Diamonds

Engagement Ring buying advice and recommendations

in ,

This is my advice for someone looking to buy an engagement ring. I've done a lot of research into it, and listed what I thought are the most helpful links. This is an actual email that I sent to a friend who asked for some information.

Hi ----

I was thinking about your engagement ring for ----, so I wanted to send
you some helpful information.

The best forum that we have found for diamond and engagement ring
information is www.pricescope.com
People are really knowledgable there, and willing to help. So if you
wanted to, you could make an account and post your budget, desired
ring style, etc and people will help you get a good ring that fits in
your budget.

There is also a lot of good information there. This link is to the
Diamond Guide
http://www.pricescope.com/wiki/diamonds

They also have an engagement ring tutorial so you can get familiar
with the different styles of rings, important terminology, etc
http://www.pricescope.com/wiki/engagement-rings/engagement-rings-tutorial

I would recommend doing a little research on those forums. I think
that a 10k budget is a lot, you can get a really great ring in that
range. You may even end up spending less. Jeremy originally set a 10k
budget as well, but since we decided to go with sapphires, we are
anticipating spending about 5k for the engagement ring (stone &
setting). Diamond are more expensive, but I think you can get a really
nice diamond and setting in that budget.

I would recommend starting with a 1ct diamond, round brilliant cut.
You can go up in carat size if you feel comfortable, cut I think a 1
ct is a nice place to start. Do not look at colored diamonds or "fancy
diamonds". You cannot afford it. You should also stay above I think
the G color grade, b/c below that the diamonds start looking a little
yellow. I would check this though, bc I'm not completely sure, and the
cutoff may be different based on personal preference.

I would recommend you get the setting in platinum instead of white
gold. Platinum is more durable, and will not wear as much as white
gold. Platinum will need to be occasionally polished, but what I dont
like about white gold is that it is actually a yellow gold core that
is rhodium plated so it looks white. I don't like the idea of plated
things, and people on the forums say that the rhodium plate will wear
off as early as 6 months for some people, and the ring will show
yellowish color underneath. The rhodium plating may last for a few
years for some people with less wear on their rings. Platinum will
cost more than white gold. I would budget about 2k for a nice platinum
solitaire setting, so that leaves about 8k for the stone, which is
definitely reasonable. I do not recommend yellow gold unless you know
that is what she wants. Yellow gold has fallen out of favor, and is
not "trendy".

For ideas of ring styles, I would look at bluenile.com ,
whiteflash.com , goodoldgold.com
They have a large selection of rings, so you can look and see if there
are certain styles that would be best. I would focus on the solitaire
settings, because it is a really classic style. I'm not sure what -----
means by "vintage," if she actually wants an antique ring or something
1920s style or whatever. I would go with a solitaire if you are not
sure.

Do not buy from Tiffany & Co. Do not buy from Etsy. Tiffany is way
overpriced, and Etsy quality is questionable and often overpriced. Do
not buy from Zales or Jareds or any other mall store. Overpriced and
poor quality.

I'm not sure if there are any custom diamond cutters like there are
for colored stones. I was just thinking that the supply chain is so
tightly regulated, and diamonds are so expensive, that I doubt there
are any cutters that buy diamonds to recut. You might find a diamond
cutter if you look around, but I doubt it. However, all diamonds come
with a certification that describes how well it is cut. Cut is
actually pretty important of the 4C's, bc a lot of the brilliance and
scintillation of a diamond depends on the cut.

There are some really good custom ring makers, if you want to go the
custom route. Brian Gavin (www.briangavindiamonds.com) was one that I
was looking at for a while. Another good ring maker is Leon Mege
(www.leonmege.com). Mark Morrell (http://www.mwmjewelry.com) also does
really great custom rings and has a really great style.

If you want to order a custom ring, it will be a little more
expensive, and you will have to wait around 6 weeks for the product.
Usually the process goes like this - you contact the ring maker with a
specific idea of what you want made. They will clarify with you the
details of the ring, then make a CAD rendering of the ring and email
it to you. You can indicate changes that you want from the initial CAD
rendering, and it can go back and forth like this for a few drafts
until you are satisfied. The ring maker will then create a custom ring
mold to cast the ring in, then set the diamond in it, and you are
done.

If you want to go the custom ring route, I would make sure you know
exactly what you want. I would save some pictures of ring styles
online that you want to incorporate elements of, or draw some
preliminary sketches to show the ring maker.

I hope this is helpful. I would do a little research on pricescope.com
first, then look at some engagement ring prices and styles on the
different websites I suggested. If you feel that there is no ring
style currently in production that you think ----- would like, or you
really want to give her a one of a kind unique ring, then I would
contact some of the custom ring makers. But make sure you have an idea
of what you want before you contact them, which is why I suggest
looking at sites with a nice wide selection of rings as a preliminary
step.


When you buy the ring, make sure you get it appraised and insured. You can get insurance through an additional rider on your homeowner's insurance. Or you can get a separate jewelry insurance, which may offer more coverage. Either way you will need an independent appraisal. This is important in case of theft or loss, since it is such a big purchase.


Ok, I hope that information is helpful and not too overwhelming. If I
think of anything else, I'll send it to you later.

Are diamonds really rare? Myths and misconceptions about diamonds

in ,

Are diamonds really rare? Myths and misconceptions about diamonds

Diamonds are our most popular gemstone. That hasn’t always been the case. It was only in the the last century that diamonds became regularly available. Prior to that, rubies and sapphires were the most popular gems, especially for engagement rings.

