Beauty, durability and rarity are necessary attributes for a stone to be termed precious. Some 40 years ago though, an army of Indian workmen turned what were until then just industrial supplies, into gem diamonds for the masses. Suddenly, diamonds weren’t the scarce prerogative of a wealthy few – everyone could own one at a very affordable cost.
But the illusion of diamonds the ultimate symbol of love grew. It not only expanded demand, it continued to push diamond prices up despite their now easy availability.
In the last few years, however, rough supply has remained flat, unable to meet the ever increasing global consumer demand. Scarcity has driven up prices at an astonishing rate. Mines can make as much as 90 per cent profit. And diamonds are going to be scarcer in the future. Mining giant BHP Billiton wants to stay in the diamond business because there is going to be a widening gap between supply and demand as the world’s really big mines begin petering out.
Just at this moment though, synthetic diamond production technology has come to the stage where economically viable mass production is possible – at prices that are sometimes as much as 70 per cent less than natural diamonds. But they are a different product after all, so why should the natural diamond industry worry?
The problem is, synthetics could take over the illusion. It is easy enough to understand that readily available synthetics, if fraudulently sold as scarce naturals, could destroy consumer confidence in the whole illusion. But there is more to it than that. Synthetics possess attributes that today’s generation values – you don’t have to mine in some pristine wilderness to get them and best of all, you can be sure they haven’t been mined by terrorised women and children, some of them cruelly mutilated to ‘encourage’ the others. A girl could well approve of being given a synthetic for just these reasons.
Such a change in preference wouldn’t affect anyone in the diamond pipeline except for the miners and a handful of specialist rough dealers. It would, in fact, solve many of the issues the global industry is trying to cope with today. Scarcity may not be such an important attribute for a precious stone after all.
De Beers may have come to the same conclusion. And they are prepared for the day the diamond illusion is embodied by synthetics. Even if consumers don’t turn away from naturals, the mines could all run completely dry in some years. They have some of the most advanced synthetic diamond technology today. In a world without any natural diamonds, De Beers would be as big a player as it is today.
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