IDMA Voices Concerns about Diamond Derivatives

The International Diamond Manufacturers Association (IDMA) expressed “grave concerns” regarding the risks stemming form proposed projects to form a financial market in diamond futures and derivatives.

During its June 24 – 26 Presidents Meeting in Amsterdam, IDMA presidents engaged in an extensive exploration of the various projects, and questioned the benefits to prospective investors in these financial products. Their concerns are over risks to the industry “resulting from the anticipated volatility which will be injected into an otherwise reasonably stable marketplace.”

IDMA Presidents urged in a statement “that any diamond financial product must incorporate full transparency and remain free from any potential conflicts of interest.”

In other issues, IDMA has unanimously reaffirmed its endorsement of the Diamond Development Initiative (DDI), a project to improve conditions in the artisanal alluvial diamond mining sectors, and appointed IDMA’s Secretary General, Stephane Fischler, to the newly formed DDI Board of Directors.

In the context of preserving consumer confidence in diamonds, IDMA Presidents secured the involvement of CIBJO President, Gaetano Cavalieri, in establishing guidelines to ensure that all diamond grading laboratories are properly equipped with the technology and expertise necessary to ensure detection and full disclosure of all treatments, simulants and synthetic diamonds.

During a session that discussed the topic, IDMA President Jeffrey Fischer told attendees that some labs don’t have the ability to detect treatments or lab made diamonds, relaying on disclosures by the submitting companies.

IDMA welcomed the Diamond Manufacturers Association of Canada as a full member. During their deliberations, members also explored strategies to find alternative sources for rough diamonds. Recognizing the emergence of new diamond manufacturing centers, IDMA Presidents invited all new manufacturing centers to submit an application for membership.

IDMA Presidents discussed and reviewed the three year report of the Kimberly Process Secretariat and KP compliance. In addition, Fischer repeated the organization’s support for the WFDB Mark.

The next World Diamond Congress will be held in Shanghai in May 2008.