The popularity of diamonds is due primarily to the DeBeers organization. They set up the first large scale diamond mines in South Africa. Then they began one of the most successful advertising campaigns in history, convincing consumers that engagement rings should have a diamond.

With proper encouragement, the movie industry displayed their most glamorous women, draped in diamonds. They soon became a top status symbol for the rich and famous. This peaked with the Marilyn Monroe movie, Diamonds are a Girls Best Friend.

Even after winning the consumers admiration, DeBeers continued their advertising. With the discovery of diamonds in the Soviet Union, a new campaign was created to sell anniversary bands. These made good use of the small, but nice quality diamonds the Soviet Union produced.

While they have done wonderful things for the diamond industry, not everything about DeBeers is nice. As diamonds were discovered in other parts of Africa and South America, DeBeers managed to get control of the rough diamond supply. The tactics used to gain control of these rough diamond supplies are alleged to include murder and kidnapping.

DeBeers maintained monopolistic control of the diamond market for several decades. They carefully released only enough rough for current demand, while continually adjusting the degree to which the rough was made available. This caused continually escalating prices, and of course, it increased the perception of rarity. DeBeers actually mined considerably more rough diamonds than they sold and they have a large warehouse of uncut diamonds in London. As a result, they were not allowed to do business in the US, Canada, and a few other countries.

In the last couple decades of the 20th century, things began to change. Satellite technology, that was designed to find likely oil reserves, also showed the geology likely to hold diamonds. As a result, new discoveries began to multiply. Australia was one of the first developed nations to discover major diamond resources. DeBeers was able to make a deal with them do distribute all the rough, except for the very rare pink diamonds.

They also made a deal with the Soviet Union to distribute their rough diamonds. However, shortly after the break up, the Russians let their contract expire and began to sell the diamonds themselves.

The latest major diamond reserve was found in Canada. DeBeers could not make a deal with the Canadians, who are cutting and selling the stones themselves.

It is difficult to tell what the future will hold. Several sites are being explored and it is likely more diamond deposits will be found in the near future. DeBeers still controls approximately 75% to 80% of the diamond rough. The other suppliers have so far been content to sell at the same prices as DeBeers. However, if the law of supply and demand ever catches up to the diamond market, prices are likely to drop considerably. It is difficult to tell how this would play out, but DeBeers has a large inventory of uncut diamonds and would be in an excellent position for a price war.

Myths and Misconceptions

Here are some popular myths that you need to be aware of.

MYTH: Diamonds are rare.

Diamonds are the hardest material found on earth. Other than that, they hold no unique distinctions. All gem grade materials are rare, composing just a tiny fraction of the earth. However, among gems, diamonds are actually the most common. If you doubt this ask yourself; “How many women do you know that do not own at least one diamond?” Now ask the same question about other gems.

While we are still learning about the interior of the earth, current information shows that diamonds are likely the most common gem in nature. (See “Gem Formation” in our Reference Library.)

Outside the earth, diamonds are also common. A recent discover shows that some stars collapse on themselves, creating giant diamond crystals. In the constellation Centaurus, there lies a white dwarf, that has crystallized into a diamond 2,500 miles in diameter and weighing 10 billion, trillion, trillion carats.

MYTH: Diamonds are the most valuable gem.

You cannot say that one species of gem is the most valuable. To do a comparison, you need to judge gems according to size and quality. This chart is based on top quality gems in different sizes. However, note that pure red rubies are so rare there is no trade data available. The prices listed are for Burmese rubies.

Species            ½ carat        1 carat       >1 carats
Diamond        $4,300/ct    $13,600/ct    $44,500/ct
Ruby              $5,050/ct    $9,500/ct     $100,00/ct
Emerald         $5,470/ct    $9,030/ct     $23,000/ct
Sapphire      $10,000/ct    $16,000/ct    $34,000/ct
Alexandrite    $3,600/ct    $15,000/ct    $1,000,000/ct

As you can see, diamonds are very costly, but not the most expensive gem in any size. If you were to do a comparison of other qualities, the results would be similar. If you are looking to “invest in gems” you should read our article on the inner workings of the gem trade.

MYTH: Diamonds are precious.

Precious means valuable. In the 18th century a French jeweler began describing gems as either precious or semiprecious. The categories are still used in merchandising, but are frowned upon by professionals as they are nearly meaningless distinctions.

For example, garnets are considered semiprecious, but tsavorite garnets have sold for as much as $10,000 per carat. That seems pretty “precious” to me!

On the other hand, diamonds are only very valuable in their better grades and medium to large sizes. Small, low quality diamonds are available in quantity for just $1 a piece. A quick search of eBay and you will find several diamonds under $20. These are far from precious.

MYTH: Diamonds are the most brilliant gemstone.

Brilliance is determined by the cutting and the refractive index of the material. Diamonds have a very high refractive index of 2.41. Diamonds have the potential, if properly cut, to be exceptionally brilliant. However, this is nothing compared to the 2.9 RI of rutile. Not counting synthetics, there are at least 15 minerals with a higher refractive index than diamond!

MYTH: A person can make a lot of money selling diamonds.

As the Internet has continued to proliferate and GIA has established well accepted grading standards for diamonds, margins on cut diamonds have continued to be thin.

