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Lab-Grown Diamonds Shake Up Traditional Market Amid Pandemic’s Impact

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World's Second-Largest Diamond Discovered in Botswana

The global diamond industry is witnessing a dramatic shift in the demand for rough diamonds, particularly impacting the popularity of one-carat and two-carat solitaire bridal rings in the United States.

This transformation has been attributed to an increasing number of Americans opting for engagement rings adorned with lab-grown diamonds over their natural counterparts.

While diamond demand across various segments has softened in the wake of the pandemic, consumers have redirected their spending towards travel and experiences, while economic challenges have impacted luxury purchases.

The primary driver behind this price drop, according to industry experts, is the surging demand for lab-grown diamonds. The synthetic diamond industry has strategically targeted this price-sensitive consumer segment, reaping the rewards in the world’s largest diamond market.

It’s important to clarify that this shift doesn’t necessarily translate into deep discounts on engagement rings themselves. Instead, the impact is primarily felt in the rough-diamond market—an opaque realm inhabited by miners, merchants, and traders, several steps removed from the jewelry store price tags.

Nevertheless, the rapid and substantial decrease in prices for one of the diamond industry’s pivotal products has left the market in a state of upheaval.

The pressing question now is whether the diminishing demand for natural diamonds in this category represents a lasting change and, crucially, whether lab-grown gems will expand their presence into higher-priced diamonds, typically dominated by Asian buyers.

De Beers, a leader in the industry, attributes the current weakness to a natural downturn in demand following a pandemic-induced surge in prices when consumers were confined to their homes. While acknowledging some market share erosion by synthetic stones, the company views it as a cyclical, rather than structural, shift.

Paul Rowley, head of De Beers’ diamond trading business, stated, “There has been a little bit of cannibalization. That has happened, I don’t think we should deny that. We see the real issue as a macroeconomic issue.”

Lab-grown diamonds, identical in physical properties to their mined counterparts but produced in a matter of weeks in controlled environments, have long been seen as a potential threat to the natural mining industry.

Advocates argue that they offer a more affordable alternative with fewer environmental and social concerns associated with traditional mining.

For much of the past decade, this threat remained hypothetical, with lab-grown diamonds making limited headway outside of lower-priced gift segments. However, this is changing rapidly, as lab-grown products gain significant traction in the vital US bridal market.

To counter weakening demand, De Beers has responded by aggressively slashing prices for “select makeables,” rough diamonds ranging from 2 to 4 carats that can be cut into smaller, high-quality stones for bridal rings. Over the past year, De Beers has reduced prices in this category by more than 40%, including a cut of over 15% in July, according to insiders.

De Beers, historically a monopoly in the rough diamond market, typically resorts to aggressive price cuts as a last resort. The scale of the recent price drops for this benchmark product is unprecedented, according to industry traders.

In June 2022, De Beers was charging approximately $1,400 per carat for select makeable diamonds. By July this year, that price had plummeted to about $850 per carat. There may still be room for further price adjustments, as these diamonds remain 10% more expensive than their counterparts in the secondary market, where traders and manufacturers conduct transactions among themselves.

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Goya Foods Takes Legal Action to Assert ‘Goya Olive Oil’ Trademark Ownership

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Goya Foods

“Goya Olive Oil” trademark in Nigeria, Goya Foods Incorporated has initiated legal proceedings against the Registrar of Trademarks under the Federal Ministry of Trade and Investment.

The case, numbered FHC/ABJ/CS/883/2023, was brought before the Federal High Court in Abuja.

Goya Foods, a prominent producer and distributor of foods and beverages across the United States, Spanish-speaking countries, and Nigeria, seeks to enforce a longstanding consent judgment issued by the court in December 2006.

The judgment directed the Registrar to rectify the Trademarks Register to reflect Goya Foods Incorporated as the rightful owner of the “Goya Olive Oil” trademark, without any further formalities.

The lawsuit, exclusively revealed to sources, underscores Goya Foods’ determination to safeguard its intellectual property against alleged infringements.

According to court documents, Goya Foods obtained the consent judgment against Chikason Industries Limited, which was accused of marketing “Goya Olive Oil” in Nigeria, thus infringing on Goya Foods’ registered trademark.

