I’ve heard about De Beers stockpiling diamonds to keep the prices high, so that somewhere there’s a vault filled with diamonds that have never reached the market and won’t until De Beers decides they can without driving the prices down. Are these rumours true? If they are, how much is in that vault?
Only De Beers knows.
Well, I want to know where De Beers are stockpiled too! Free Beer!
I heard somewhere that the stockpile had actually been depleted. No cite, sorry, so take that with a grain of salt.
Regardless, I think it would make a pretty cool plot for a movie, an Ocean’s Eleven type team robbing the stockpile.
The one does not follow the other. If a multinational company like De Beers was stockpiling diamonds they would likely store them in multiple locations.
Anyway, it’s no secret that De Beers manipulates diamond prices through a vigorous control of supply- in mining,stockpiles and distribution. They own over 50-60% of the industry total in each of those categories. There isn’t much need for a secret diamond vault.
I bet they have one or two hidden around though. 
Maybe if artificial diamonds really take off, they’ll use any stockpiles as a poison pill: just FLOOD the market so the artifical guys go bankrupt.
De Beers would be more likely to go bankrupt if they did. The “artificial” diamonds aren’t artificial at all. They are real diamonds – just man made. The biggest difference is that the man made diamonds are perfect and the natural diamonds are not.
Your point is, Zoe? Mine was that if artificially created diamonds made it look dismal for De Beers’ future, they might destroy the market on their way down.
Right now there’s a certain mutually-assured-destruction balance going on. Neither DeBeers nor the synthetic manufacturers have any incentive to lower the prices, because each maximizes profit by keeping prices high.
Right now most gem-grade synthetics makers are doing colored stones and engraving their work so that the natural stones will still retain value. Those making white stones (e.g. Apollo Diamonds) are making such small quantities that you have to seek them out; even if they’re available at a discount, Apollo sells their entire stock whenever they make any. Because they can’t increase supply until they can buy more diamond presses, a free market system would have them increase prices until just before they stopped selling their whole stock (or increase prices until they sell 90% and then sell the remainder at a slight discount). Regardless, the market pressure will continue to keep synthetic diamond prices high until the manufacturers can compete with DeBeers for volume.
I read somewhere that if the reserves were put on the open market, the value of gem quality diamonds would drop to something like $20 a carat. I’ll see if I can find that cite.
For De Beers to control the market, they don’t necessarily need any reserves. They just control how fast they mine them.
Also, fwiw, De Beers sells only uncut diamonds, so seeing their stockpile wouldn’t be all that impressive to the untrained observer.
Here’s a fascinating read on the subject: http://edwardjayepstein.com/diamond/prologue.htm
You can find a number of good links in this thread.
I mean, DeBeers has been bamboozeling people for years! Right now, they have managed to market "canary"and “champagne” diamonds as somehing special! These are the yellow-tinted diamonds, which used to be WORTHLESS in the gem trade. Yellow diamonds wereonly used as abrasives…and now they are marketing “black” diamonds as well.
Anybody who can get people to plunk down 6 months salary for a worthless chunk of carbon has my respect…although, moissanite looks a lot better and costs less!
I think DeBeers does sell cut diamonds, or at least semi-cut. But either way, Bill H. is almost certainly correct that any stockpile they had would be of uncut stones – it doesn’t make sense to incur the expense of cutting them prior to very long-term storage.
But it’s definitely more fun to imagine a single huge vault with cut gemstones, maybe with Scrooge McDuck rolling around in them. And yeah, Hollywood definitely ought to cook up another Gruber brother so John McClane can prevent him from getting the diamonds. They can call the movie “Diamond Hard.”
Yep. They’ve always been Facet Dictators.
Also because cut styles change. You don’t want a vault full of cut diamonds cut it the last generation’s style.
Haj
According to http://www-1.gsb.columbia.edu/journals/files/chazen/Global_Diamond_Industry.pdf, which claims to be quoting the Economist, 2000:
First, remember that cultured (i.e. man made) pearls are more valuable than natural ones.
Second, the main thrust of artificial diamonds is to make large, flawless, very cheap (abut $5/carrat) diamonds for use in computer processors to replace silicon chips. Faster and cheaper (especially FASTER) alternative.
Entering the jewelry market is a possibility, but 2nd priority.
No time to search for cite, but there was an excellent article in Wired on this just under a year ago, maybe feb or mar of '04.
While slightly yellowish diamonds have always been considered inferior to clear ones, brilliant yellow-colored ones are considered Fancy, and more valuable than clear ones (as with fancy blues and reds) as they’re significantly rarer. If DeBeers is marketing diamonds as “champagne” (that’s certainly not an attractive color for a diamond) that would formerly just have been considered not very clear, then that’s pretty funny. But diamonds that are yellow in color are nothing new.
you could just go to arkansas and dig for a diamond. they tend to have yellow ones there. hillary clinton wore a large yellow diamond at the inaug. ball, that was dug up in ark.
http://www.arkansas.com/things-to-do/diamond-hunting/
Was this the article filmyak? Link to wired article
The high tech uses of diamonds are definately there but they would be fools to ignore the money to be made in gem sales.