Facets of the Diamond Trade

A Many Faceted Story
Diamond’s are a near universally recognized symbol of beauty, romance and enduring love.  The stone’s rise to the pinnacle of the modern gem world however, is much more than a fortuitous accident of geology.

BY: Cuyler Gibbons

[divider height=”30″]

ScreenHunter_514 Feb. 17 11.10Nearly 2,000 years ago, Pliny, a Roman naturalist and philosopher, said, “Diamond is the most valuable, not only of precious stones, but of all things in this world.”  The ancient Roman’s declaration not withstanding, the esteemed reputation of the diamond today owes as much to brilliant marketing as to its unique intrinsic properties.

The making of a natural diamond requires the tremendous heat and pressure that is found only deep underground, along with the further violence necessary to force it upward to where it can be mined, or early on, even found at the surface.

First discovered in India in the fourth century BC, “rough” stones were originally plucked from river beds, with eight deposit sites eventually identified throughout the country. The stone found its natural appeal among the rarified market of India’s wealthy class. Although large scale shaping and polishing of this hardest of all natural materials was never prevalent in India, and would not be prevalent in Europe until the 1300s, diamonds in their natural state remain exceptionally beautiful and unique stones and, due to the mystical properties associated with the gem, played an outsized role in Indian society.

Esteemed officials were trained in certifying the quality and value of a stone, and ultimately setting its price.  There are 1,000-year-old Sanskrit texts which detail the sophisticated grading system employed and the vital importance of the diamond experts. While the “Four C’s” are a basic modern method of classifying precious stones, the Indian gem gurus employed a similar system involving eight separate criteria. The real difference between then and now however was the deathly serious stakes dependent on the Indian gem expert’s judgment. Purity was paramount and the type, size, color and location of any flaw could have a specific and deleterious impact on the fate of the wearer, while a pure diamond could protect from all sorts of mishaps, while promoting health and individual welfare. In fact, the Ratna Shastra is an ancient reference book on what then amounted to the “science” of gemstones, and which classifies different flaws by their very specific effects on the physical, emotional or social life of the wearer.

Diamonds remained unique to India until the time of Alexander the Great, when the shrinking of the world brought about by the Macedonian’s military campaigns saw diamonds introduced to the Mediterranean region. Until then diamonds occupied such an important position in Indian society that their export had been banned. India society was highly advanced for the time—it was a society that produced the philosophy of the Vedas and the Upanishads, and invented the wheel. That Indian tradition would acknowledge the occult powers of diamonds for thousands of years is a testament to the truly unique nature of the diamond among earthly materials, and its strange appeal to the human psyche.

While India certainly understood a diamond’s cleaving properties, and it’s ultimate hardness, which allowed polishing only via another diamond, the stone’s value was in its natural perfection. India had rich supplies of rubies and sapphires that could be cut and polished into gems, but the spiritual properties of a well shaped rough diamond made it far more valuable in its natural state.

Until the 14th century, while diamonds were known in Europe they were expensive and rare. Expensive because they only came from India where they were highly valued and priced accordingly.  And because Europe did not share India’s mystical sensibilities, the rough stones, not being polished jewels, were far less valued on the continent, and thus imported infrequently.

While the precise origins are unknown the knowledge that diamonds could be cut and polished came to Europe sometime in the 14th century. With the reopening of trade routes to the east diamonds on the continent went from exceedingly rare to simply relatively uncommon, and with their availability as a proper jewel became of interest to aristocrats and the ruling class as a symbol of wealth and power.  Overtime as the economic center of Europe moved north from the Mediterranean, diamond production became centered in Paris and Antwerp where it remains today, with 80 percent of the world’s diamond’s being cut in that Belgian city.

