What impact has the Ukraine-Russia war had on the supply of gold to jewelers and watchmakers?

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Due to the war that Russia has been waging on Ukraine for almost four months now, luxury jewelers and watchmakers are finding it increasingly difficult to be supplied with raw materials.

 

Since many countries and companies have disassociated themselves from Russia because of the country’s actions towards Ukraine, many luxury houses have also followed suit and interrupted their commercial relations with the latter. LVMH, Kering and Hermès are some of the luxury groups that have reduced their presence and that of their subsidiary brands in Russia.

 

But this situation has had several consequences for the supply of raw materials to luxury jewelers and watchmakers.

 

Indeed, Russia is the world’s largest producer of natural diamonds and the second largest miner of gold, according to the World Diamond Council and the World Gold Council. And luxury houses, such as Kering, have refused to buy diamonds mined in Russia since the Russian invasion on February 24.

 

According to the US Treasury, the Russian state-owned diamond mining company Alrosa alone accounts for 90% of the diamonds mined in Russia and 28% of the world market. Alrosa has close ties to the Responsible Jewellery Council (RJC), which includes many of the world’s jewellery companies. As a result, Richemont, Pandora and Kering have left the organization because of the RJC’s ties to Alrosa.

 

It is not in line with Richemont’s values to be part of an organization that includes members who support conflicts and wars,” Cartier‘s boss said. All other brands of the group have also left this council, he said later.

 

What alternative to Russian gold?

 

The non-governmental organization Swissaid noted last May a significant jump in Swiss gold imports from Dubai. However, not all luxury companies report importing Russian gold from Dubai.

 

I’ve heard there are challenges in Dubai, we don’t buy gold there,” said Bérangère Ruchat, Richemont‘s new sustainability manager.

 

However, like several other companies, Richemont is now relying on recycled gold of industrial origin. Indeed, it is reportedly sourcing 94% recycled gold through its in-house Varinor refinery, in addition to focusing on recycling old jewelry from North America, Western Europe and Japan.

 

This is also the case for jewelry houses Vever and Courbet, which source only recycled gold, the traceability of which is guaranteed by the RJC-CoC label, the RJC’s most stringent standard for materials that must “tell the full story of how they were sourced, traced and processed from mine to retailer,” according to the label’s website.

 

Other companies such as Patek Philippe, Swatch Group or Rolex did not prefer to specify where their gold and diamonds come from, although they assure the guarantee of their traceability system and the ethics of their country of origin.

 

Read also > THE FASHION AND LUXURY INDUSTRY GIVES A GENERALLY POSITIVE ASSESSMENT OF THE FIRST MACRON QUINQUENNIUM

 

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Due to the war that Russia has been waging on Ukraine for almost four months now, luxury jewelers and watchmakers are finding it increasingly difficult to be supplied with raw materials.

 

Since many countries and companies have disassociated themselves from Russia because of the country’s actions towards Ukraine, many luxury houses have also followed suit and interrupted their commercial relations with the latter. LVMH, Kering and Hermès are some of the luxury groups that have reduced their presence and that of their subsidiary brands in Russia.

 

But this situation has had several consequences for the supply of raw materials to luxury jewelers and watchmakers.

 

Indeed, Russia is the world’s largest producer of natural diamonds and the second largest miner of gold, according to the World Diamond Council and the World Gold Council. And luxury houses, such as Kering, have refused to buy diamonds mined in Russia since the Russian invasion on February 24.

 

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Due to the war that Russia has been waging on Ukraine for almost four months now, luxury jewelers and watchmakers are finding it increasingly difficult to be supplied with raw materials.

 

Since many countries and companies have disassociated themselves from Russia because of the country’s actions towards Ukraine, many luxury houses have also followed suit and interrupted their commercial relations with the latter. LVMH, Kering and Hermès are some of the luxury groups that have reduced their presence and that of their subsidiary brands in Russia.

 

But this situation has had several consequences for the supply of raw materials to luxury jewelers and watchmakers.

 

Indeed, Russia is the world’s largest producer of natural diamonds and the second largest miner of gold, according to the World Diamond Council and the World Gold Council. And luxury houses, such as Kering, have refused to buy diamonds mined in Russia since the Russian invasion on February 24.

 

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The editorial team
The editorial team
Thanks to its extensive knowledge of these sectors, the Luxus + editorial team deciphers for its readers the main economic and technological stakes in fashion, watchmaking, jewelry, gastronomy, perfumes and cosmetics, hotels, and prestigious real estate.

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