News from All Diamond

The diamond industry has a storied history. It has been built by influential people, both past and present, who have left their indelible marks on a business that captivates consumers around the world. Over the next several weeks, we will highlight some of the achievements of these people, people from all walks of life, who have helped to lay a foundation for all of us. Perhaps we might learn something from their accomplishments that might help others to shape the industry moving forward. For an introduction to our list of famous people in diamonds, we will start with Cecil Rhodes, the founding chairman of De Beers. 

 Ernest Oppenheimer was the first of the Oppenheimer family to prosper in the diamond industry. He and his descendants would continue to play an integral role in shaping the industry for more than a century. He was born in 1880 in Freidburg, Germany, the son of a cigar merchant. At the age of 17, he began his working career as a diamond broker in London as diamonds were just becoming widely available with the early South African diamond rush. By 1902, he had impressed his employers so much that they sent him to South Africa to represent them as a diamond buyer in Kimberley.

At the same time, the massive Premier Mine was put into production. Its owner, Thomas Cullinan, had refused to join De Beers Consolidated mining, and instead began selling his production to two independent diamond dealers from London, Oppenheimer and his brother Bernard. This massive production undermined De Beers' sales, but Francis Oats, the successor to Cecil Rhodes as Chair of De Beers, was dismissive of the threat. However, production from the Premier Mine would soon eclipse the production from all De Beers mines combined. Oppenheimer was appointed as the local agent for the powerful London syndicate, much to the angst of Oats.

Sergey Ivanov, President of ALROSA, said that diamond manufacturers in Russia would not be able to survive without government subsidies. The abolition of a 6.5% export tariff in September 2016 is a major contributing factor, he said, but so too are declining polished prices and increasing rough prices, which have driven much of the midstream to the brink. Diamond beneficiation in Russia has a history almost as long as mining itself, and some regions of the country are entirely dependent on diamond polishing for their economy. 

South Africa has a very long and important role in the history of diamonds. It was there, in the 1860s, that diamonds were discovered on the banks of the Orange River. The resulting diamond rush, and the establishment of De Beers' foothold on diamond mining, transformed the industry, helping to develop diamonds as a viable commercial product for more than just the world's elite. At one point in time, almost all of the world's diamond mining activity took place in South Africa. While the nation is still an important producer of diamonds, its role has diminished. Today South Africa is the world's fourth largest diamond producer by value, according to Kimberley Process statistics.

In the diamond industry, we often hear that the cost of rough diamonds is disconnected from the price of polished diamonds. Many of us wonder how that is possible, especially since the largest cost component of polished diamonds is rough.