Lecture on the Global Diamond Market

Key Topics Covered

• Value and rarity of specific diamonds
• Sources and regions for diamond mining
• Key players and regions in the global diamond market
• Historical and cultural significance of diamonds
• Impact of technology on diamond cutting
• Economic impact and ethical considerations

Value and Rarity of Specific Diamonds

• Superb canary yellow diamond valued between $80,000 and $100,000 per carat.
• Intense yellow diamonds can be more valuable than white diamonds.
• Example stone of 28 carats valued around $1.8 million.

Sources and Regions for Diamond Mining

• Common sources: South Africa, Botswana, Russia, Australia, South America, and Canada.
• Specifics on Russian diamonds: very white, highly valued.

Antwerp: The World’s Diamond Capital

• 70% of the world's rough diamonds pass through Antwerp.
• Key market streets with high video surveillance.
• Major diamond groups involved in buying rough diamonds, cutting, and selling.
• A mix of historic Jewish diamond workers and new competitors (Chinese, Russian, Indian).

International Diamond Trade Dynamics

• Wars in Africa affecting diamond reputation.
• International certification procedures for ethically sourced diamonds.
• Importance of Antwerp in clean and controlled diamond trading.
• Family businesses playing a significant role in the diamond trade.
  • Example: Roby’s family business spanning multiple generations.
• Shift in diamond cutting from manual intuition to technical precision with 3D machines.

Cutting-Edge Technology in Diamond Cutting

• Ultrasonic, vibration-free polishing machines, and laser cutting devices.
• Importance of minimizing material loss in cutting
  • Average loss reduced from 50-60% to around 40%.
• Advanced software for simulating diamond cutting.

Market Segmentation and Retail

• Different market segments: high-quality jewelry, standard quality, low quality.
• Major players: Cartier, Van Cleef, Carrefour, Leclerc, Auchan.
• Diamonds sold in basic jewelry even for low prices (€49 or €50).
• Example: Retail chain selling low-quality items branded as diamonds.

Diamond Cutting and Trade in India

• Mumbai and Surat as key hubs for diamond trade and cutting.
• Labour’s shift to countries like India due to cheaper costs.
• 2000 cutting workshops in Surat with a large labor force.
• Business transactions based on mobile, word, and trust without formal documentation.

Economic and Cultural Impact

• India’s mass market driven by marriage culture where jewelry is significant.
• Economic differences highlight varying lifestyle standards.
  • Earning $2,000 a month considered substantial in India.

Ethical Considerations and Market Challenges

• Varying qualities and sources of diamonds sold in markets.
• Presence of illicit diamonds and issues with certificates.
• Example: India’s switch market handling cheapest diamonds, sometimes illicit.

De Beers and Global Influence

• De Beers: a major player controlling 80% of worldwide production.
• Sales restricted, candidates selected on merit.
• Authorized buyers examine and decide on purchases.
• Non-negotiable prices but more flexibility in rejection policies.

Russia’s Role in the Diamond Market

• Alrosa: the state diamond company in Russia.
• Challenges such as strained relations with the mining conglomerates.
• Complicated trade practices and employment issues.

Botswana's Diamond Strategy

• Mixed economy with De Beers emphasizing employment.
• World's largest opencast mine at Jwaneng.
  • Producing 10% of the world's diamonds, 80 kilos daily.
• Extensive and highly automated processing procedures.

Final Thoughts

• Diamonds represent significant economic impact and cultural importance globally.
• High-risk and high-reward industry with ongoing ethical concerns.
• Diamonds moving towards becoming a standardized economy but challenges persist.