MYTH: Diamonds have more “fire” than any other gemstone.

Diamonds are know for their fire, or dispersion. This is the ability to separate white light into the color of the rainbow. Diamond has a dispersion of .044, which is quite high. However, it is a far cry from gems like rutile with a dispersion of .330!

What is a Diamond?

Diamonds are a natural mineral and they are also produced in the laboratory. Lab made diamonds are primarily used as abrasives, but they are beginning to make their way into the jewelry industry. (See “Understanding Gem Synthetics” and “Identification of Synthetic Diamonds” in our Reference Library.)

Gemologically speaking, diamonds are a mineral with a chemical composition of C, (carbon,) that crystallize in the isometric system. (See “How Gems Are Classified” in our Reference Library.)

With a hardness of 10, diamonds are the hardest substance in nature. Harder substances have been created in the laboratory, but they are extremely brittle and have no practical use. If a harder substance is ever found that does not break down so quickly, it will greatly reduce the time need to cut diamonds.

Diamonds have a refractive index of 2.41, which is very high. Being as they form in the isometric system, they do not have any birefringence or pleochroism. They have a specific gravity of 3.51 to 3.53, which is a bit more than average.

Colored Gemstones!

in ,

Colored Gemstones

The following post is a very helpful reference for purchasing colored stones. The full thread can be found at the pricescope colored stones forum.

First of all welcome to our technicolour world! :wavey:

If you've never bought coloured gemstones before, you're in for a real ride and I'm hoping that this thread may help you on your quest for your "special" one! One thing it's important to know .......... this part of PS is frequented by gemstone lovers from vendors to collectors to enthusiasts to newbies! At the end of the day, we all have opinions/likes/dislikes but ultimately you must buy what you LOVE, not what others tell you to buy! Also, don't chase the "gemstone of the month"! Typically there are trends on this board, Mahenge Spinel for a few months, followed by Spessartite Garnets, then onto Sapphires etc., but running with the pack can be boring. Don't buy because something is flavour of the month - buy because you'll wear and love it!

Believe it or not, jewellers in your neighbourhood (with some exceptions of course) very rarely have the specialised knowledge that you'll find on this forum. If a jeweller hasn't run tests on a gem and says "that's an X stone" then my advice is to take that with a pinch of salt. In order to verify what a stone is you normally have to run a battery of tests - some can be done by jewellers such as testing the RI (Refractive Index) of a stone - sometimes can be done with mounted stones but not always - but some tests really have to be conducted by a laboratory. You wouldn't let somebody tell you you had a blood disease without a blood test would you? It's the same thing!

Why is it different from buying diamonds?

If you buy diamonds - forget everything you've learned! Buying coloured gemstones is a whole different ball game. For example, when you buy diamonds, you can evaluate performance (or get a good idea) by looking at statistics, depth, girdle, table etc and by looking at scans. You can't buy coloured gemstones purely on numbers. In fact, you've already got the tools you need - YOUR EYES! Generally speaking, coloured gemstones are valued by colour first - clarity is not such an issue (more about this later)

Colour/Cut

So, colour is king! Generally speaking the more vivid a gem appears, the more valuable it is. You will see words like "tone", "hue" and "saturation" used. A table below shows what these mean and I find this visual representation good because it's something I can remember! The table below shows the colour blue but the same is true for other colours! Interestingly, a pure stoplight red is one of the most valuable colours for a gemstone and is very rare. Finding a pure red stone is probably the most difficult search! However, you may prefer lighter tones or less saturated gemstones. If you do that's fine and lucky you because actually that means you'll be paying less! Every cloud has a silver lining!

There's a bit more about this on this link you may find interesting - it's quite basic so not to traumatic to read.

Cut:

Another word you may see when discussing colour or performance is "extinction". Extinction is basically when a gemstone has lots of "black" areas - when you move the gemstone around some parts will remain black and NOTHING you do will make that change. If a gemstone has been cut so that it has extinction, it'll always have extinction! See the photo below and here's a link that discusses it in great, easily to understand, detail.

Extinction in a gemstone. Note the areas of blackness. 

Extinction in a gemstone. Note the areas of blackness. 

So what's a "window"? Well a window is when a gemstone has been cut (typically) very shallow. What you'll see is a part in the centre of the gemstone that appears to lighten or even lose all of its colour. In effect it's a window and you can see through it! Why's that bad? Well, it means the colour is not being reflected back to your eye so it's negatively impacting on the performance of the gemstone. Small windows can be disguised by using a setting that has a more enclosed basket under the gemstone (in effect it acts as a mirror that helps to reflect the light back to you). But be aware that not all settings will do this and not all windows will close. An example of gemstones with windows is in the photo below.

Windowing in a gemstone. Note the very pale area in the middle of the gem that you can "see through"

Windowing in a gemstone. Note the very pale area in the middle of the gem that you can "see through"

Often I see somebody say "should I buy this and then have it recut"? My advise is always not to unless you (a) really know what you're doing or (b) have been in touch with a cutter who has evaluated the stone and thinks a recut may be possible. This is a skill in itself and not for the faint hearted. If you do recut a stone, please be aware that it may dramatically alter the stones appearance and it may not be for the best! Also bear in mind, some of the most valuable gemstones on earth have been cut to preserve weight and so may be windowed but don't be put off buying them because you could be missing out on a real bargain!

