Selfies, those photos people take of themselves, usually with a smartphone, may expose an egocentric exhibitionism. However, looking at oneself also offers an opportunity for self-examination.

If Oxford Dictionary lexicographers have any power of prediction, will the diamond industry – from miners to retailers and all associated businesses – turn 2014 into the year of introspection? At this point, reflection feels necessary. A hard look at ourselves, identifying what is wrong, and then taking the corrective measures needed to rise from the shambles.

Source Idexonline