Diamond

The mineral diamond is a crystalline form, or allotrope, of carbon (other allotropes of carbon include graphite, fullerene and ceraphite). It is one of the most known and most useful of more than 3,000 known minerals. Diamonds are renowned for their superlative physical qualities, especially their hardness—the word "diamond" derives from the ancient Greek adamas (αδάμας; "impossible to tame")—and their high dispersion of light. These properties and others make diamond valued for use in jewelry and a variety of industrial applications. Most diamonds are mined from volcanic pipes, where they have been deposited by deep-origin volcanoes drawing material from over 90 miles (150 km) deep within the Earth, where the pressure and temperature is suitable for diamond formation. Most diamonds are mined in central and southern Africa, although significant deposits have

The diamond industry

The diamond industry can be broadly separated into two basically distinct categories: one dealing with gem-grade diamonds and another for industrial-grade diamonds. While a large trade in both types of diamonds exists, the two markets act in dramatically different ways.

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Gem diamond industry

A large trade in gem-grade diamonds exists. Unlike precious metals such as gold or platinum, gem diamonds do not trade as a commodity: there is a substantial mark-up in the sale of diamonds, and there is not a very active market for resale of diamonds. One hallmark of the trade in gem-quality diamonds is its remarkable concentration: wholesale trade and diamond cutting is limited to a few locations (most importantly New York, Antwerp, London, Tel Aviv, Amsterdam and increasingly Gujarat), and a single company — De Beers — controls over half of all trade in diamonds.

Related Topics:
Gem - Precious metal - Gold - Platinum - Commodity - Antwerp - London - Tel Aviv - Amsterdam - Gujarat - De Beers

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The De Beers company holds a clearly dominant position in the industry, and has done so since soon after its founding in 1888. De Beers owns or controls a significant portion of the world's rough diamond production facilities (mines) and distribution channels for gem-quality diamonds. At one time it was thought over 80 percent of the world's rough diamonds passed through the Diamond Trading Company (DTC, a subsidiary of De Beers) in London, but presently the figure is estimated at around 60 percent. De Beers has used its monopoly position to establish strict price controls, and aggressively market diamonds directly to consumers in world markets.

Related Topics:
1888 - Mines - De Beers - London - Monopoly

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The De Beers diamond advertising campaign is acknowledged as one of the most successful and innovative ones in history. N.W. Ayer & Son, the advertising firm retained by De Beers in the mid-20th century, succeeded in reviving the American diamond market and opened up new markets, even in countries where no diamond tradition had existed before. N.W. Ayer's multifaceted marketing campaign included product placement, advertising the diamond itself rather than the De Beers brand, and building associations with celebrities and royalty. This coordinated campaign has lasted decades and continues today; it is perhaps best captured by the now-familiar slogan "a diamond is forever".

Related Topics:
De Beers diamond advertising campaign - N.W. Ayer & Son - 20th century - Product placement - Slogan

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Industrial diamond industry

The market for industrial-grade diamonds operates much differently from its gem-grade counterpart. Industrial diamonds are valued mostly for their hardness and heat conductivity, making many of the gemological characteristics of diamond, including clarity and color, mostly irrelevant. This helps explain why 80% of mined diamonds (equal to about 100 million carats or 20,000 kg annually), unsuitable for use as gemstones and known as bort, are destined for industrial use. In addition to mined diamonds, synthetic diamonds found industrial applications almost immediately after their invention in the 1950s; another 400 million carats (80,000 kg) of synthetic diamonds are produced annually for industrial use.

Related Topics:
Bort - 1950s

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The dominant industrial use of diamond is in cutting, drilling, grinding, and polishing. Most uses of diamonds in these technologies do not require large diamonds; in fact, most diamonds that are gem-quality except for their small size, can find an industrial use. Diamonds are embedded in drill tips or saw blades, or ground into a powder for use in grinding and polishing applications. Specialized applications include use in laboratories as containment for high pressure experiments (see diamond anvil), high-performance bearings, and limited use in specialized windows.

Related Topics:
Diamond anvil - Bearings - Window

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With the continuing advances being made in the production of synthetic diamond, future applications are beginning to become feasible. Garnering much excitement is the possible use of diamond as a semiconductor suitable to build microchips from, or the use of diamond as a heat sink in electronics. Significant research efforts in Japan, Europe, and the United States are under way to capitalize on the potential offered by diamond's unique material properties, combined with increased quality and quantity of supply starting to become available from synthetic diamond manufacturers.

Related Topics:
Semiconductor - Microchip - Heat sink - Electronics - Japan - Europe - United States

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Diamond supply chain

See also: List of diamond mines

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The diamond supply chain is controlled by a limited number of powerful businesses, and is also highly concentrated in a small number of locations around the world. In fact, the amount of power which De Beers has consolidated historically prevented it from direct trade with the United States, as its trade practices led to an indictment for violating antitrust regulations (the case was settled in 2004). The concentration of power only loosens at the retail level, where diamonds are sold by a limited number of distributors, known as sightholders, to jewelers around the world.

Related Topics:
United States - Indictment - Antitrust regulations - 2004 - Sightholder

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Sources

Historically diamonds were known to be found only in alluvial deposits in southern India; India led the world in diamond production from the time of their discovery in approximately the 9th century BC to the mid 18th century AD, but the commercial potential of these sources has been exhausted. The first non-Indian diamond source was found in Brazil in 1725. Today, most commercially viable diamond deposits are in Africa, notably in South Africa, Namibia, Botswana, the Republic of the Congo, and Sierra Leone. There are also commercial deposits being actively mined in the Northwest Territories of Canada, Siberia (mostly in Yakutia territory, for example Mir pipe and Udachnaya Pipe), Brazil, and in Northern and Western Australia. Diamond prospectors continue to search the globe for diamond-bearing kimberlite and lamproite pipes.