Should I buy a "precision" cut gemstone or a "native" cut one and what's the difference? Well, this is a personal preference. Precision cut gemstones are exactly what they say on the tin and they will be cut to maximise performance. If you will only settle for perfection then this is the route for you! However, precision cut gemstones are a smaller portion of what's available on the market. The majority of coloured gemstones are not cut to precision. You will sometimes see these termed as "native" cut stones. This terminology can sound derogatory but think of it as meaning "not precision". There are native cut stones and then native cut stones! Some are cut so wonkily that you'll need to balance on one leg and tilt you head to one side with one eye closed to make the gemstone look straight! Clearly the value in such a gem will be less than one that is more pleasing to the eye. There are a large number of collectors who don't mind buying native cut stones because there are some quite beautiful ones. The most important thing is that you buy what YOU love and what appeals to you. Precision cut or native cut it doesn't matter!

Inclusions

Inclusions can be a good thing (believe it or not)! They can sometimes verify that you've got a natural gemstone and not a synthetic or lab created gem. However, there's a difference between a few inclusions and then inclusions that take over the whole stone and affect the overall beauty! "silk" is a really good example of this. Some gemstones have rutile type inclusions that make the gem look silky or hazy. It can, in some gems, make them glow incredibly! In other cases it can make a gem look murky and in need of a good clean! Unfortunately, you can't clean out internal inclusions so don't make the mistake of buying and thinking a good rub with a cloth will sort it out - it won't! Inclusions can be fascinating or they can be incredibly annoying. Again, judge what's acceptable to you.

Very few gemstones are flawless. In fact, gemstones are often listed as "types". Some gemstones are type 1, some type 2 etc. The type refers to whether they are naturally included or not. This website has a list of gemstones and what category they fall into. It's important you read this so you know what's "typical" for your chosen gem.

Durability

Surprisingly, not all gemstones are suitable for every day wear. The only ones that are considered durable enough are diamond, ruby, sapphire, alexandrite, chyrsoberyl and spinel. Most others, for one reason or another, are more prone to damage by frequent wear. Durability is not just about hardness but it's about the chemical make up of the gemstone i.e. the cleavage. If you knock some gemstones in the right place, you can split them completely in half - a bonus is you'll have a pair of earrings but it may be an expensive accident.

Make sure you research the gemstone you love. If it's lower down the MOHS scale then it's less durable and more prone to scratching, chipping and pitting. Generally, don't get gemstones near water, don't do the gardening in them, think before you change a tyre on your car and know how to clean them properly! However, if you know how to take care of your chosen gemstone then don't be frightened to buy what you like. There are many examples of people who have worn Emeralds (a softer, more brittle stone than a sapphire) for years without a problem and then others who have one for 6 months and have damaged it beyond repair.

Carat weight/Size

Is weight important? Well carat weight can certainly be important. For most gemstones, over 1ct is good. For rare gemstones such as Paraiba Tourmaline, Alexandrite, natural Rubies etc., the size of the gemstone can be phenomenally important. In more easily obtainable gemstones it's a nice to have!

Now then, we come to THE most important thing for you to know about when buying coloured gemstones! TREATMENTS!

Treatments

If you buy a Rolls Royce you expect a Rolls Royce don't you? You'd be really fed up if you found that you'd bought a Skoda in a Rolls Royce wrapping wouldn't you AND you'd paid Rolls Royce prices? Well, that's why treatments are important for you to understand. Again, this is personal. Some will accept only natural gemstones, others will accept some but not all treatments, others just don't care and want a sparkly gemstone! Who's right? Everybody! It's a personal thing again! You need to do your own research because treatments affect buying prices and values of gemstones so it's probably the key thing to deciding if you've paid a fair price.

I can't cover all treatments here but here's a few and you can always do internet searches for more information if you want to research in more detail. BE AWARE, NOT ALL TREATMENTS ARE DISCLOSED! YOU MUST ASK AND THEN VERIFY WITH A LAB REPORT IF YOU'RE BUYING AN EXPENSIVE GEMSTONE:-

Natural and untreated - gemstones are mined, cut and sold exactly as nature intended them to be! They are exactly as it says on the tin - natural. They are usually the most expensive type of gemstone and most difficult to find. Some gemstones are never or very rarely treated and so this is expected. Research your chosen gemstone to see if yours is one that is normally left alone!

Heated - Some gemstones are heated in the Earth naturally and it affects their colour, changing them from one colour to another. For example, Tanzanite is naturally a brown muddy looking gem but some, heated by the earth, comes out of the ground in a beautiful blue or purple, green or orange etc. Some gemstones are heated routinely and this is accepted. So, for example, if Tanzanite comes out of the ground brown, it's heated by man and becomes a gorgeous blue. 90% of all Tanzanite is heated in this way so it doesn't affect the price. Other gemstones like Ruby for example, is heated to improve appearance by lightening and making inclusions less visible. A heated gemstone (with the exception of gems that are nearly always heated) will be expensive but not as expensive as a natural untreated gemstone.

Oiling - Most commonly you see this term used when discussing Emeralds. Oiling goes back to Egyptian times and it's a way of infusing inclusions in Emeralds ("jardin") with an oil to make them less visible and the gem more beautiful. There are different types of oils and if you buy an Emerald in particular it's useful to know what oil or treatment has been applied because oil can dry out and make need to be re-done.

Now we come onto those treatments that are a bit more contraversial!

