The amount you will lose selling a diamond depends on several factors, including the quality and characteristics of the diamond, the current market demand and prices for diamonds, and the method of sale.
In general, you can expect to receive a lower price for a diamond when you sell it compared to the price you paid for it. This is because the diamond market is highly competitive, and buyers will typically offer a lower price to ensure they can make a profit when they resell the diamond.
If you sell your diamond through a jeweller, you can expect to receive a lower price compared to selling it through a private sale or auction. Jewellers typically offer a lower price because they need to make a profit on the resale of the diamond, and they need to cover their overhead costs.
To get a better idea of how much you can expect to receive for your diamond, you may want to have it appraised by a certified appraiser or seek the advice of a reputable jeweller. They can give you an estimate of the diamond’s value based on its characteristics and the current market conditions. The DCLA. GIA, HRD and IGI are a good place to start the process.
One of the biggest factors affecting the resale value of a diamond is its quality.
Diamonds are graded based on their cut, colour, clarity, and carat weight, and diamonds with higher grades will generally command higher prices than those with lower grades. Other factors that can affect the resale value of a diamond include its shape, rarity, and the current demand for diamonds in the market.
Adele has sparked speculation she is engaged to her beau Rich Paul after she was spotted wearing a huge diamond ring.
The singer, 34, and her sports agent partner, 41, have been dating for two years and are thought to be planning a summer wedding this year.
Rich reportedly popped the question with a dazzling ring, which has been estimated to be worth a massive $1million (£830,000).
Adele was seen wearing the sparkler on her wedding finger at her latest Las Vegas show over the weekend.
The stunning piece of jewellery features a pear-shaped diamond in the centre of a sparkling silver band.
A jewellery expert has estimated that the ring is approximately 10 carats and comes with a very hefty price tag.
“This one looks sparkly on all fronts, and makes us believe it would be very high quality indeed,” Apeksha Kothari diamond expert from Rare Carat said.
She told PageSix that the ring could be “close to the $1million mark.”
Another expert told the publication: “There’s no doubt that finding a fancy cut diamond of this size took lots of time and careful selection.”
Singing sensation Adele has been wearing the dazzling ring for over a year now, after she debuted it at the BRIT Awards in 2022.
Diamond Colour is one of the 4c’s used to calculated diamond value
Polished diamond prices are derived from a variety of factors, including supply and demand, the quality and characteristics of the individual diamond, and market conditions.
The prices of polished diamonds are primarily determined by the 4Cs: carat weight, colour, clarity, and cut. These factors are assessed by gemologists and other experts who evaluate the diamond’s physical properties, such as its size, colour, clarity, and overall quality of cut.
Other factors that may influence the price of polished diamonds include the type of diamond, such as whether it is a natural or lab-grown diamond, the country of origin, and the overall market conditions for diamonds. Additionally, the reputation and credibility of the seller or the dealer can also affect the price of the polished diamond.
Overall, polished diamond prices are determined by a complex combination of factors, and can fluctuate over time based on changes in supply and demand, market conditions, and other economic and industry factors. There is no single diamond price list that accurately reflects the prices of all diamonds. This is because the price of a diamond depends on a number of factors, including its size, shape, colour, clarity, and other characteristics.
That being said, there are various industry-standard diamond price lists that are commonly used as references by professionals in the diamond trade. These lists are typically based on a standardized grading system and provide price ranges for diamonds of different sizes, shapes, and quality grades.
The most commonly used diamond price list is the Rapaport Diamond Report, which provides a benchmark price for diamonds based on their 4Cs grading (carat weight, colour, clarity, and cut). However, it is important to note that the Rapaport price list only reflects the wholesale price of diamonds and may not necessarily reflect the retail price that consumers will pay.
Other diamond price lists include the International Diamond Exchange Price List, the Idex Diamond Price Report, and the Polished Prices Diamond Index, among others. These price lists may differ in their methodologies and grading systems, and the prices they list may vary slightly from one another.
Ultimately, when buying or selling a diamond, it is important to work with a reputable and knowledgeable diamond professional who can help you evaluate the diamond’s characteristics and provide you with an accurate price estimate based on current market conditions. Source: Michael Cohen DCLA
Trading in or selling a diamond or diamond ring, typically involves finding a reputable diamond buyer or dealer who will purchase the diamond from you at a fair price. Here are some steps to consider when trading in a diamond:
Determine the value of your diamond: Before you approach any diamond buyer, it’s important to have an idea of what your diamond is worth. You can get an estimate by researching the 4 Cs of diamonds – carat weight, cut, clarity, and color – and comparing your diamond to similar ones online or in stores.
Find a reputable buyer: Look for a reputable diamond buyer or dealer who has been in business for several years and has a good reputation. You can check reviews online, ask for recommendations from friends or family, or visit your local jewelers to find a reliable buyer.
Get a diamond grading report: A diamond grading report is an independent evaluation of your diamond’s quality and characteristics. Having a grading report from a reputable laboratory like GIA, HRD. IGI, DCLA or AGS can help you get a fair price for your diamond.
Negotiate the price: Once you have found a buyer, negotiate the price based on the value of your diamond and the current market conditions. Be prepared to walk away if the offer is too low or doesn’t meet your expectations.
