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Are diamonds really rare and limited in their supplies???

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Information about Are diamonds really rare and limited in their supplies???

Published on June 7, 2016

Author: JohnMRiggs2

Source: slideshare.net

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1. Are Diamonds Really Rare And Limited In Their Supplies? Apart from being the hardest substances on Earth, most people tend to believe that diamonds are rare. But how rare are diamonds really? Is it purely an advertising hype to generate feverish demand for limited supplies so that dealers can sell jewelry at premium prices? As it turns out, we have to look at this subject from more than one perspective in order to answer this question. How They Form And How Are They Mined? Diamonds And Carbon It is popular belief that diamonds are formed from pieces of coal under high pressure and high temperature. Back when I was a kid, I clearly remembered how Superman crushed a piece of coal in his hands and transformed it into a diamond in a snap. The truth is rather far from that and Hollywood is the main culprit to blame for such beliefs. In fact, most diamonds are older than Earth’s first plants and vegetation, which were the source of today’s coal. The leading theory which is widely accepted by scientists and geologists is that diamonds were formed millions of years ago deep within the Earth’s mantle. They were later brought to he surface by violent volcanic eruptions and cataclysmic plate movements. Geologists usually seek the traces of these eruptions (called pipes) to survey spots where they could set upprofitable diamond mines. Did you know that even if surveyors found excellent deposits at a particular site, mining companies still have to sieve through thousand of tons of earth just to yield a carat of the precious gem? More importantly, only a very small percentage of these roughs are gem-quality and suitable for jewelry use. That’s the truth. Diamonds aren’t rare; it is the gem-grade diamonds worthy for jewelry purposes that are lesser in supply. Well then, what happens to the rest of the mined diamonds? Instead of finding their way into the jewelry industry, the majority of rough stones are actually used in different commercial industries and high tech applications. What Are Cartels Like De Beers And Why Do We Need Them? Reading through the previous paragraph, some of you might have felt that every single diamond is truly “one in a million”. With all the advances in our technology, the burden of mining, cutting and marketing acarat of first-class diamond has been reduced drastically.

2. From an economic viewpoint, did you know that the current diamond supply far exceeds its demand? Exploration for new mines and sources like the asteroid crater in Russia and the secret stockpile of diamonds held by the Russians can severely undermine the industry if a flood of supply was to hit the market. Huge rough diamonds of over 50 carats from Russia’s Yakutia mine. Credits: Reuters Currently, the production of rough stones is larger than what the general market needs. To avoid a huge influx of supply and declining prices, massive corporations like De Beers play a huge role in shaping the diamond industry by controlling the distribution of uncut rough stones. Unlike the past where the rough market was a single channel pipeline controlled solely by De Beers, new channels via Alrosa, Rio Tinto and independent diamond trading companies owned by Lev Leviev had emerged in recent times. Thanks to their combined “efforts” of releasing and controlling supply, the prices of diamonds are inadvertently kept stable and the market doesn’t become saturated. With the implementation of smart marketing, the impression that diamonds are rare had always been etched into the minds of the public. I know this might sound contradictory. But, could you imagine a world where you could buy a two carat diamond for a hundred bucks – no one wants that, right? How Long Will Diamonds Still be Valuable? Sorting Rough Diamonds The quest of producing precious metals and stones has been around for centuries. Even though we haven’t mastered the technology of producing synthetic gold on a commercial scale, we have recently reached a stage where we can produce synthetic diamonds.

3. Companies like IIa Technologies, the world’s largest CVD diamond producer based in Singapore and SCIO Technologyhave grown diamonds in their labs which are almost impossible to differentiate from natural diamonds without the use of advanced analytical tools. This raises a few interesting questions. Firstly, how can distributors guarantee that the diamond you buy is a natural gemstone which has been touched by the sweat of a dozen workers and extracted from the ground? Second, how long can cartels like De Beers hold the front before synthetic and man-made alternatives inundate the market and wipe out the value which we place on diamonds? These questions are impossible to answer today. Personally, I don’t think artificial diamonds will be such an invasive force that will kill off the market anytime soon. The costs of producing artificial diamonds are still very high because the technology isn’t ripe yet. More importantly, the mindsets of consumers are unanimous in the view that synthetics cannot replace the symbolism of natural diamonds as gifts of love. What I do hope one day is that I will be able to call a few beautiful diamonds my own. And when I show them to people, I want to proudly say that these are beautiful creations of Mother Nature which had been shaped by Man’s hands. Diamonds are interesting and dignified because we treat them as rarities and not because they are actually rare. Let that remain so for a few more decades.

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