What I think might have happened at SRC if there was a "magnetic oxide" on the stones, perhaps in some of the initial steps in processing as part of the separation, they run the sample over a conveyor belt ending with a magnetic drum and dropping what makes it past the magnetic drum perhaps onto another conveyor for the separating, perhaps by the x-ray sorter, if such is present.

Seems like it would take a lot of "Magnetic Oxide" as a coating -- whatever that is, to hold stones to a drum, or as a corrolary, perhaps there was enough ilmenite or magnetite --both magnetic -- to hold trap and hold the diamond stones to a magnetic drum.

I'd think it more likely there was a covering over the stones such that automated processing by x-ray sorting ran them into the rejects pile.

Be interesting to see what is released about what happened at SRC.