Fracture filling/Dyeing - Some gemstones have their inclusions filled. This treatment is not necessarily stable and putting a gemstone into a sonic cleaner can cause the gemstone to spit out the treatment leaving you with a very very ugly gemstone. Rubies and sapphires are often filled with glass, lead, and are even sometimes dyed. Is this acceptable? Well, again it's personal preference. This does affect the value/worth of the gem and therefore if you buy a gem that's been treated in this way, please make sure that you're not paying too much.

Irradiation - Some gemstones are irradiated to improve/change colour or appearance. For some it affects value (for example a coloured diamond) for others it doesn't i.e. some tourmalines are irradiated. Leaving aside coloured diamonds for a minute, in some cases this treatment isn't detectable but it is stable.

Beryllium or Lattice Diffusion - Years ago, it was discovered that adding an element into the heating process with the gemstones could actually change the colour of the gem to make it far more pleasing to look at. When this process first hit the market it only covered the surface of the gemstone so if you chipped the stone, you would see a different colour underneath! Technology has moved on and now diffusion goes right through the gemstone so even if it were to be cut, you'd see the same colour throughout. Is this a natural gemstone? Well, yes but it's a natural gemstone that has been artificially changed by man so that it's more acceptable. Typically these stones don't have much value but can look very beautiful. If you're looking for a cheap sapphire (for example) then some of the loveliest most affordable colours are diffused. Please be aware that these will not be heirloom pieces and so you shouldn't pay much for these.

Coatings - Gemstones like Topaz are commonly coated. You can find some diamonds that have been coated also. The problem with coatings are that if you scratch the gem, the coating will come off. It's not too much of a problem if you've bought an inexpensive topaz but imagine if you've bought a pink diamond thinking it's natural, scratch it and then off comes the colour!? Not good.

Verifying what you've bought

Unfortunately there are quite a few gem sellers who will not disclose treatments and this means that you could buy a gemstone for a high price when it's actually worth less. This forum has a section that has vendors commonly used by frequent posters on this board and they're named on there because they are honest sellers (some of whom frequent this board) so if you're really worried then look at what they have to offer before venturing into the world of sharks that is Ebay!

For coloured gemstones, lab reports are valuable because they will verify that you have (a) bought the gemstone you thought you were buying and not a synthetic (b) the size (c) sometimes colour will be graded (d) location if it can be proved and if you've asked for that to be included. What a lab report won't do is put a value on your gemstone. Generally speaking if you're in the US, AGL is the lab to go to for coloured gemstones. In Europe it's either Gubelin, GRS or AIGS.

So, do some research but remember, buy what you like and what's right for you might not be right for the next person but will be loved by others! Happy gemstone buying!

I'm sure I've missed some key points so follow posters, please jump in and add info!

The De Beers Diamond Cartel

in

The Diamond Cartel

History

De Beers is a private cartel of companies that dominates the entire diamond supply from mining to manufacturing to shops. De Beers was founded in 1888 by Cecil Rhodes, a British businessman. In its heyday, De Beers was active and dominant in every category of diamond mining and manufacture. They utilized open pit, underground, large scale alluvial, coastal, and deep sea mining in Botswana, Namibia, South Africa, and Canada. The company had essentially a global monopoly on the diamond industry for many decades. This lead to many allegations of price fixing and antitrust behavior that were undoubtedly true.

Cecil Rhodes got swept up in the diamond rush of 1871 in South Africa, and began buying up land claims of small mining operators. With additional British funding support, he was able to eventually become the sold owner of all diamond mining operations in South Africa.

In 1889, Rhodes negotiated with the London Diamond Syndicate, who agreed to purchase fixed amounts of diamonds at an agreed upon price. This strategic plan regulated diamond output and maintained diamond prices in London. By controlling all supply, De Beers maintained complete control of diamond prices, and could maintain them at an artificially high price level. Cecil Rhodes died in 1902, when De Beers controlled 90% of the world's diamond production.

Also in 1902, the Cullinan Mine was discovered in South Africa. This new large diamond source threatened to weaken the De Beers monopoly. The new Cullian Mine was able to produce as many diamonds as all of the De Beers mines combined, and also yielded the largest diamond ever discovered (the Cullinan Diamond, now part of the Crown Jewels of the United Kingdom).

Ernest Oppenheimer, a major force in the Cullinan Mine venture, took over chairmanship of De Beers in 1927, finally absorbing the Cullinan Mine into the De Beers fold. Oppenheimer understood the core principle of controlling the supply chain that precipitated De Beer's success, and continued running the diamond cartel with that principle in mind.

"Common sense tells us that the only way to increase the value of diamonds is to make them scarce, that is to reduce production." - Ernest Oppenheimer, 1910

Monopoly

De Beers has been using its dominant position to manipulate the international diamond market throughout the 20th century. The company has been able to successfully pressure independent producers to join its diamond monopoly. When producers refuse to join the cartel, De Beers would simply flood their local market with diamonds to drive down the price of competitor diamonds to an unsustainable level, forcing the competitor to join or go bankrupt.

De Beers additionally will purchase diamonds from other manufacturers and stockpile them in further efforts to control supply.

Changes in Business Model

After decades of control, the De Beers monopoly has begun to weaken. New diamond mines were discovered in Russia, Canada, and Australia, and these producers have decided together to distribute their diamonds outside of the De Beers cartel.

