Diamonds, because of their radiance, elegance, superb quality and equivalent high value are typically thought of as being owned and adorned only by Royalty, high ranking officials and the super wealthy people. This might have been true many, many years ago. But because of the success of the diamond trade and industry today, us mere consumers can now have our own piece of this precious stone, no matter how big or how small.
The diamond trade started off during the early 1900s. But before then, as mines and river deposits began producing diamonds in South Africa, Cecil Rhodes got his start by renting out water pumps to miners. Rhodes invested his profits by buying up claims of small mining companies as well as properties for diamond mining purposes. In 1888, Rhodes formed the De Beers Consolidated Mines, which eventually became the sole owner of diamond mining operations in South Africa.
To market his diamonds, Rhodes created a partnership with the London-based Diamond Syndicate in 1899. They agreed that Diamond Syndicate will buy a fixed quantity of diamonds at an agreed price. This strategy would regulate the diamond output thereby regulating and maintaining the value of the diamonds and their prices. De Beers soon controlled 85% of the world diamond production and was considered to be the greatest marketing campaign ever created.
Before diamonds reach the retail jewelry stores, they pass through a stream of middlemen. They started out as mined rough diamonds sold by De Beers to a selected group of buyers called sightholders which were committed to purchase a set amount of rough diamonds worth millions of dollars every month. The sightholders either cut and polish the diamonds themselves or sell them to rough diamond traders who then sell them to diamond manufacturing companies who cut and polish these diamonds before they are then sold directly or through brokers to diamond centers around the world.
Nowadays, jewelry manufacturers buy rough diamonds from diamond manufacturers in bulk and then sell them to the retail jewelry stores or online jewelry stores to eliminate the middlemen and to reduce cost and make diamonds more affordable to the buying public.
For more information on this topic visit our Diamond Education & Resource Center
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