When you think of diamonds, what comes to mind? The brilliant shine, the luxurious appeal, or perhaps the steep price? However, there’s a lot more to this coveted gem than you may realize.
Welcome to an in-depth look at the multi-faceted diamond industry. We’re going to separate fact from fiction, and expose some little-known truths about these precious stones. From their ability to hold their value to the reality of the De Beers monopoly, let’s demystify the diamond industry.
Let’s dive into the murky depths of diamond mythology. In this section, we’ll debunk seven common misconceptions about diamonds and the industry that surrounds them.
This myth is equal parts true and false. To the naked eye, no one would be able to tell the difference. A large diamond may tip someone off that it’s fake, but it doesn’t guarantee it is.
An experienced jeweler can usually tell a mined diamond from a lab-grown diamond because the lab-grown version will look too perfect. Regular diamonds have inclusions, which are birthmarks that affect the diamond’s appearance. A lab-grown diamond won’t have them.
However, lab-grown diamond manufacturers may start to include them to make their gems look more unique. It’s for this reason that mined diamond companies are starting to make their gems traceable. They’re inserting barcodes inside to offer transparency to customers.
Founded in 1888, De Beers used to completely monopolize the diamond industry. According to this Showtime diamond doc review for the movie “Nothing Lasts Forever,” many are still under the impression that De Beers still controls 80% to 85% of the world’s rough diamond distribution.
However, this hasn’t been true since the 21st century. In 2000, the Wall Street Journal reported that De Beers would abandon its monopoly of diamond supply. At the time, they controlled 63% of the world’s diamond supply. In 2021, they held 27.5% of the world’s supply.
This number makes them second best, as ALROSA, a Russian diamond mining conglomerate, owns 28%. De Beers still owns a lot of market share, but well below the 80% they used to.
Mined diamonds have a pretty negative reputation, but there are good and bad diamond companies. Thanks to the Kimberley Process mandated by the United Nations and the World Trade Organization, all rough diamond trade is regulated to ensure it’s conflict-free.
With that said, it’s very difficult for mined diamonds to reach the same ethical standards as lab-grown diamonds can. This is because open-pit, underground, and marine mining still impacts the environment’s vegetation, soil, bedrock, water, land life, and marine animals.
Not only that, but the working conditions for miners can be especially harsh. If you want to purchase mined diamonds, research what the company is doing to protect biodiversity.
The mined diamond industry isn’t always ethical, but the National Diamond Council (NDC) is trying to change that. According to NDC data, 10 million people are involved in the diamond supply chain. This means that 10 million jobs have been created for people in all countries.
The NDC also ensures that up to 80% of rough diamond value remains with local communities thanks to social programs, local purchasing, and employee benefits. This money goes into the investment of local infrastructure. Money is also paid to the local government in other ways.
Once again, it’s very important that you do your research to ensure the company you’re purchasing from isn’t hurting the local citizens. Your due diligence will improve the industry.
Laboratory-grown diamonds are often seen as the more ethically sourced option. And while this is often the case, it’s important to note that lab-grown diamonds aren’t entirely innocent.
Lab-grown diamonds undergo an energy-intensive process, requiring a lot of resources. Approximately 60% of lab-grown diamonds are produced in China and India, but 74% of their electric grids run off of coal. This means that most lab-grown diamonds aren’t sustainable.
But, unlike mined diamonds, it’s possible for lab-grown diamonds to become entirely ethically sourced and sustainable. To get a mined diamond, you’ll always have to disrupt the earth. To get a lab-grown diamond, all you need is a machine, a few workers, and a factory.
Mined diamonds won’t hold their value or make a profit unless the diamond you have is rare or unique. A diamond may also hold its value if it was purchased at a low cost. On average, a mined diamond will resell for 25% to 50% of its purchase value, so you’ll often lose money.
Unlike gold, diamonds can’t be melted down and reshaped, which also makes them harder to reuse or resell. A person who wants to buy a diamond will likely want a new or custom piece.
There’s this idea that mined diamonds hold their value because they’re rare, and because the Earth can’t produce them fast enough, they get rarer over time. However, a diamond’s value is more tied to the cost of mining, clever marketing practices, and its history with royalty.
There are two big rumors that are often repeated regarding the world’s diamond supply. One is that companies are stockpiling supply. Another is that companies are getting rid of supply.
We know that companies aren’t stockpiling diamonds based on the evidence. According to Bain & Company, reported diamond inventories have declined by 40% in 2021.
It’s possible to burn diamonds to the point they vanish if placed in an oven with a temperature of 763º Celsius (1405º Fahrenheit). However, this rumor that companies are getting rid of supply to drive up prices has no weight. There isn’t any evidence that this has ever happened.
That’s the glittering world of diamonds for you, as raw and real as we could reveal.
But remember, our journey doesn’t stop here. We encourage you to dig deeper, ask questions, and never stop learning about the realities of this fascinating industry. Share this enlightening read with someone who might also be under the spell of diamond myths.