Complete the transaction: If you agree on a price, make sure to get a receipt or invoice for the transaction. You may also need to provide proof of ownership and identification.
Overall, trading in a diamond requires research, patience, and careful consideration to ensure that you get the best possible price for your diamond.
Diamonds come in a variety of shapes and cutting styles, here are some of the most popular:
Round: This is the most popular diamond shape, accounting for more than 75% of all diamond sales. A round diamond has 58 facets and is designed to maximize its brilliance and fire. Princess: This square-shaped diamond is a popular choice for engagement rings. It has pointed corners and is designed to sparkle brightly. Cushion: Also known as a pillow cut, this diamond has rounded corners and larger facets that enhance its brilliance. Oval: An elongated shape with rounded edges, oval diamonds are often used in solitaire engagement rings. Marquise: This diamond has a pointed, football-like shape that can elongate the finger of the wearer. Pear: Also called a teardrop shape, this diamond combines the round and marquise shapes and is often used in pendants and earrings. Emerald: This rectangular-shaped diamond has step-like facets that create a unique visual appeal. Asscher: Similar to an emerald cut, the Asscher cut is square with cropped corners and larger step-like facets that give it a unique vintage look. This cut has a pointed culet. Radiant: A square or rectangular diamond with cropped corners and a brilliant cut. Heart: As the name suggests, this diamond is shaped like a heart and is often used in pendants and earrings.
This is a sample selection of the most popular and traditional shapes. There are many more shapes and cuts.
Not all shapes are price the same: The most expensive shape of a diamond depends on several factors such as the quality of the diamond, its carat weight, and the market demand. However, generally speaking, round brilliant cut diamonds tend to be more expensive compared to other shapes, all else being equal.
This is because round diamonds are the most popular and in-demand shape, and the manufacturing process to create a round diamond involves cutting away more rough diamond material than other shapes, resulting in higher wastage. Additionally, the round brilliant cut is designed to maximize the diamond’s fire and brilliance, making it a very desirable choice for many people.
However, the price of a diamond ultimately depends on its unique characteristics and the market demand at the time of purchase.
Diamond of the same exact weight can look very different depending on the proportions and the shape Diamond shapes that have larger surface area or table size relative to their weight will generally appear larger for their carat weight.
Therefore, diamond shapes that have a shallow depth or a large table are likely to appear larger than other shapes of the same carat weight. Here are some diamond shapes that are known for appearing larger for their carat weight: Pear-shaped diamonds: The elongated shape and pointed end of a pear-shaped diamond give the appearance of a larger diamond. Oval-shaped diamonds: Similar to pear-shaped diamonds, the elongated shape of an oval-shaped diamond can make it appear larger than other shapes of the same carat weight. Marquise-shaped diamonds: The football-like shape of a marquise diamond can also make it appear larger for its carat weight. Princess-cut diamonds: The square shape of a princess-cut diamond means that it has corners, which can make it appear larger than a round diamond if not cut with a depth over 70%. Emerald-cut diamonds: The step-cut faceting of an emerald-cut diamond can make it appear larger, even though it has a smaller surface area than other shapes of the same carat weight.
Diamcor Mining has announced the recovery of a 72.53 carat gem quality rough diamond and reports the initial sale of 1,466.12 carats of rough diamonds during the current quarter from the processing of quarry material at the company’s Krone-Endora at Venetia Project.
The sale of the 1,466.12 carats of rough diamonds generated gross revenues of US$294,696.73, resulting in an average price of US$201.00 per carat.
The 72.53 carat gem quality special rough diamond recovered by the company is currently being offered for tender and sale in Dubai and is expected to offset the lower-than-expected total carats sold in the initial sale of the quarter. Additional rough diamonds recovered to date during the period are being held as stock on hand for later tender and sale.
“The recovery of yet another larger gem quality 72.53 carat rough diamond demonstrates the project’s continued potential to contain these higher value rough diamonds even while operating below the Project’s processing capacity”, stated Dean Taylor, Diamcor CEO.
“I am confident the implementation of the power supply back-up systems will provide improved power consistency needed for the processing plant to reach its designed potential.”
Initial Tender and Sale of Rough Diamonds. The total number of carats of rough diamonds initially tendered and sold in the current quarter at 1,466.12 was lower than anticipated due to widely reported increases in daily load-shedding / power outages throughout South Africa. The company recently announced it is in advanced discussions on objectives aimed at reducing the impact of this load-shedding for the long-term.
Strong Average Dollar Per Carat Continues. With the project’s high percentage of gem quality diamonds to date, the average dollar per carat continued to remain in line with company expectations and achieved a strong average dollar per carat of US$201.00.
Recovery of Large Gem Quality Rough Diamond. The recovery of a 72.53 carat diamond, another large gem quality rough diamond in the specials category (+10.8 carats), continues to confirm the potential for these types of large rough diamonds to be recovered from the project’s deposits and provide a positive impact to gross revenues.
Current Rough Diamond Recovery. The company recovered approximately 1,500 carats of rough diamonds during this period which are currently being held as stock on hand. These rough diamonds, along with additional rough diamonds recovered prior to March 31, 2023, will either be tendered and sold in the quarter’s final tender and sale, or held as stock on hand at the end of the current period, and tendered in the company’s next quarter.
