Oct 04, 2016

KP Chair-AWDC Hosted 2nd Forum On Diamond Valuation Reduces Gap in Perspectives

The second of a series of three special forums on rough diamond valuation, mooted by KP Chair Ahmed Bin Sulayem and jointly hosted by the Antwerp World Diamond Centre (AWDC), was held in Antwerp recently.  

In his opening remarks at the Forum, Bin Sulayem called for a “consensual approach to determining a set of criteria to create universal methodology for the valuation of rough diamonds”, a report on the Forum stated.

“Adopting the right methodology for a standardised approach to creating a process, which will serve all areas of the rough diamond industry, from large corporations to artisanal miners, is complex,” the KP Chair is reported to have said. “What we’ve achieved so far, however, indicates a willingness on the part of all diamond industry professionals to embrace the concept of a set of rough diamond valuation protocols.”

A host of industry experts attended the Forum, and addressed a variety of pertinent issues.  The numerous topics covered included a statement on Anti-trust legislation, using ‘Chatham House’ protocols. The forum also examined the challenges of creating rough diamond valuation structures including the “rigours of the human element of valuing rough diamonds”.

The presentation of the representative of the Diamond Development Initiative (DDI), reflected the difference in perspective in valuation between large corporations and smaller artisanal miners, the report added.  

Welcoming the opportunity created by the KP Chair, Stephane Fischler, President of the Antwerp World Diamond Centre is reported to have said: “Ensuring proper return on export of diamonds, especially so for the most challenged KP member countries, the alluvial producers, is key to the sustainability of our common efforts.”

Fischler added: “The discussions have produced interesting avenues, all converging towards the need of building expertise and capacity whilst ensuring solid governance processes.”

“The workshop identified a range of methods that could be adopted focusing in detail on reverse engineering based on the retail price of polished diamonds,” the report noted. “Reverse engineering is a method where the valuator will base his decision on the forecast of polished output of the stone applying a certain percentage of fixed costs, generally 15 per cent including polishing and certain margins.”

“What came out of today’s forum was a clear message that what we’ve learned so far takes us much closer to achieving our objectives,” Bin Sulayem summarised. “There was consensus that individual governments should take a greater role by establishing regional offices - and creating training programmes to enhance the skills of valuation experts. Also to come out of the meeting was the agreement to look into a standardised method of identifying a valuation starting point.”

Peter Meeus, Workshop Coordinator, said in conclusion: “We have come very far in this second edition of the KP Chair’s Special Forum on rough diamond valuation and this is in merely four months. By the Plenary we hope to identify a methodology that can be used in diamond offices around the world based on pre-formatted rough sorting protocols linked up with a reverse engineering platform based on real-time transactional prices. If we can still do that within this year we will have done what no one has done before”.

The third Rough Diamond Valuation Forum has been planned to coincide with the Plenary meeting to be held in Dubai in November this year.