Additionally, increasing public awareness of "blood diamonds" has forced De Beers to change their business tactics to avoid bad publicity. The De Beers monopoly that was over 90% up until the 1980s has fallen to around 50% as of 2012.

The De Beers Family

The De Beers Family of Companies is involved in most parts of the diamond value chain. Companies are as follows:

  • De Beers Canada – mining

  • De Beers Consolidated Mines – mining

  • De Beers Diamond Jewellers – retail

  • Debswana – mining

  • Diamdel – trading

  • Diamond Trading Company – trading

  • Diamond Trading Company Botswana – trading

  • Diamond Trading Company South Africa – trading

  • Element Six – Advanced Materials / industrial diamonds

  • Forevermark – retail

  • Namdeb – mining

  • Namibia Diamond Trading Company – trading

De Beers is involved in every step of the supply chain from mining to trading to the retail sale of diamonds and diamond jewelry.

Advertising

De Beers has over the last century been highly successful in manipulating consumer demand for diamonds. Its most effective marketing strategy has been the marketing of diamonds as a symbol of love and commitment.

A copywriter coined the famous line "A diamond is forever" in 1947, which has been named the Best Advertising Slogan of the 20th Century. The ad campaign is regarded as one of the most successful in history and changed the general public’s perception of diamonds. No longer were diamonds seen as a gem reserved only for Royalty and the highest of society, they came to represent love, affection and faithfulness.

The Diamond solitaire is now pretty much synonymous with engagement rings 

The Diamond solitaire is now pretty much synonymous with engagement rings 

The "A diamond is forever" campaign greatly increased consumer demand for diamond engagement rings, especially large diamond solitaires. The prevailing fashion at the time was a single large diamond. However, De Beers had recently acquired mines in Russia that produced smaller diamonds less than 0.25 carats.

Faced with the problem that large diamonds were selling, but smaller diamonds were doing comparatively poorer, De Beers came up with other advertising campaigns designed to sell more diamonds, in particular the small "accent diamond." They began marketing the "eternity ring" in the 1960s. This is thin precious metal band with a continuous line of similar sized small diamonds along the circumference. The Eternity ring was marketed as symbolizing never ending love.

 
An Eternity Ring, with a continuous line of small diamonds

An Eternity Ring, with a continuous line of small diamonds

A Trilogy Ring, with a large diamond flanked by two medium sized diamonds 

A Trilogy Ring, with a large diamond flanked by two medium sized diamonds 

Another ring style popularized by De Beers, the "Trilogy Ring," consists of one large diamond flanked by two smaller diamonds, meant to represent the past, present, and future of a relationship. De Beers also introduced the idea of the "Right Hand Ring," bought and worn by women as a symbol of independence. All of these advertising campaigns had a single goal - sell more diamonds.

The De Beers advertising campaigns over the last century have been overwhelmingly successful at altering public opinions of diamonds. De Beers is the only reasons diamonds are associated so strongly with engagement rings, love, and marriage.

Traditionally, plain gold bands were used for the symbol of a wedding union. But this all changed after the DeBeers "A Diamond is Forever" campaign. Now it is expected that men propose with a Diamond engagement ring, and anything different is highly uncustomary. Diamond engagement rings are not only glamorous they have a very special meaning attached to them, they symbolise commitment and the next chapter in a couple’s life, which combined with their beauty is why they are so desirable.

‘Diamonds are a girl’s best friend,’ a phrase and song made famous by the 1949 movie Gentlemen Prefer Blondes in which Marilyn Monroe first performed the song, shows how deeply ingrained the idea behind diamonds has become in society. De Beers was not involved in the song, but I'm sure they were thrilled that the glamorous Marilyn Monroe was helping them promote diamonds.

Diamonds had attained a life of their own. They do not need De Beers marketing anymore because it was originally so successful, diamonds have become a societal norm. People unconsciously associate diamonds with love, women expect diamonds as engagement gifts, men are expected to buy diamonds. Diamonds have become so deeply ingrained, that the diamond is now self sustaining in our culture.

Although the De Beers monopoly has broken up, the company still retains 50% control of the diamond supply, and the De Beers legacy lives on.

Please feel free to leave comments or thoughts you have on the De Beers Diamond cartel. Does it make you want to look for diamond alternatives? My next post will be on sapphires and other gemstone alternatives for engagement rings!

Bonus Facts

  • Cecil Rhodes was the founder of the south African territory of Rhodesia, which was named after him in 1895. He was an ardent believer of British colonialism.
  • Rhodes University in South Africa is also named after Cecil Rhodes
  • The Rhodes Scholarship, a prestigious international postgraduate award for selected foreign students to study at the University of Oxford, was set up and funded by his estate

Interesting Article on Lab Synthesized Diamonds

in

This is a good article discussing Lab grown diamonds. It's a little dated, but still pretty good.

The ability to grow true gem-grade diamonds in a lab has been a long standing goal of science and industry, and one that has been achieved on a limited basis over the past five years.

Unfortunately most media publications are usually designed to sell articles, and thus often do not provide consumers with a true picture of the commercial reality and availability of lab-grown diamonds. Further, many sellers of diamond simulants (stones that look similar to diamond, but are not real diamond) exploit this knowledge gap as a way to deceptively sell their simulants as ''lab-grown diamonds''. As the president of a company that has been involved with both lab-grown diamonds and diamond simulants for over seven years, and having seen the confusion many of these less than factual articles have caused, I wanted to help provide customers with an industry insider assessment of what is and is not commercially available, and help educate those who are indeed looking to purchase a true lab-grown diamond. Thus, we begin a short tour of myth vs. reality in the lab-grown diamond market (circa 2007).