The desire of Europe’s aristocracy for ostentatious displays of wealth seemed insatiable and diamonds soon became the preferred method of flaunting one’s status. So much so in fact that by the beginning of the modern age, as Pliny foretold, diamonds had become the most sought after good on earth. Such rapacious demand led to significant destruction in the name of diamond extraction, but also with the English colonization of India, resulted in the wholesale looting of Indian temples and the Royal Dynasty of vast of amounts of diamonds that were then sold throughout Europe. To some degree, ethical dilemmas regarding sourcing dogs the diamond trade to this day.

ScreenHunter_512 Feb. 17 11.09By the 1700s, India’s diamond supply was essentially exhausted.  Serendipitously, in the 1720s, diamonds were discovered in a Brazilian river bed. The new supply proved abundant and Brazil went on to dominate the diamond trade for the next 150 years until the Brazilian supply, like India’s before, began to decline precipitously.

Once again a new even richer supply was discovered seemingly just at the right time, in Kimberly South Africa. Also at the same time, following the French Revolution, the rise of a prosperous middle class in Western Europe and America gave rise to a new broader demand. Thus did the birth of the modern diamond trade begin.

The first South African discovery had been an alluvial (river) deposit, as in India. However soon enough the first “kimberlite pipe” was discovered, a geologic formation created by the force of volcanic activity, where diamonds are brought up from the depths where they are formed. This discovery was soon followed by more discoveries across Africa in Congo, Namibia, Tanzania, Angola, and Ghana. Then in the 30’s yet more deposits were found in Sierra Leone, Guinea and the Ivory Coast. By the middle of the 20th century, 99 percent of all diamonds came from Africa.

One of the original South African discoveries took place on a farm owned by the DeBeers brothers. While the brothers themselves soon abandoned the area their name lives on as the dominant force in diamonds today. As the South African diamond rush began, a local politician name Rhodes began renting pumps, vital to mining operations, to the influx of minors coming to the area. He shrewdly plowed his profits back into the purchase of new mining claims, consolidating his claims under the moniker De Beers Consolidated Mining. By the 1890s, Rhodes and DeBeers had monopolized the diamond trade, and were able to maximize profits with rigid supply and price controls. When Cecil Rhodes died in 1902, DeBeers controlled 90 percent of the world diamond trade.

By 1927, a man named Ernest Oppenheimer was chairman of the DeBeers board, and DeBeers control of the trade had became nearly absolute.  Then the 1930s and the Great Depression ushered in a worldwide decline in the demand for and thus the price of diamonds, prompting DeBeers to aggressively move to open the huge potential represented by the United States market.  Ultimately this move took the form of one of the most well known, enduring, and successful advertising campaigns of all time.

ScreenHunter_513 Feb. 17 11.10A diamond, as we all now know, “is forever.” But it wasn’t always so. Until DeBeers and the N.W. Ayer agency launched the campaign, there was no universal, default understanding that a diamond was the de rigueur engagement stone.  With relentless advertising equating a diamond with true love DeBeers sought to convince men that a diamond, and the bigger the better, was the best way to express and symbolize the depth of their affections. By giving diamonds to movie stars and prominent celebrities, DeBeers solidified the idea of diamonds as the preeminent gem, and a symbol of indestructible love, in the minds of the public. In 1947, the tag line “A Diamond is Forever” was born, and became the company’s official motto.

Today, DeBeer’s grip has been loosened with the discovery of additional world wide deposits in Russia and elsewhere, though the company still enjoys a 30-40 percent market share. It’s push into the American market was a huge success, with the US now purchasing 35 percent of the world’s diamonds, making it the world’s largest consumer.

While uniquely hard and lustrous, diamonds are no longer particularly rare in comparison to some other precious gemstones. Yet they retain their special place at the top of the gem hierarchy. Over a thousand years, the perceived value of a diamond has shifted from its status as a natural object of mystical power, to a beautiful, unalterable symbol of enduring love. Over all time however, for whatever reasons, this fascinating stone has continued to shine, perhaps more brightly than all others, in the imagination of people everywhere.

Facebook Comments