Advanced Discussions on Procurement and Installation of Power Systems. The company’s operational team has operated this past year within the constraints of the well documented power supply issues in South Africa with the objective to find the right solution to mitigate the impact load-shedding has had on the Project. The company is in advanced stages of discussions on procurement and the installation of back-up power systems.
Diamond traceability refers to the ability to track the journey of a diamond from its source to the market. This includes tracing the diamond’s origin, the path it takes through the supply chain, and the ultimate destination where it is sold to consumers.
Diamond traceability is important for a number of reasons. For one, it can help ensure the ethical and sustainable sourcing of diamonds, by allowing for greater transparency and accountability in the supply chain. This can help prevent the trade of conflict diamonds, which are used to finance armed conflict and human rights abuses. Additionally, diamond traceability can help provide assurance to consumers that the diamonds they purchase are of high quality and have been sourced responsibly.
The diamond industry has established various initiatives to promote diamond traceability, including the Kimberley Process Certification Scheme, which aims to prevent the trade of conflict diamonds, and the Responsible Jewellery Council, which sets standards for responsible sourcing practices in the industry. Additionally, some diamond producers have implemented blockchain technology to enable the secure tracking of diamonds throughout the supply chain.
Certification is another key aspect of diamond traceability. By obtaining a diamond certificate, which includes a record of the diamond’s characteristics and its journey through the supply chain, consumers can be assured that the diamond they are purchasing is of high quality and has been sourced responsibly. Overall, diamond traceability is an important aspect of the diamond industry, as it can help promote responsible sourcing practices and provide assurance to consumers about the quality and authenticity of the diamonds they purchase.
While it may not be possible for an individual to physically track a diamond from the source, certification and other industry initiatives can help ensure the ethical and sustainable sourcing of diamonds, as well as provide assurance to consumers about the quality and authenticity of the diamonds they purchase.
One technique used to determine the origin of diamonds is through the analysis of their chemical composition. Diamonds from different geographic locations can have different trace elements and isotopic compositions, which can be used to identify their origin. For example, diamonds from different mines in South Africa can have different isotopic signatures.
Another method to determine the origin of a diamond is through the use of spectroscopy, which involves analyzing the unique spectral characteristics of a diamond. This can provide clues about its origin and the geological conditions under which it formed.
It’s worth noting that while these techniques can provide clues about a diamond’s origin, they are not foolproof and may not provide a definitive answer in every case. Nonetheless, advances in technology and the diamond industry’s commitment to responsible sourcing have made it increasingly possible to track and trace diamonds from their source.
Rio Tinto to spend $40m on Diavik diamond mine expansion
Rio Tinto is going ahead with a $40 million expansion of its iconic Diavik diamond mine in the Northwest Territories of Canada, which will extend the operation’s life to at least early 2026.
The approved first phase of the project will expand diamond extraction underground, below the existing A21 open pit. Mining of that area, opened in 2018, recently concluded.
A second phase an additional cost will be put forward for approval in 2024, Rio said.
Phase one below A21 is slated to produce an extra 1.4 million carats, with phase two adding another 800,000 carats.
“This is good news for our employees, partners, suppliers and local communities in the Northwest Territories,” Sinead Kaufman, Rio Tinto Minerals’ chief executive, said in a statement.
Rio Tinto became in 2021 the sole owner of the operation, after buying the 40% share held until then by Dominion Diamond Mines.
The company has operated Diavik since production began in 2003. Located approximately 300 km north-east of Yellowknife, the mine employs over 1,100, of which 17% are Northern Indigenous people.
Diavik is Canada’s largest diamond mine in terms of production with between 6 and 7 million carats of rough diamonds produced each year. Since mining began in 2003 Diavik has produced over 100 million carats of diamonds.
The Northwest Territories’ two other diamond mines – Ekati, operated by Arctic Canadian Diamond and De Beers-Mountain Province’s Gahcho Kué – are expected to close in 2024 and 2028, respectively.
Diavik is about 30 km southeast of Ekati, and Gahcho Kué is 125 km southeast of Diavik.
Conflict diamonds, also known as blood diamonds, are diamonds that have been mined in war zones and sold to finance armed conflict against governments. These diamonds are typically mined under inhumane conditions by workers who are often forced to work in dangerous and exploitative conditions. The profits from the sale of these diamonds are then used to fund armed conflicts, which often involve violence, human rights abuses, and forced labor. This cycle of violence and exploitation is known as the “diamond curse.” To combat the trade in conflict diamonds, the international community has established the Kimberley Process Certification Scheme, which requires that all rough diamonds be certified as conflict-free before they can be sold on the international market. The Kimberley Process has helped to significantly reduce the trade in conflict diamonds, but concerns remain about the effectiveness of the scheme and the ongoing trade in illicit diamonds.
What percentage of diamond production are conflict diamonds The percentage of diamond production that can be considered conflict or blood diamonds has decreased significantly since the introduction of the Kimberley Process Certification Scheme in 2003. According to the Kimberley Process, the percentage of conflict diamonds in the global diamond trade has fallen from approximately 15% in the 1990s to less than 1% today. However, it is important to note that some critics have raised concerns about the effectiveness of the Kimberley Process in preventing the trade in conflict diamonds. They argue that the definition of conflict diamonds used by the Kimberley Process is too narrow, and that some diamonds mined in areas of conflict may still be entering the market through illegal channels. Furthermore, there have been reports of human rights abuses and unethical practices in diamond mining in countries that are not considered conflict zones. So while the percentage of conflict diamonds in the global diamond trade is believed to be low, it is important to remain vigilant and continue efforts to ensure that all diamonds are mined and traded ethically and responsibly.
