DIAMOND journey



Exploration and Mining

Natural diamonds were created as far back as 3.3 billion years ago, and were formed as a result of carbon being subject to enormous heat and pressures under the earth’s crusts—at depths of 400 kilometers or even greater.

Mineral prospectors search for these diamond deposits in volcanic pipes called kimberlites. These are primary deposits, which if viable are mined first in open pit operations, and later through underground mining. Secondary deposits, also referred to as alluvial, are formed as a result of the erosion of material from primary deposits and contain diamonds that have traveled some distance from their original source. These stones are mined in riverbeds, and at coastal and undersea locations.

Rough diamond are mined in some 22 countries, but in terms of value more than 95 percent of goods are produced in just seven.  Russia was the largest diamond-mining nation by value in 2016, with a 35 percent share, followed by Botswana at 22 percent, Canada at 14 percent, Angola at 8 percent, South Africa at 7 percent, Namibia at 5 percent, and Australia at 3 percent.

holding diamond

In recent years auctions and tenders have become more popular, with regular auctions held in a number of centers, with the largest being Antwerp, followed by Ramat Gan in Israel, Dubai and South Africa. Smaller manufacturers typically buy from rough dealers.

The largest rough diamond trading center is in Antwerp, Belgium, although significant centers also operate in Ramat Gan  and Dubai.

Diamonds which are not of gem quality are sold for industrial purposes at this stage, and from a practical perspective exit the diamond pipeline.


Rough diamond sales

The world’s five largest rough diamond suppliers, which currently control in excess of 80 percent of the market are today De Beers, Alrosa, Rio Tinto, Dominion Diamonds and Petra Diamonds.

De Beers used to be the dominant rough diamond-producing and distributing company, at one stage handling more than 90 percent of the goods consumed worldwide. Today its share is below 40 percent. Indeed according to a De Beers Insight Report, De Beers and Alrosa accounted respectively for 37 percent and 27 percent of global sales to cutting centers in value terms.

Rough diamonds are sold by the mining companies in a variety of ways. The larger producers have traditionally preferred long term contracts with a relatively limited number of larger polished diamond manufacturerss. De Beers’ clients who receive a regular supply are called sightholders, while other companies call such customers preferred clients.