Diamonds are breathtaking. That is undeniable. They have that allure and elegant sparkle that simply catches your eye and refuses to let go. Imagine that on a fine piece of jewelry on your hand, finger, or neck. You would make a statement.
But is that why they are so expensive?
Diamonds have an interesting and unique set of properties, only common to them. For instance, they are the hardest known material on the earth’s surface, hence most durable. They also have a high light dispersion rate that produces the sparkle we adore.
No
Understanding the current valuation of diamonds demands a sneak peek of the industry’s history.
Diamonds have been a part of society for extensive durations in history. Traditionally, they were used as status symbols for wealth and prosperity, adorned by the elite class. This feat contributed greatly to their perception and positioning as the most desired gemstones, especially as they radiated such beauty to the onlooker’s eyes. The supply couldn’t match the great demand for diamonds that ensued; hence the price remained high.
With the primitive mining methods of the early centuries, diamonds remained rare until the 18th century, when a rare discovery threatened to weaken its position and price in the market.
According to Edward Jay Epstein - a leading expert in the diamond industry - In his interview with Power Line, a team of mining prospectors, during their activities in Kimberly, South Africa, came across a mine with an enormous trove of diamonds. This discovery threatened the global price of diamonds through extensive supply.
Here is the interesting fact, the enormous demand for diamonds and their price today is a consequence of the actions of a company called De Beers, through the De Beers mining syndicate/cartel.
Scared of the effect and consequences of the discovery on the market, De Beers bought the mine in a bid to regulate the global supply of diamonds and maintain the high price.
And it worked.
Stereotypes about Diamonds
For instance:
That Diamonds are rare
The truth is that they are not rare. Diamonds are found in larger deposits relative to other gemstones such as Sapphires and rubies. Rather, diamonds with the features and qualities to be used as jewels are rare. Scientists estimate the proportion of jewel-standard diamonds to be only about 30 percent of the total diamond supply.
Additionally, only the colored diamonds (such as the pink diamonds) are in limited supply.
That the biggest diamonds are the most expensive
Many people often obsess over the size of a diamond relative to its other qualities. That is why you may encounter people comparing rings based on diamond sizes. The truth is that the size of a diamond is not the only measure of its quality and value.
There are other factors that influence the gemstone’s price, such as the Gemological Institute of America’s 4 Cs for grading diamonds; Cut, Color, Clarity, and Carat. The Carat, associated with a diamond’s size, is only a component but does not exclusively determine the price. Diamonds are graded based on a combination of the properties and ranking on the different variable’s scales.
So why are diamonds expensive?
It is from a combination of all the above, our traditions and lifestyles being key contributors.
Other factors influencing a diamond’s price
Outsourcing from wartorn regions
Otherwise known as ‘blood diamonds.’ These are the diamonds bought from countries experiencing civic unrest, such as the Democratic Republic of Congo, such that members of the population [including men, women and, children] could be forced to work in mines for meager or no pay. The proceeds from sales could then be used to fund more conflict and bloodshed. Despite measures to combat these diamonds’ sales, they may still make their way to offshore markets for a steep price.
The cost of mining
Mining diamonds requires the use of expensive equipment, technologies, and expertise owing to their position in the earth’s crust. The diamond refinery process is also costly, and as the cost is transferred to the end-user, diamonds are sold for high prices.
It is important to note that diamonds are incredibly gorgeous gemstones, and their history does not demean the gem’s value, nor should they hinder your desire to adorn them. Why? Because there are clean diamonds with no conflict history in the market. Also, with the onset of newer technologies, there are industrially manufactured diamonds with no observable difference from mined diamonds sold for a smaller price tag. These are also more environmentally friendly.
As such, you can enjoy the sparkle of your diamond with a peaceful mind. Just be keen to inspect the diamond certificates on purchase.
There are many different variables involved in grading and forming the end price of the diamonds you receive, along with centuries-old traditions and practices. While there are both Industrial and jewel grade diamonds in the market, this article focuses more on jewel grade diamonds for adornment.
Stay tuned for an interesting fact about the diamond industry and the truths to many stereotypes you may have formed about the precious stones.
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