How do i ensure the diamond i buy is conflict free To ensure that the diamond you buy is conflict-free, you should look for a diamond that has been certified as such by a reputable organization. The most widely recognized certification scheme for conflict-free diamonds is the Kimberley Process Certification Scheme (KPCS), which was established in 2003 to prevent the trade in conflict diamonds. Here are some steps you can take to ensure that the diamond you buy is conflict-free:
Buy from a reputable jeweller: Look for a jeweller that is committed to selling conflict-free diamonds and has a policy in place to verify the origin of their diamonds. Many jewelers are members of organizations that promote ethical and responsible diamond sourcing, such as the Responsible Jewellery Council or the Jewelers of America.
Ask for a certificate of authenticity: Ask your jeweller for a certificate of authenticity that verifies the origin of the diamond you are interested in buying. The certificate should state that the diamond is conflict-free and has been mined and traded in compliance with the Kimberley Process.
Look for laser inscriptions: Some diamonds may have a laser inscription on the girdle that indicates the origin of the diamond and its certification number. This can be a helpful way to verify the diamond’s origin and ensure that it is conflict-free.
Consider buying a lab-grown diamond: Lab-grown diamonds are an ethical and sustainable alternative to mined diamonds. They are produced in a laboratory using advanced technology and do not have the same environmental or social impacts as mined diamonds.
By taking these steps, you can help ensure that the diamond you buy is conflict-free and has been mined and traded in a responsible and ethical manner.
Argyle pink diamonds are extremely rare and highly sought-after, making them some of the most valuable diamonds in the world. The Argyle diamond mine in Western Australia is the primary source of pink diamonds, and it is estimated that only 0.01% of the diamonds recovered from the mine are pink in colour, with an even smaller percentage being of the highest quality.
The Argyle mine ceased operations in 2020, which has led to speculation that the prices of pink diamonds, including argyle pink diamonds, may increase in the coming years. With the mine no longer producing new stones, the limited supply of these rare diamonds is expected to drive up demand and prices. However, like any investment, it’s important to carefully consider market trends and consult with a qualified professional before making any decisions.
The largest pink argyle diamond found to date is the Argyle Pink Jubilee, which was discovered at the Argyle mine in Western Australia in 2011. The diamond weighs 12.76 carats and is a vivid pink colour, making it one of the largest and most valuable pink diamonds ever found. The Pink Jubilee was cut and polished over a period of ten months, during which time the rough diamond was studied and analyzed extensively to determine the best way to bring out its natural beauty and maximize its value. The diamond was sold at auction in 2013 for an undisclosed sum, but it is believed to have fetched a record-breaking price per carat for a pink diamond.
Red diamonds are extremely rare, even more so than pink diamonds. It is estimated that only a handful of natural red diamonds are found each year, and most of them are less than half a carat in size. Red diamonds are so rare that many jewelers and gemologists may go their entire careers without ever seeing one.
The red colour in diamonds is caused by the presence of a rare mineral which causes “graining,”, This occurs when the crystal structure of the diamond is distorted during its formation. The graining causes the diamond to absorb green light and reflect red light, resulting in a beautiful and distinctive red hue. Because of their rarity, red diamonds are among the most valuable and expensive gemstones in the world. They are highly sought-after by collectors and investors, and prices for top-quality stones can reach millions of dollars per carat at auction.
Blue diamonds are also quite rare, but not as rare as pink or red diamonds. Blue diamonds account for only about 0.02% of all diamonds mined worldwide. The blue colour in diamonds is caused by the presence of trace amounts of boron during their formation, which causes the diamond to absorb red, yellow, and green light, resulting in a blue hue.
Blue diamonds are highly prized for their unique colour and rarity, and they can command very high prices at auction. The value of a blue diamond depends on a variety of factors, including its size, colour intensity, clarity, and overall quality. Blue diamonds range in colour from pale blue to vivid blue, with the most valuable stones being those with a deep, rich blue colour.
One of the most famous blue diamonds is the Hope Diamond, which is a 45.52-carat blue diamond that is part of the Smithsonian Institution’s collection of natural history specimens.
The most expensive diamond ever sold is the Pink Star, a 59.60-carat oval-cut pink diamond that was sold for $71.2 million at a Sotheby’s auction in Hong Kong in 2017. The diamond, which is the largest internally flawless fancy vivid pink diamond ever graded by the Gemological Institute of America (GIA), was mined in Africa in 1999 and took two years to cut and polish.
The Pink Star was originally sold at auction in 2013 for a record-breaking $83 million, but the sale was later cancelled after the buyer defaulted on the payment. The diamond was put back up for auction in 2017 and sold to a jewelry retailer in Hong Kong for $71.2 million, setting a new world record for the most expensive diamond ever sold at auction.
Yellow diamonds are not as rare as pink, red, or blue diamonds, but they are still considered rare and highly prized. Yellow diamonds are formed when nitrogen atoms are trapped in the crystal lattice structure of the diamond during its formation, causing it to absorb blue light and reflect yellow light.
