The diamond market.

 

First of all an important distinction is between the rough diamonds market and the polished diamond market. They are two separate markets where the first relates to diamonds mined as rough material, while the second concerns the diamonds after cut (polished) as we are used to know them. Although they are naturally connected and the polished market should reflect rough market trends, they are often not correlated and shifted in prices and trends. The most important factors that have influence on market dynamics are: the oligopoly among mining companies, liquidity flows and market stocks.



The diffulties in past decades to raise funds to support exploration campaigns for diamond mines, have naturally selected the strongest players with mergers and acquisitions among mining companies linked today to the biggest economic and financial groups such as Alrosa, Anglo American (De Beers), Rio Tinto, BHP Billiton, and a few other minor realities that exploit the specialized fields of the mines in Africa, Russia, Canada, Australia.
This concentration has occurred because when a mining company decides to invest in the extraction of diamonds, has no assurance about the final result. The identification and exploitation of a diamond pipe don’t say anything about the quality and value of diamonds mined, unlike gold which is enough to extract and weigh to have a safe and certain return on investment.

The average yield of a mine is 1 gram of diamond every 10 tonnes of rock extracted and only a fifth of this gram (1 carat - ct) is used in jewelry, the rest is diverted to the many different uses but it has no interest in jewelry. If we assume that this gem quality carat produced is available in a single crystal, we’ll get a round brilliant diamond cut of only half carat (0,50 ct)…imagine that only 5% of these gems produced has a weight greater than 1 carat! If we resume: to obtain a gem you need to select about 60 million of rough stones…
If until the last century there was a single player - De Beers – on the rough market, today the situation has changed. The market is more efficient thanks to the presence of competitors. We must add the demand that comes from the market for polished diamonds used by jewelery factories and for investment demand...all dynamics come together in one place to get a price: the diamond exchange, as the Antwerp Diamond Bourse, which is the oldest and most important in the world.

Contacts

addressANTWERP DIAMOND BOURSE
SCHUPSTRAAT, 17 - 2018 ANTWERPEN (BE)

phone
+32 (0)3 231 4870

fax
+32 (0)3 231 4671

email
info@marcellomanna.com

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