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.

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 Antwerp, London, New York, Tel Aviv, Amsterdam and Surat), and a single company�De Beers�controls a significant proportion of the trade in diamonds. They are based in Johannesburg, South Africa and London, England.

The production and distribution of diamonds is largely consolidated in the hands of a few key players, and concentrated in traditional diamond trading centers. The most important being Antwerp, where 80% of all rough diamonds, 50% of all cut diamonds and more than 50% of all rough, cut and industrial diamonds combined are handled.

This makes Antwerp the de facto 'world diamond capital'. The De Beers company, as the world's largest diamond miner holds a clearly dominant position in the industry, and has done so since soon after its founding in 1888 by the British imperialist Cecil Rhodes. De Beers owns or controls a significant portion of the world's rough diamond production facilities (mines) and distribution channels for gem-quality diamonds.

The company and its subsidiaries own mines that produce some 40 percent of annual world diamond production. 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 less than 50 percent. De Beers used its monopoly position to establish strict price controls, and market diamonds directly to consumers in world markets

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 3 billion carats (600 metric tons) of synthetic diamond is produced annually for industrial use�nearly 25 times the mass of natural diamonds mined over the same period.[citation needed]

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.

With the continuing advances being made in the production of synthetic diamonds, 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. Since the quality of the best synthetic diamonds is now equal to or better than that of the most perfect natural diamonds, significant changes in the gem-diamond industry may also be forthcoming.

Diamond supply chain
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.


.:::::::::::::::::::::::: Menu ::::::::::::::::::::::::. The diamond industry - The diamond history Blood diamonds - Buying diamonds online	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. 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 Antwerp, London, New York, Tel Aviv, Amsterdam and Surat), and a single company�De Beers�controls a significant proportion of the trade in diamonds. They are based in Johannesburg, South Africa and London, England. The production and distribution of diamonds is largely consolidated in the hands of a few key players, and concentrated in traditional diamond trading centers. The most important being Antwerp, where 80% of all rough diamonds, 50% of all cut diamonds and more than 50% of all rough, cut and industrial diamonds combined are handled. This makes Antwerp the de facto 'world diamond capital'. The De Beers company, as the world's largest diamond miner holds a clearly dominant position in the industry, and has done so since soon after its founding in 1888 by the British imperialist Cecil Rhodes. De Beers owns or controls a significant portion of the world's rough diamond production facilities (mines) and distribution channels for gem-quality diamonds. The company and its subsidiaries own mines that produce some 40 percent of annual world diamond production. 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 less than 50 percent. De Beers used its monopoly position to establish strict price controls, and market diamonds directly to consumers in world markets 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 3 billion carats (600 metric tons) of synthetic diamond is produced annually for industrial use�nearly 25 times the mass of natural diamonds mined over the same period.[citation needed] 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. With the continuing advances being made in the production of synthetic diamonds, 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. Since the quality of the best synthetic diamonds is now equal to or better than that of the most perfect natural diamonds, significant changes in the gem-diamond industry may also be forthcoming. Diamond supply chain 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.