The intensity of the yellow colour in a diamond can vary widely, ranging from a pale yellow or light lemon colour to a deep, intense yellow. The most valuable yellow diamonds are those with a deep, rich colour that is evenly distributed throughout the stone.
Yellow diamonds are mined in various parts of the world, including South Africa, Australia, and Canada. While yellow diamonds are not as rare as some other coloured diamonds, high-quality yellow diamonds can still command very high prices at auction, especially those with a large carat weight and intense colour.
Orange diamonds are considered rare and highly valuable. The orange colour in diamonds is caused by the presence of nitrogen and other impurities in the crystal lattice structure of the diamond, which absorb blue and green light, resulting in an orange hue.
Orange diamonds can range in colour from pale orange to a deep, vivid orange, with the most valuable stones being those with a pure and intense colour. Orange diamonds are not as commonly found as white or yellow diamonds and are considered much rarer than brown or gray diamonds.
The most famous orange diamond is the Pumpkin Diamond, a 5.54-carat fancy vivid orange diamond that was mined in South Africa. The Pumpkin Diamond was sold at auction in 1997 for over $1.3 million, and it is now part of the collection at the Smithsonian Institution’s National Museum of Natural History in Washington, D.C.
Laboratory grown rough diamond type 2A carbon crystal.
The main difference between a natural mined diamond and a laboratory grown diamond is their origin. Natural diamonds are formed deep within the Earth’s mantle under extreme heat and pressure over millions of years, while laboratory grown diamonds are created in a controlled environment in a laboratory setting. Some other differences between natural mined diamonds and laboratory grown diamonds include:
Cost: Laboratory grown diamonds are generally less expensive than natural mined diamonds, as they don’t require expensive mining and extraction processes.
Clarity: Laboratory grown diamonds are generally more consistent in terms of their clarity, as they are grown under controlled conditions. Natural mined diamonds can have inclusions or blemishes, which can affect their clarity and value.
Size and Colour: Laboratory grown diamonds can be grown to larger sizes and in a wider range of colours, which may not be as easily available in natural mined diamonds.
Environmental impact: The environmental impact of laboratory grown diamonds is generally considered to be lower than that of natural mined diamonds, as mining can have a significant impact on the environment.
Rarity and Value: Natural mined diamonds are still considered more rare and valuable than laboratory grown diamonds, due to their long history and cultural significance. Ultimately, whether someone chooses a natural mined diamond or a laboratory grown diamond may depend on their personal preferences and priorities, such as environmental concerns, budget, or the desire for a natural, unique stone.
It is worth noting that both natural mined diamonds and laboratory grown diamonds are chemically and physically identical, and both can be certified and graded by independent gemmological laboratories based on the same criteria.
Nirav Modi fled India in 2018 to evade the law days before a case was registered against him and his associates.
By Press Trust of India: Gold, platinum, diamond and jewellery of Firestar Diamond International, owned by fugitive diamantaire Nirav Modi, will go under the hammer on March 25, according to a sale notice.
De Beers has increased prices of small rough diamonds for the second consecutive sight as a combination of demand and supply factors continue to create a hot market for the category.
Prices for tiny stones rose by around 10% on average at this week’s trading session, with sharper advances in certain segments, customers and insiders estimated Monday. The changes were mainly for minus-7 sieve sizes, which weigh about 0.03 carats, across a range of qualities. De Beers was unavailable for comment.
The February sale runs this week from Monday to Friday in Gaborone, Botswana.
Rough under 0.75 carats became a sought-after asset in the second half of 2022 as melee demand from luxury brands strengthened and Indian manufacturers needed cheaper material to fill factories amid thin profit margins. In addition, Western sanctions on Russian diamonds created a mixture of real and perceived shortages in those sizes, for which Alrosa is the biggest supplier. The trade is watching for potential further restrictions as the one-year anniversary of Russia’s invasion of Ukraine approaches.
“Are people preempting what the [new] measures might be on Russia? [The strong market] might have to do with that,” a rough-market participant told Rapaport News on condition of anonymity.
Last year, De Beers made only modest increases in the prices of smalls, even when the segment saw robust demand, a sightholder explained on condition of anonymity. The miner raised prices at last month’s sight by approximately 10% — alongside decreases in the slower, larger goods.
The fresh hikes caught many dealers by surprise, as they were expecting De Beers to monitor the Chinese recovery before making further price adjustments.
Group of Seven nations and the European Union are discussing ways to track Russian diamonds across borders, a move that could pave the way for restrictions on their trade in future, according to people familiar with the matter.
Previous EU attempts to sanction Russian gems have run into resistance from importer nations such as Belgium who argue that the effort would be futile because transactions will simply shift elsewhere without a mechanism to trace precious stones.
A diamond’s origin is clear at the start of the supply chain when it is issued a certificate under the Kimberley Process, which was designed to end the sale of so-called blood diamonds that financed wars. But after that they can become difficult to track.
Cut and polished stones are often intermingled at trading houses and the original certificate will be replaced with “mixed origin” documentation, making it near-impossible to keep track of where Russian diamonds are eventually sold.
The US has sanctioned the Russian mining giant, Alrosa PJSC, which accounts for about a third of the $80 billion global trade in rough diamonds. But the measures have had limited impact as much of the trade flows through other markets such as India.
