Diamond Industry
...up into 3 segments:
1. Industrial Diamonds—natural and synthetic diamonds that are used in a wide range of manufacturing processes for their physical properties.
2. Jewelry Diamonds—rough diamonds cut for use as gemstones in jewelry.
3. Investment Diamonds—high-quality large gemstones, often with special
characteristics, purchased for investment.
The Jewelry and Investment segments together represent 83 percent of the value of
rough diamonds produced. The industry is controlled as a monopoly by the De Beers diamond company which operates from South Africa and London. The wholesale trade and cutting of diamonds is limited to only a few places in the world namely New York, Surat, Tel Aviv, London, and Amsterdam and the most important being Antwerp. With extensive research and sourcing, diamonds have been found in many parts of the world with Botswana producing almost one third of the world’s diamonds.
Restrictions and barriers
The diamonds industry has had to suffer many problems, the most important being the controversy over the sale of conflict diamonds. In order to rectify the problem, industry players came up the Kimberly process in 2001 along with several other countries with a set of conditions in order to monitor the sale of conflict diamonds. Another act called the Clean Diamonds trade act was also enacted in 2002 which broadened the definition of conflict diamonds by adding terrorist to the list of those who fund wars with the sale of diamonds.
Industry structure
The diamond industry is mostly controlled by the De beers diamond company. It held a market share of about 80% in the 1980’s but that share has steadily declined to 65% in 2000. This is owed to the fact that new diamond mines have been found in Siberia and Canada. De beers do not have any control over the mines especially in Siberia. This has led to the sale...
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