First and foremost, lab-grown diamonds (real diamond, but not mined) are in fact available for jewelry purchase, but on a limited basis. The significant catch though is this - when most people think of a diamond, they automatically think of white diamonds. As of October, 2007, no one is currently able to offer white (colorless) lab grown diamonds for sale on any type of production basis. Regardless of what various reporters write, the reality is only fancy color diamonds (predominantly yellow, and to a much lesser degree, pink and blue) are available.

The reason for that gap between what consumers want (white lab-grown diamonds) and what labs can deliver (mostly yellow lab-grown diamonds), is due to both commercial value and natural barriers. Lets discuss the natural barrier first - yellow diamonds are yellow because they incorporate nitrogen into their crystal structure. White diamonds are white (or clear) because they have much less nitrogen in their crystal structure. When growing diamonds, however, nitrogen is a catalyst - it significantly speeds up diamond growth, and in addition reduces defects. Thus, you can grow a 1ct (finished) yellow in roughly one week, versus growing the same size white (by restricting nitrogen) can take you 4-6 weeks (using BARS method, the default method currently). In other words, nitrogen can help you grow up to 6x as much yellow diamond as white in the same amount of production time. That''s a tough natural barrier.

The commercial barrier, is that yellow natural diamonds are worth much more than white natural diamonds. In nature, there are roughly 10,000 whites for every fancy yellow. Thus, fancy yellows command a much higher price per carat. Lab grown diamonds typically sell at a discount but are still pegged to their natural counterparts, and since yellow diamonds are worth more than whites, the absolute selling price for lab grown yellows is higher than what the market will pay for lab grown whites.

Now, if you combine the fact that labs can grow yellows much more quickly and easily than whites, and that yellow diamonds (lab grown and natural) further command higher prices than whites, you can see you have a severe dis-incentive to produce white diamonds with the current technology. White diamonds can and have been produced by labs (we have some sample photos on our website) but they are not price competitive with natural white diamonds at this time. Hence, a very big reason for why there are currently no white diamonds available for commercial sale.

These fundamental reasons are typically not explained in most published articles about lab grown diamonds, and many articles typically leave the reader with the exact opposite impression, that white lab grown diamonds are plentiful and cheap (remember the $5/ct quote from Wired magazine?). Various unethical simulant (CZ) makers have utilized this confusion to deceptively advertise their imitation diamonds as being "flawless man-made diamonds", "perfect lab-grown diamonds", etc. all for the low price of $100/ct. And based on emails we''ve received from customers, people have been tricked into buying plain CZ, after being told it was a ''lab grown white diamond'' and having seen articles discussing the advent of lab-grown diamonds being available.

There are two easy ways to avoid being suckered into unethical advertising like that. First of all, the price. To cut a 1ct finished diamond, you need between 2-3 carats of rough diamond to start. Cutters charge by the carat for their cutting work, and $100-$150/ct is a common rate. That means even if the diamond material were free, a seller would still have to charge at least $200-$450/ct just to break even on the cutting cost. And obviously, the lab grown material is not free and the seller would like to make a profit instead of break even, so if you see a seller selling ''cultured diamonds'' or ''man-made diamonds'' for less than several hundred dollars per carat, you can be assured it is not real lab grown diamond, regardless of what claims they make. Currently, lab-grown yellow diamonds are selling for around $4,000/ct. And remember, yellows are produced up to 6x faster than whites, so you are unlikely to see lab grown white diamonds selling for much less than that in the future unless someone figures out a much faster way to grow diamond.

The second way to protect yourself, for lab-grown diamonds of any size (i.e. .30ct and higher), is to only buy a lab-grown diamond that comes with a certificate from an independent lab. Just like natural diamonds, virtually all major gem labs now offer grading reports for lab grown diamonds (including, as of this year, the GIA). They are basically the same reports as they issue for natural diamonds, but with the origin listed as "lab-grown". If there is no certificate with a ''man-made diamond'' of any real size (i.e. .30ct or larger), and the seller declines to provide one when asked, then you can also be pretty sure its a simulant being called a lab-grown diamond.

Checking for the price and the grading certificate can ensure you are dealing with an ethical seller of lab-grown diamonds. We''ve seen many a customers whose hopes were dashed after we explained that the $150 pair of ''man-made diamond'' earrings they bought were in fact nothing more than deceptively advertised CZ. Don''t fall into that trap.

Another common myth about lab-grown diamonds is that all lab grown diamonds are ''perfect'' or flawless. As noted, the current default technology for growing diamonds (BARS method) is simply replicating the high-pressure and high-temperature present under the earth, and doing it above ground (sometimes with additional catalyst to lower the necessary temperature/pressure required). And just as diamonds from under the earth have flaws, diamonds grown above the earth also have flaws. It is a more correct analogy to think of growing diamonds (using current technology) as diamond-farming, rather than diamond manufacturing. Just like farming, you plant a seed, and try to optimize the growth conditions, but you no more get a perfect diamond than a farmer always gets a perfect tomato. In fact, sometimes after a week is up, the chamber is opened and no diamond has grown at all...so it is no where near the ''push a button, out pops a perfect diamond'' that many people think. Similarly, labs cannot customize how the diamond grows to be a specified shape (i.e. pear or emerald cut) - you get what you get, and cut to optimize the yield of each crystal.