The people with knowledge of the G-7 and EU discussions said a solution is not imminent, because tracing polished diamonds in a global market is extremely complicated. Still, two of the people said the G-7 could issue a statement on the matter as early as next week as part of the effort to maintain pressure on Russia as its war in Ukraine approaches the one-year mark.
It’s hard to believe that COVID first hit just over three years ago.
After the original shock that the pandemic caused, especially when lockdowns were put in place in large parts of the world in early 2020, markets, rather than continuing to crash, instead surged higher.
Stimulus programs from both central banks and central governments, which were enormous in scope, were the primary cause of this surge, with the vast quantity of dollars fed into the system leading to one of the biggest rallies in the share market, cryptocurrencies, and even real estate on record.
Since late 2021 it’s been tough going though, with the last twelve or so months particularly challenging for most investors.
Many seemingly don’t know what to do, with survey data suggesting many are stuck in terms of ideas, a subject we discuss below.
There are however always a select group of investors who do get ahead of the curve, recognise changing patterns for what they are, and act accordingly.
We think pink diamond investors fit that mould, and despite the current economic climate and investor hesitance, we’ve seen a continued appetite for pink diamonds first hand.
This is something we expect to see continue across the course of this year, as more and more investors seek exposure to this niche asset class, which has proved quite lucrative for many.
Investor uncertainty in challenging market
In early February, we read an interesting report containing six insights into the way Australians invested their money in 2022.
As we alluded to in the introduction to this week’s update, last year was very challenging for investors, with stock markets plunging quite rapidly at one point (on this note, while the Australian market fell, it fared better than most), cryptocurrencies falling by more than 50% in most cases, and even real estate turning south, with the Australian property market now on track to see its biggest decline in decades.
We also saw the return of inflation, which soared beyond 5%, and in some developed countries beyond 10%, in the fastest pace of consumer price rises seen in decades.
What did investors do in response?
Turns out much of the same, with the following chart showing that despite a few tweaks, they kept investing money in pretty much the same way they always have.
Trend: Allocation of new client inflows
In the last year, roughly what proportion of the new client inflows you advised on went into each category? Averages among financial advisers.
The only notable change looking at this, and other data in the article was an influx of money into fixed income and cash ETFs, presumably due to the higher interest rates that started to flow through across 2022.
While that’s understandable, given rising inflation, those cash and fixed income assets also lost value last year, failing to act as a safe haven in any meaningful way.
The only investors that thrived last year were those who looked through the conventional wisdom on how to invest (i.e. keep nearly all your money in stocks, bonds and real estate), and instead sought out alternative assets, which can continue to thrive in more difficult environments.
Pink diamonds were obviously one such asset, with prices continuing their steady performance all of last year, helped by the continued focus that this asset class has generated since the closure of the Argyle mine in late 2020.
With prices up more than 50% in the last two years, they are one of the few assets that have prospered throughout the entire COVID era and its aftermath, with strong supply/demand fundamentals set to support pink diamond prices, in 2023 and beyond.
Interest rates continue to climb
The Reserve Bank of Australia (RBA) met for the first time earlier this week, and as most analysts expected, they raised interest rates by 0.25%.
The increase, which marks the ninth meeting in a row that they’ve increased rates, with the official cash rate now sitting at 3.35%.
They likely have a way to go too, with the RBA at pains to point out that higher rates will likely be required to contain inflation rates which continue to surprise to the upside.
Indeed, some commentators now think that the RBA will continue to hike for most of the year, with the cash rate likely to climb beyond 4% before peaking, which will only exacerbate the pain felt by a lot of mortgage holders sitting on large debt piles.
This pain is beginning to show up in both soft and hard economic data, with retail sales now falling, while consumer confidence in Australia is plunging.
It’s also worth noting that given current inflation levels, even if the RBA does hike rates to 4%, the ‘real’ return (i.e. the rate one earns after inflation) on cash is likely to remain negative, for the foreseeable future at least.
This should help be bullish for investment demand for alternative assets, especially with home prices falling, and the share-market struggling.
Pink diamonds are set to be a particular beneficiary of this trend, as indeed they have been for some time, given their extremely limited supply, their strong performance track record, and their inflation hedging qualities, with all of these factors regularly coming up in the conversations that the team at Australian Diamond Portfolio have with our wonderful client base on an ongoing basis.
As always, we hope you’ve enjoyed this week’s edition of “In the Loupe” and we look forward to any questions or comments you may have.
Botswana’s President Mokgweetsi Masisi warned Sunday that his country could sever ties with South African diamond giant De Beers if talks to renegotiate a sales agreement prove unfavorable for his country.
The 2011 sales agreement governing the terms of marketing diamonds produced by Debswana – a 50-50 joint venture between the government and De Beers – expired in 2021.
It has been extended by the parties, who cited the coronavirus outbreak as the reason for the delay in concluding negotiations, and will end on June 30, 2023.
Speaking at a rally of his ruling Botswana Democratic Party (BDP) in his home village of Moshupa, about 65 kilometers from the capital Gaborone, Masisi warned, “If we don’t reach a win-win situation, each side will have to pack up and go home.”
