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by Will Purcell

The diamond stocks box score for Friday was a bright 44-25-27-35 (A-D-U-N). The TSX Venture Exchange gained 10 points to 1,658 while polished diamond prices dropped 0.2 per cent. Surat Rough Diamond Sourcing Ltd., a major supplier of Indian rough, called interest in its most recent sale of diamonds "lukewarm," often a seller's euphemism for "horrid." Surat offered 300,000 carats valued at over $6-million, or a bit over $20 (U.S.) per carat. Only two-thirds of the diamonds sold. A month earlier Surat sold $17.2-million (U.S.) worth of rough in an on-line auction. Diamantaires blame Surat's poor sale on the low-quality diamonds flooding out of Zimbabwe now that the Kimberley Process has recertified diamonds from the Marange district for export. The sale of Marange rough had been suspended for three years after a wave of violence, allegedly masterminded by Robert Mugabe's government thugs, swept through the area.

Lower prices for low-quality diamonds were a key reason that Robert Gannicott's Harry Winston Diamond Corp. (HW) began stockpiling its Indian goods late last year. Harry, up 11 cents to $13.33 on 189,000 shares, has resumed the large sales it typically holds every five weeks but even so, it is expected to hold a significant inventory of rough into the next quarter. Harry Winston sends its 40-per-cent share of the rough mined at Diavik to its sorting facility in Toronto. Near gems are typically sold into the Indian market while gem-quality diamonds usually wind up in Antwerp. The company has a third class of rough: luxury quality. Those stones are sold directly to special customers.

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