Legal counsel for Goya Foods, Ade Adedeji, SAN, emphasized the necessity of rectifying the Trademarks Register to protect their trademark interests effectively.

Despite appeals to the Registrar, the requested rectification has not been implemented, prompting Goya Foods to escalate the matter through legal channels.

The case has been adjourned to September 27, 2024, for further proceedings, highlighting the complexity and significance of trademark disputes in the global marketplace.

Goya Foods remains committed to upholding its brand integrity and securing its proprietary interests amidst the evolving landscape of international trademark law.

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IOCs Accused of Blocking Direct Crude Sales to Dangote Refinery

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Dangote Refinery

Dangote Industries Limited (DIL) has accused International Oil Companies (IOCs) of obstructing direct crude oil sales to its refinery and forcing the company to use costly middlemen.

This development comes after a statement by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) suggested a “willing buyer-willing seller” dynamic was in place as mandated by the Petroleum Industry Act (PIA).

Devakumar Edwin, Vice President of DIL, countered NUPRC CEO Gbenga Komolafe’s claims, stating that IOCs consistently make it difficult for local refiners by pushing sales through international trading arms, which inflate prices and bypass Nigerian laws.

“These middlemen earn unjustified margins on crude produced and consumed within Nigeria,” Edwin stated.

He noted that only one local producer, Sapetro, has sold directly to DIL, while others insist on using trading arms abroad.

Edwin detailed the financial impact, citing instances where DIL was charged a $2-$4 premium per barrel above the official price.

In April, DIL paid $96.23 per barrel for Bonga crude, which included significant premiums, compared to a much lower premium for West Texas Intermediate (WTI) crude.

While acknowledging NUPRC’s support in resolving some supply issues, Edwin urged the regulatory body to revisit pricing policies to ensure fair market practices.

“Market liquidity is essential for fair pricing. We hope NUPRC addresses these issues to prevent price gouging,” he stated.

This dispute highlights ongoing challenges in Nigeria’s oil sector, where domestic refiners struggle to secure local crude amidst complex market dynamics.

The outcome of these negotiations could significantly impact the refinery’s operations and broader industry practices.

The situation underscores the need for transparent and efficient crude supply systems to bolster Nigeria’s refining capacity and economic growth.

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Dangote’s $20 Billion Refinery to Begin Petrol Sales Next Month

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Petrol - Investors King

Aliko Dangote announced on Monday that his long-awaited $20 billion refinery complex will commence petrol sales starting next month.

The announcement came during a press briefing held at the refinery site in Lagos, where Aliko Dangote, Africa’s richest man, detailed the project’s progress and future plans.

“We are proud to announce that the Dangote Refinery will begin selling petrol from August,” Dangote stated confidently.

“This milestone marks the culmination of years of meticulous planning, construction, and overcoming numerous challenges.”

Dangote’s refinery, touted as the largest single-train refinery in the world, is designed to process 650,000 barrels of crude oil per day once fully operational.

The facility aims to not only meet Nigeria’s domestic demand for refined petroleum products but also contribute significantly to export markets across West Africa.

“We have entered the steady-state production phase earlier this year, and now we are ready to begin commercial sales,” Dangote explained. “Initially, we will focus on petrol production, with plans to expand our product range as we ramp up to full capacity.”

The refinery’s launch is expected to alleviate Nigeria’s longstanding dependence on imported refined products, thereby boosting the country’s energy security and reducing foreign exchange outflows associated with fuel imports.

Beyond petrol sales, Dangote revealed ambitious plans to list both the refinery and its associated fertilizer plant on the Nigerian Exchange Group (NGX) by the first quarter of 2025.

This move aims to attract broader investor participation and unlock additional value for shareholders.

“We are committed to transparency and accountability in our operations,” Dangote emphasized. “Listing these subsidiaries on the NGX will not only strengthen our corporate governance framework but also enhance the refinery’s financial sustainability.”

Challenges and Future Prospects

Despite celebrating the imminent commencement of petrol sales, Dangote acknowledged challenges encountered during the project’s execution, including delays in securing land for a petrochemical facility in Ogun State, which incurred substantial costs.

“We faced bureaucratic hurdles that resulted in significant delays and financial losses,” Dangote lamented. “Nevertheless, we remain steadfast in our commitment to advancing Nigeria’s industrial capabilities and contributing to economic growth.”

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