Under the 2011 agreement, the mining company De Beers received 90% of the rough diamonds produced while Botswana, Africa’s largest diamond producer, received 10%. In 2020, Botswana’s share was increased to 25%.
In 2020, Botswana’s share was increased to 25%.
Today, “we got a glimpse of how the diamond market works, and we found out that we received less than we should have,” said Mr. Masisi, who spoke in both English and the local language, Tswana.
“We also found out that our diamonds are bringing in a lot of profit and that the (2011) agreement had not been favorable to us,” he added, before warning: “We want a bigger share of our diamonds. Business cannot continue as before.
Angola is aiming for a dual listing for state-owned diamond miner Endiama, reported Reuters citing Angola Mines Minister.
The country initially plans an initial public offering for a stake between 5% and 10% in the company on the Angolan stock exchange, following which it will seek a secondary foreign listing.
This move forms part of the OPEC member country’s efforts to reform and privatise the economy, including a partial listing of national oil company Sonangol.
Russian diamond mining company Alrosa has a joint venture with Endiama in Angola.
Following Russia’s invasion of Ukraine last year, sanctions were imposed by Western nations on several companies, including Alrosa, subsequently impacting Endiama’s operations.
Angola Minister of Mineral Resources, Oil and Gas Diamantino Azevedo told the news agency on the sidelines of a mining conference in Cape Town: “Sanctions are there and there is some impact.”
Azevedo said the government is considering measures required to avoid impacts on diamond production.
The minister noted that the government, however, could go ahead with an initial public offering for Endiama following its restructuring.
Azevedo said: “Our goal is (to list) till 30% but will start maybe with five or 10%.”
According to Endiama’s document at the mining conference, the firm’s production was about 8.75 million carats for 2022.
Between 2022 and 2027, Endiama intends to more than double its diamond production to 17.5 million carats.
In September 2022, Bloomberg News reported that Angola was looking to sell its 30% stake in Sonangol within the next five years.
Martin Rapaport recently released an incendiary memo to the diamond and jewelry industry calling on them to stop doing business in lab-grown diamonds (LGD), which he characterized as “synthetic” and “fraudulent.”
He also claimed those selling LGD were “operating dishonestly and unethically” and trading short-term opportunities at the expense of those that are “certain and sustainable.”
Rapaport is the ultimate industry insider, and there’s no question about which side his bread is buttered on. As chairman of The Rapaport Group, his company is a portal for information about and services to the diamond industry, including the Rapaport Price List, which it claims is the industry’s primary source for diamond price and market information, and an online diamond trading network, RapNet.
In a request for comment, a Rapaport representative shared the memo but added no additional comment.
Rapaport wrote:
“The greatest challenge facing the diamond trade is greed. Our trade is willfully destroying the underlying value of diamonds as a store of value through the marketing, promotion and sale of synthetic diamonds as a replacement for natural diamonds”
And he added, “Essentially, the diamond industry is trading short-term, unsustainable profits for the reputation of diamonds as a store of value.”
Then he went further, “Many – if not most – in our trade are operating dishonestly and unethically by failing to make full disclosure about the value retention of synthetic diamonds.”
And his memo concluded, “The Rapaport Group does not facilitate the sale of synthetic diamonds in any way. We believe they are a fraudulent product because of how they are sold. They are also a threat to the fundamental message of diamonds.”
This memo followed a submission to the Responsible Jewellery Council (RJC) in December 2021, where he pointed to Zales, James Allen, Jared, Diamond Direct (all Signet brands) and Brilliant Earth as not providing full disclosure about the LGD jewelry they sell. “Consumer expectations are not being managed honestly by unethical retailers,” he claimed.
According to lawyer Milton Springut, partner at Moses Singer, Rapaport’s disparaging and potentially injurious claims against lab-grown diamonds and the parties who do business in them probably don’t violate federal or state liability laws.
But Rapaport’s words are ill-chosen, and his claims are without merit, according to experts I spoke with.
Synthesized But No Less Real Lab-grown diamonds may be synthetic, as in made by man, but they are just as “real” as a natural diamond, as defined by the FTC. A diamond, no matter its origin is “a mineral consisting essentially of pure carbon crystallized in the isometric system. It is found in many colors. Its hardness is 10; its specific gravity is approximately 3.52; and it has a refractive index of 2.42.”
While lab-growns that meet the above criteria can be labeled as a “diamond,” the FTC also ruled that their man-made origin must be clearly disclosed.
So it requires marketers must precede the word “diamond” with “equal conspicuousness” such words as “‘laboratory-grown,’ ‘laboratory-created,’ ‘[manufacturer name]-created,’ or some other word or phrase of like meaning, so as to disclose clearly the nature of the product and the fact it is not a mined gemstone.”
It took a little while for some involved to find their footing under the new FTC guidelines, but now it seems all companies and retailers trading in lab growns have gotten on board and clearly, responsibly and honestly disclose the man-made, laboratory-grown origins of their stones.
That’s why Rapaport’s word choice of “synthetic” is over the line, implying that lab-grown diamonds are “simulants,” on the order of CZs or moissanite that may have a diamond-look, but are distinctly different in their physical properties and chemical composition.
“It’s an intentionally pejorative term because he is desperately trying to hold on to the tradition of mined diamonds,” said Marty Hurwitz, founder of market-research firm MVI Marketing LLC (THE MVEye) that specializes in the gem, jewelry and watch industries since 1987.
