Legal settlements in America and Europe followed, barring the company from monopolistic behaviour. De Beers is adjusting to the new era. Its first challenge is an unfamiliar one: to grapple with competitors. New firms have cropped up, too, some buying mines from De Beers as it sought to shore up its balance-sheet.
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Even in countries where De Beers does not have a joint venture with the government, it depends on local co-operation. The firm wanted to expand a mine in Ontario, but a nearby indigenous group withheld its consent. Demand slumped in China in late , prompting retailers to buy fewer polished diamonds. Companies that cut and polish stones became weighed down by excess inventory. But the tools De Beers once used to use to prop up prices were no longer at hand. There are legal restrictions on the share of excess diamonds it may buy. Because it controls just one-third of the market, any production cuts have limited effect on total supply.
In fact, the firm may even have made matters worse. Contracts with its customers sometimes encourage them to overpurchase—if they turn down too many of the stones De Beers offers them, they risk being allocated a smaller share in future. There are signs of recovery. De Beers is becoming more flexible, easing rules for buyers of its stones. More frequent reporting of its sales should help investors understand the business. It also signals to competitors—without engaging in collusion—when the market is deteriorating, enabling them to adjust accordingly.
Morgan, a bank. Even so, excess inventory may yet drag down the market. Some jewellers have recently reported slack sales. In the coming years, he thinks, De Beers will benefit from rising incomes, particularly in China and India. But a long-term risk looms over the industry: one day young couples may no longer want diamonds at all. For Veblen goods, the normal law of supply and demand does not hold: higher prices support demand, rather than suppressing it. If a big gap opens up between the number of diamonds offered for sale and the number of people willing to buy them at high prices, diamonds could suffer a big, sustained fall in value and the entire business could cease to make sense.
Young couples, who earn less than their parents did at their age, may prefer to spend their money elsewhere. Complicating matters, those who do want a diamond now have an alternative. Synthetic diamonds have been available for decades, but only recently has the process become cheaper and the result more refined. In a company called New Diamond Technology made a ten-carat polished diamond of excellent quality, an unprecedented feat.
So De Beers is trying to boost the allure of natural gems. That means studying consumers; few other firms obsess over both mining-truck depreciation and romance among young Chinese. It also means new advertisements. Other spending is for the industry as a whole. In De Beers and other miners formed a group to pool money for generic diamond advertisements. YouTube videos show Nick Cannon, best known as the ex-husband of Mariah Carey, a singer, interviewing couples about their engagements. It is unclear if this will persuade young romantics to spend thousands on diamonds.
If synthetics grow in popularity, De Beers may need to become more aggressive. Already, it is suing a synthetic-diamond company in Singapore for infringing its intellectual property. Its own synthetic-diamond operation, for industrial uses, holds more than patents. As the company works to shore up demand, there is a source of solace. For over a century it has fretted that big new finds would lead to plunging prices.
In total, explorers have sampled fewer than 7, kimberlite pipes. De Beers continues to explore in Canada, South Africa, Botswana and Namibia—the only thing worse than finding a big new source would be someone else finding it first. Some fancy technology is supposed to help. In geological terms, morganites are actually rarer than diamonds.
Their price stems not from cheapening abundance but rather from recent and limited demand. Still, we know that matters of taste are not known to adhere to petty things like logic. Weddings especially, as family events, are subject to the dogmas of multiple generations. In the face of years of diamond branding, morganite still has a lot to overcome. The morganite she chose was actually smaller than what they could afford. Want more stories from The Goods by Vox?
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For more newsletters, check out our newsletters page. The Latest. He wanted a political show. Some 60 to 80 percent of the diamonds forced to the surface were probably destroyed during this violent process. The park contains the largest cone, but five others—covering just a few acres each—are also in the area.
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Though the diamonds could not support a commercial operation, there is still room for profit. Arkansas diamonds fetch about ten times more per carat than comparable stones, largely because collectors value the diamonds' American provenance and unique character.
Many of the stones are smooth and rounded like a drop of glass, and they are among the hardest in the world. They come in three colors: white, yellow and brown. There's practically no other major mine in the world with stones that could pass for Arkansas natives, except maybe the Panna mines in India.
The similarity among the two sites' stones is likely to be skin-deep, says Howard, although no one has documented the trace elements that could be used to fingerprint Arkansas diamonds. If Blake's 3. The rest of his stones would fetch far less. Howard was on vacation but made a special trip to his Little Rock office when he got the call about the big diamond. Howard called Blake's cell phone again and again to no avail. He reached Blake a few days later, and Blake explained that he "had a flat tire and didn't have time to come by," Howard recalls. When word of Blake's finds reached the Murfreesboro Miner's Camp, a trailer park and campground that hosts a population of good-natured diamond hunters, people were a tinge jealous.
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His personal best rate has been 38 diamonds in 31 days, a record he achieved in October For all their suspicions, there was no evidence of wrongdoing. Then a fossil and mineral dealer named Yinan Wang noticed something strange. Wang asked Hirani to share a copy of a recent Kimberley Process Certificate, which would ensure that his rough diamonds were not the so-called blood diamonds traded by warlords in Africa and would verify that Hirani had previously done business in the United States.
By chance, the certificate Hirani copied for Wang had come from an order Hirani had sent to Blake. Wang—simply sizing up his potential business partner—decided to ask Blake if Hirani was trustworthy. To his surprise, Blake denied the connection: All our diamonds are from the U. Wang didn't think much about the incident until March He was chatting with Hirani about sources for rough diamonds, and Wang mentioned Blake's Web site.
The dealer looked at it and immediately thought he recognized some of Blake's jewels as his own. Hirani shared his receipts, shipping confirmation numbers, and photographs with Wang, and the duo later tracked the 3.
If Blake really did plant foreign diamonds in Arkansas soil, was it a crime? Pike County Sheriff Preston Glenn is investigating Blake and expects to complete his work in early , but says it would be up to the prosecuting attorney to determine what charges, if any, to pursue.
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Blake says he has done nothing wrong and simply posted the wrong photos on his site.