Diamond are forever

By | October 3, 2019

Rare, treasured, inaccessible and the result of the most protracted efforts, the diamond is at the heart of a most precarious industry which has been stabilised worldwide by the Central Selling Organisation (CSO). It was created in 1930 by the late Sir Ernest Oppenheimer, chairman of the DeBeers Consolidated Mines which today remains the leader of the industry.

Sir Ernest guided the company for 28 years founding the Diamond Corporation as a single entity representing both the producers and the buying syndicate. Its role was to buy diamonds from all producers so they could be released at a rate which the market could absorb, avoiding the uncertainties and anomalies of earlier years.

In 1934, he initiated the formation of the Diamond Trading Company to act as the valuating and marketing link in the diamond pipeline. This then was the first gleam of a centralised concept of diamond marketing – a function that had at best been chaotic up until then.

The years that followed between 1930 and 1967 needed the fine balance of such an organisation to cope with the discovery of new diamond sources in Siena Leone, Tanzania, the Soviet Union and Botswana. At the same time, new cutting centres were discovered in Belgium, the United States, Israel and India.

Upon his death in 1957, Sir Ernest was succeeded by his son Harry Oppenheimer who further developed the company into an international group that today encompasses the whole world.

A century ago, conditions were none too ideal in the diamond fields at both the DeBeers company and the Kimberley Central Mining Company controlled by a feisty East-End Londoner Barney Barnato. The two rivals finally came to terms and amalgamated their companies to form the present organisation with Rhodes as chairman and Barnato as lifelong governor.

The CSO guided the industry through tumultuous times and established the mechanism for an orderly marketing of the world’s diamond production. Unlike most commodities where price fluctuations form a normal part of their trading pattern, diamonds are unrelated to any clearly defined economic considerations. Essentially a luxury, spasmodic price fluctuations would throw the trade into confusion and undermine confidence in the long-term value of diamond jewellery.

One fact remains sharply evident. Diamonds, like all other minerals, is a diminishing resource and governments seek to ensure they are used in a manner best designed for maximum economic benefit; that income from them remain constant.

The CSO maintains adequate supplies to the cutting centres at stable prices. It also has the financial clout to carry stocks in the event demand strips supply as it did in the 19th century. Producers all over the world are assured of unbiased equality as the CSO sorts, values and mixes diamond stocks to be sold at the same price for each category. There are some 3000 of them, requiring different specialised techniques and involving different costs in cutting and polishing.

While cutters want the diamonds they can cut most efficiently and sell most readily, producers have little control over the types and qualities which emerge from their mines. The CSO therefore balances supply with demand from available production for the benefit of cutters and producers alike.

Each year, the CSO’s offices in London sort out tens of millions of diamonds individually for the sales or ‘sights’ which take place every five weeks in London, South Africa and Switzerland. Clients have to submit their requirements which are then analysed and matched by the CSO as far as possible. The diamonds are then sent on to the cutters before being sold to wholesalers and finally to jewellery retailers.

Although sorting diamonds depends largely on judgement and experience, research is going on all the time to mechanise the job. Laser beams and other automated facilities are now used especially for the smaller diamonds that have to be handled with care.

For more than 40 years, the CSO has also been involved in corporate advertising, marketing and promotional activities to stimulate the demand for diamonds. Its marketing arm works closely with retailers, designers and manufacturers in co-operative advertising campaigns, trade education and design competitions. These efforts are embodied in that famous advertising slogan – A Diamond is Forever.

For more than 30 years, DeBeers has sponsored the world’s most prestigious diamond jewellery competition – The Diamonds International Awards. Selected from thousands of entries, it has taken the art of diamond jewellery design to great heights stretching the imagination of designers around the world. Before an international jury in London, these designs are selected on the basis of their originality, drama and creative innovation.

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