“One could argue using the term ‘synthetic’ may cause harm to lab-grown businesses, but it is clear that people who use the word are using it in a denigrating fashion,” he continued.
Hurwitz also notes the Gemological Institute of America (GIA), a non-profit educational and research organization that is the industry’s primary source for grading stones, doesn’t use the term “synthetic” any longer. It provided a limited grading program for lab-grown diamonds since 2007, then expanded and elevated it in 2020 as LGDs gained more industry and consumer acceptance.
GIA’s chief executive Susan Jacques described its decision as the natural evolution of the diamond market.
“We are responding to consumer demand,” she stated. “We want to make sure that consumers are educated, that we can protect their trust in the gem and jewelry industry as well as the products they are buying. As consumers adopt this new category, it’s important that we evolve with the new consumer.”
Value Is In The Meaning Rapaport’s rage against lab-grown diamonds seems to hinge on the fact that having an equivalent competing product in the market is causing the price of mined diamonds to fall. That’s the natural economic law of supply and demand.
And given that the prices of lab-grown diamonds are steadily falling, it is putting downward pricing pressure on mined diamonds too, reports diamond industry analyst Edahn Golan, though mined diamonds are experiencing a more moderate decline.
Then Rapaport goes one step further to claim that a mined diamond is a repository or “store of value” and that retaining, even increasing, its monetary value over time is part of the promise with purchase. This is patently false, both Hurwitz and Golan affirm.
“There is limited to no investment value in diamonds,” Hurwitz said. “Some categories of mined diamonds are investment grade and go up in value, but most diamonds depreciate faster than a car leaving the showroom. The average consumer has been fed a marketing myth, the greatest marketing story ever told. Most consumers never find out the truth because they don’t resell their diamonds.”
Golan added that jewelers have perpetuated the myth by offering a trade-in, so a purchaser of a $2,000 diamond ring can get that back in credit if they return to purchase a bigger, more expensive stone.
“I’m hearing the big trend in America now is for people who want to upgrade their engagement ring decide to keep their original stone and have it made into something else, like a pendant,” he said.
People hold onto their stone because of its sentimental, symbolic value, which is where the actual value lies, as Warren Buffett said, “Price is what you pay. Value is what you get.”
DeBeers tried to equate the two with its rule that a man should pay two-to-three months’ salary on an engagement ring. But ironically, that’s turned back on the industry because, with a lab grown, he can buy a bigger, more impressive stone that speaks even louder of his love for her when he pops the question.
Nothing Unethical, Fraudulent Or Dishonest Selling Lab Growns Rapaport goes too far when he suggests that there is something unethical, fraudulent or dishonest in selling lab-grown diamonds.
“The idea that diamonds are a store of value is a fundamental component of diamond demand. Consumers are being misled by retailers who sell man-made diamonds without full disclosure. The default assumption among consumers is that man-made diamonds will appreciate over time, even though the opposite is true,” he stated in his RJC filing.
One could argue that what is unethical, fraudulent and dishonest is suggesting that a mined diamond retains, even grows in monetary value.
“Rapaport is thinking like a diamond trader. Trading prices move up and down with the market. When they go up, it’s good; when they go down, it’s bad,” Golan said, noting that the increasing availability and consumer demand for lab growns is moving the needle for mined diamonds in the wrong direction.
Unlike traders, retailers think about cash flow, margins and turns. And this is where lab-grown diamonds have the edge.
“Jewelry stores hold loose diamonds on hand and the margins on loose natural diamonds is around 36%, while the margin for LGD was 54% at the end of December. And if it takes a retailer a year to sell a mined stone, but it only averages seven months to sell a lab-grown, a retailer will make more money at the end of the year,” Golan explained.
Hurwitz rhetorically asks, “Should we tell the consumers who are walking into our stores asking for lab-growns to go away? Should we say, ‘We don’t want to sell you this product that means incredibly high margins and profits for us and incredibly high value to you?’”
Retailers that trade in lab-growns are transparent and honest about the origin of their stones. The FTC requires it. There is nothing unethical, fraudulent or dishonest for a retailer to sell a customer what they want at the price they want to pay and to make money in the process.
“Half the diamonds are sold in the United States, and 50% of the business in the United States is bridal. The natural diamond industry is losing a chunk of that ‘Holy Grail’ to lab growns. The industry has to adapt to the changing world. It’s a combination of a cultural and business change that are driving each other,” Golan shared.
Can’t Turn Back The Clock “Rapaport has a tremendous self-interest in seeing the mined diamond business continue to thrive,” observed Hurwitz. “He’s trying to ensure that things never change. He wants to hold onto the tradition, but that’s futile.”
While Rapaport may be trying to valiantly to save the mined diamond industry, he may be doing more harm than good.
“The good news for the lab-grown diamond industry is that he appears to be going off the rails in his attacks, and as a result, fewer and fewer people are listening to him,” Hurwitz said.
“There is a consumer revolution happening because of lab-grown diamonds. As an industry, we must embrace the change and give consumers a choice.” he continued.
“Rapaport just wants to tell everybody that this product is good and that is bad. But the only voice that matters is the consumer. And the consumer is organically and very virally embracing this new product.”