Related Topics:
Southern India - 9th century BC - 18th century AD - Brazil - 1725 - Africa - South Africa - Namibia - Botswana - Republic of the Congo - Sierra Leone - Northwest Territories - Canada - Siberia - Yakutia territory - Mir pipe - Udachnaya Pipe - Australia

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In some of the more politically unstable central African and west African countries, revolutionary groups have taken control of diamond mines, using proceeds from diamond sales to finance their operations. Diamonds sold through this process are known as conflict diamonds or blood diamonds. In response to public concerns that their diamond purchases were contributing to war and human rights abuses in central Africa and west Africa, the diamond industry and diamond-trading nations introduced the Kimberley Process in 2002, which is aimed at ensuring that conflict diamonds do not become intermixed with the diamonds not controlled by such rebel groups. The Kimberley Process provides documentation and certification of diamond exports from producing countries to ensure that the proceeds of sale are not being used to fund criminal or revolutionary activities. Although the Kimberly Process has been somewhat successful in limiting the number of conflict diamonds entering the market, conflict diamonds smuggled to market continue to persist to some degree.

Related Topics:
Conflict diamond - Kimberley Process - 2002

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Currently, gem production totals nearly 30 million carats (6,000 kg) of cut and polished stones annually, and over 100 million carats (20,000 kg) of diamonds are sold for industrial use each year. In 2003, this constituted total production of nearly US$9 billion in value.

Related Topics:
2003 - Billion

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Distribution

The Diamond Trading Company, or DTC, is a subsidiary of De Beers and markets rough diamonds produced both by De Beers mines and other mines from which it purchases rough diamond production; in whole, about two thirds of all rough diamonds pass through the company. DTC performs sophisticated sorting of rough diamonds into over 16,000 categories, and then sells bulk lots of rough diamonds to a limited number of sightholders a few times a year.

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Once purchased by sightholders, diamonds are cut and polished in preparation for sale as gemstones. The cutting and polishing of rough diamonds is a specialized skill that is concentrated in a limited number of locations worldwide. Traditional diamond cutting centers are Antwerp, Amsterdam, Johannesburg, New York, and Tel Aviv. Recently, diamond cutting centers have been established in China, India, and Thailand. Cutting centers with lower costs of labor, notably Surat in Gujarat, India, handle a larger number of smaller carat diamonds, while smaller quantities of larger or more valuable diamonds are more likely to be handled in Europe or North America. Demonstrating this, India produces 90% of all cut and polished diamonds by number, but only 55% by value. The recent expansion of this industry in India, employing low cost labor, has allowed smaller diamonds to be prepared as gems than was previously economically feasible.

Related Topics:
Antwerp - Amsterdam - Johannesburg - New York - Tel Aviv - China - India - Thailand - Costs of labor - Surat - Europe - North America

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Diamonds which have been prepared as gemstones are sold on diamond exchanges called bourses. There are 24 registered diamond bourses. This is the final tightly controlled step in the diamond supply chain; wholesalers and even retailers are able to buy relatively small lots of diamonds at the bourses, after which they are prepared for final sale to the consumer. Diamonds can be sold already set in jewelry, or as is increasingly popular, sold unset ("loose"). According to the Rio Tinto Group, in 2002 the diamonds produced and released to the market were valued at US$9 billion as rough diamonds, US$14 billion after being cut and polished, US$28 billion in wholesale diamond jewelry, and retail sales of US$57 billion. http://www.riotintodiamonds.com/market/industry.asp

Related Topics:
Bourse - 2002 - Jewelry

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Synthetics, simulants, and enhancements

The gemological and industrial uses of diamond have created a large demand for raw stones. A portion of this demand is now being met by synthetic diamonds, man-made diamonds which have similar properties to natural diamonds. This process has historically produced industrial-grade diamonds, but synthetic diamond producers have recently begun to penetrate the gem diamond market. Diamonds have been manufactured synthetically for over fifty years.

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A diamond's gem quality, which is not as dependent on material properties as industrial applications, has invited both imitation and the invention of procedures to enhance the gemological properties of natural diamonds. Materials which have similar gemological characteristics to diamond are known as diamond simulants. The most familiar diamond simulant to most consumers is cubic zirconia (commonly abbreviated as CZ); recently moissanite has also gained cachet as a popular diamond simulant. Both CZ and moissanite are synthetically produced for use as a diamond simulant. Diamond enhancements are specific treatments, performed on natural diamonds (usually those already cut and polished into a gem), which are designed to better the gemological characteristics of the stone in one or more ways. These include laser drilling to remove inclusions, application of sealants to fill cracks, treatments to improve a white diamond's color grade, and treatments to give fancy color to a white diamond.

Related Topics:
Cubic zirconia - Moissanite

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Currently, trained gemologists with appropriate equipment are able to distinguish natural diamonds from all synthetic and simulant diamonds, and identify all enhanced natural diamonds. The established natural diamond industry has a vested interest in maintaining the distinction between natural diamonds and other diamonds, and has made significant investments toward that end. However, synthetic diamonds may one day be indistinguishable from natural diamonds, and new techniques for simulants (such as coating them with a very thin diamond-like layer of carbon) are making it harder to easily distinguish between simulants and real diamond.

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