That being said, it is true that most lab grown diamonds (especially yellow diamonds) are slightly harder than their equivalent natural diamonds. In yellows, this is due to the nitrogen being more perfectly dispersed, and Carbon-Nitrogen bonds are slightly stronger than Carbon-Carbon bonds. This is also one way labs with Raman equipment can detect man-made versus natural yellows - in yellow naturals, nitrogen is clumped, versus it is quite evenly dispersed in lab-grown yellow diamonds.

The next myth - lab grown diamonds can always be produced, so their prices will continue to drop vs. a natural diamonds will keep going up. Currently, gem grade, lab-grown diamonds are in fact substantially rarer than natural diamonds if you compare yearly production. While white diamonds are being mined in tens of millions of carats per year, lab grown whites are virtually non-existent except for research samples, and yellow lab grown diamond production is measured in thousands of carats. And because growing lab diamonds is still hard, prices for lab grown diamonds have slowly gone up, not down because there is only so much production available even as demand has increased due to public awareness.

One more reality about lab grown diamonds - size. Currently, most diamond growth chambers are unable to grow larger than 3ct piece of rough (sometimes 4ct) and thus, after cutting, most lab grown diamonds are 1.5ct or smaller (frequently smaller after accounting for flaws being cut out). The reason for this is that in order to grow a diamond using the standard HPHT (high pressure, high temperature) technology, you have to place an area under extremely high pressure and temperature. The larger the area you are trying to maintain these extreme conditions, the harder it gets..exponentially harder, in fact, because the pressure at the center is magnified due to leverage. The parts applying the pressure themselves have a limited lifespan, as they will eventually crack and fail, and require constant replacement. Thus, most labs have not tried to go beyond the 3ct size growth chamber as it does get exponentially harder to maintain the same pressure for a larger area, and that is one reason why no one is offering 6ct finished yellow diamonds for sale.

With the reality check done, we''ll end this article on a positive note - even with all the problems, costs and issues that still hamper lab-grown diamond production, colored lab-grown diamonds do offer people the ability to own and wear extremely high-end, fancy color, real diamonds at a fraction of the natural price. We''ll emphasize that these are still real diamonds - chemically, optically, physically, and of course will pass any test for being diamond (since it is diamond, the place where it was grown is the difference). Most lab grown colored diamonds are vivid in color, meaning they are among the most valuable color grades as compared to natural colored diamonds. For example, one of the first lab-grown diamonds we ever sold was graded a ''fancy vivid orangy yellow'', and was initially appraised as a natural diamond, valued at $65,000 by a major lab (we had informed them we were submitting a lab grown diamond btw). We then received a very panicked call the next day from the same lab, who after running a Raman analysis on it realized it was a man-made and not natural diamond (due to the nitrogen being so perfectly dispersed). We sold that same diamond for $3500. Similarly, most of our pink lab-grown diamonds also grade fancy vivid pink, and if they were mined instead of lab-grown, could sell for as high as $150,000/carat...we sell them for around $5,000/ct, but unfortunately due to low supply (production difficulties) are sold out most of the year. Nevertheless, the lucky few customers who do buy a lab-grown pink have a lot of fun walking into their neighborhood jewelry store and seeing the jaws drop. It is also usually the first time their jeweler has seen a real lab-grown diamond in person, again due to the relative rarity of true lab-grown diamonds. They are very beautiful and leave most natural fancy color diamonds (who are normally less intensively colored) looking pretty bland by comparison.

Technology continues to improve, and hopefully over the next few years, there will be additional breakthroughs in lab grown diamond technology. One of the most promising areas is growing diamonds by mimicking how they (theoretically) grow in outer space. This is by using ultra-low pressure, plasma and high temperature, often called plasma vapor deposition. Because it does not require the high pressure, chamber sizes are much larger and in theory, much larger pieces of diamond can be grown. Conditions are more controllable as well, due to the diamond growing by in a more nano-technology like environment (carbon-rich gas is shredded at the molecular level, and the carbon atoms then reassemble on the diamond seed below). The trade off is the machines to do this often run between $500,000-$800,000 each, and a host of additional problems not present in high pressure growth regimes come into play in this new growth environment..but hopefully in the future these will offer a new method for growing lab-grown diamonds.

Now that you are armed with industry insider knowledge, you''ll be able to readily avoid the scams that so many unethical diamond simulant sellers use by playing on the publics (and even the medias) ignorance of the realities of man-made diamonds. Hopefully, you''ll also realize that the constant claims that DeBeer''s or other forces are to blame for the lack of lab-grown white diamonds are not true (there are in fact real natural and commercial barriers to it). Finally, you''ll hopefully have an appreciation for the hard work and effort that many scientists have put into turning the former dream of lab grown diamonds into reality on your finger, even if it still has many constraints as to what types, sizes and colors of lab-grown diamonds are available.

Less P. Wright is the president of http://BetterThanDiamond.com an industry leader in white diamond simulants using lab-grown, amorphous diamond coatings, and its subsidiary, http://TakaraDiamonds.com the first to offer true lab grown diamonds to the public via the web. He is a recipient of the Gemological Institute of America''s diamond certificate.

Article Source: http://EzineArticles.com/?expert=Less_Wright