b'The sun sets over the open pit of De Beers Gahcho Ku mine in Canada. In operation since 2016, Gahcho Ku is one of the worlds newest diamond mines. (Photo credit: Ben Perry/Armoury Films, De Beers Group)He says middle-class Chinese consumers will be the main drivers of diamond jewelry demand going forward, particularly those from the countrys smaller cities, outside of behemoths like Beijing and Shanghai, that are growing rapidly. Indian consumers will be a second-ary growth driver.As for the United States, he notes the U.S. consumer has surprised [in a positive way] recently so dont count [them] out, especially if we go through a period of reindustrialization here in the U.S. Bain & Co.s Linde says the pan-demic did not hinder demand for natural diamonds, which has been very robust and shows the resiliency of the industry. She says it is unclear if demand will continue to grow at theZ (currently about 10 to 25 years old) will come into their own as same pace or undergo a post-pandemic correction.luxury consumers. Retailers will have to figure out what are the right One thing that is certain, however, is that the market is on themessages and modes of engagement for this new crop of consumers, brink of another generational shift.Linde says. As the 2020s give way to the next decade, members of GenerationIts a fascinating time, isnt it? U.S. companies with a direct ownership relationship with a company overseasOn Feb. 24, say in India or Antwerpthat buys from Alrosa to consult an attorney. after weeks of amassing troops at the border, Russia invaded Ukraine, creating a humanitarian crisis and prompting theBusiness owners with questions can also call the OFAC hotline at 1-800-United States and other nations worldwide540-6322.to sanction Russia in an effort to cut off its access to funding. From a supply standpoint, it remains unclear how severely the sanctions The second round of sanctions included Alrosa and its CEO, Sergeyon Russia will impact global diamond production in 2022 and beyond. Ivanov Jr.Alrosa produced 32.4 million carats of diamonds in 2021, making it the Shortly after sanctions were announced, Alrosa began to pull back as anworlds largest supplier alongside De Beers (32.3 million carats). industry leader. As of press time, Alrosas ability to do business in the U.S. was restricted It voluntarily resigned as vice chair of the Responsible Jewellery Councilbut it was still able to export diamonds for cutting and polishing, and to sell and later suspended its membership. It also pulled funding from the Naturaldirectly in key markets like China, India and Dubai. Diamond Council, the miner-funded organization that works to marketPrior to Russias invasion of Ukraine, industry analyst Paul Zimnisky natural diamonds worldwide. forecast global diamond production would total 120 million carats in 2022, On March 11, U.S. President Joe Biden issued an executive orderrecovering from the low it hit in 2020 because of the global pandemic. banning the import of non-industrial diamonds from Russia, a move thatHe projects diamond production to climb from there as work at the effectively bars U.S. companies from buying diamonds directly from AlrosaLuaxe mine in Angola ramps up, peaking above 130 million carats in 2025. or any other Russian company.Luaxe is the only major diamond mine expected to come online for the The following week, news surfaced that Alrosa would be closing its U.S.rest of the decade, but development of the mine is a partnership between office, with resigning Alrosa USA President Rebecca Foerster citing theAlrosa and Endiama, Angolas state-run miner. Zimnisky said with Alrosa inability of the company to do any business in the United States.involved, the project could run into delays.In April, the U.S. government put the ultimate sanction on Alrosa.Another Alrosa project, Mayskaya in Yakutia, was listed in a recent De The U.S. Treasury Departments Office of Foreign Asset ControlsBeers Diamond Insight Report among the notable new diamond projects (OFAC) placed the diamond miner on its Specially Designated Nationalsworldwide, with full production expected in 2025. list, a move that froze the companys assets in the United States and essen- While it was unclear as of press time exactly what Russia and Alrosa will tially barred U.S. companies from doing business with Alrosa.decide to do, Zimnisky said a drop-off in Russian production is a possibility, At that point, the Jewelers Vigilance Committee advised any companiesand he could be revising his global diamond production forecast downward that hadnt already stopped doing business with Alrosa to do so. It also advisedin the near future. NATIONAL JEWELER 55'