The Business of,C* Diamonds.
They are perhaps the ultimate, most enduring status symbols -- the perfect evocation of romance and wealth. "Diamonds are a girl's best friend," we've been taught -- but they are far more than that. They are seductive, transcendent objects of lasting fascination. Their influence extends to seemingly contradictory realms of human experience -- from art to money, from love to war lords, from luxurious refinement to bone crushing labor.
Kipp explores the glittering business of diamonds, and finds that maybe they aren't forever after all.
The four Cs
First thing is first, the basics. How do you measure a diamond? And more importantly, how do you value it? The answer lies with the four Cs.
CUT: A high quality cut ensures a brilliant, glittering stone, highly reflective of light.
COLOR: Diamonds exhibit a range of color, from completely white or colorless, to yellowish. A diamond's color grade refers to its lack of visible color, or its degree of whiteness. The higher a stone's color grade, the less color it contains.
CLARITY: A measure of the number and size of tiny imperfections that occur in most diamonds. Because these flaws are generally microscopic, clarity may be less important than other factors to the overall diamond's appearance.
CARAT: A measure of a diamond's weight, though not always an accurate reflection of the stone's size.
In the news
Diamonds are the center of the current war crimes trial of Charles Taylor, Liberia's former President. Under indictment in The Hague, Taylor stands accused for war crimes committed during Sierra Leone's brutal civil war that raged from 1996 to 2002.
Prosecutors contend that Taylor accepted illegally mined diamonds from Sierra Leone insurgents in exchange for weapons "used in a campaign of terror which killed 120,000 people and included child enslavement and mutilation atrocities," the Telegraph reported Monday.
Central to testimony in Taylor's trial, is the origin of the so-called "blood diamonds," alleged to have been given to British supermodel Naomi Campbell.
"An 'excited' Naomi Campbell told companions after a dinner in South Africa that she had been given a gift of diamonds by warlord Charles Taylor, [American actress] Mia Farrow has said, disputing the supermodel's claim under oath that she did not know the origin of the gems," according to the Telegraph.
A marketing myth
Endowing objects with value -- as in the case of diamonds or precious stones -- is ultimately a choice made by human societies. It is usually based on beauty and scarcity, and a certain power of objects to inspire and endure in human trade and influence. In other words, it is a very human decision, and genius marketers know this.
"The diamond invention--the creation of the idea that diamonds are rare and valuable, and are essential signs of esteem--is a relatively recent development in the history of the diamond trade," contends Edward Epstein in a provocative report on the marketing campaigns of De Beers diamond sellers, entitled 'Have you ever tried to sell a diamond?'" Epstein's article is one of the most famous and alarming pieces of journalism written, and charts what he believes is the historic manipulation of all of human society into believing the value of diamonds.
Throughout the 20 th century, De Beers masterminded a bold and ambitious ad campaign designed to "perpetuate the illusion of scarcity of diamonds," Epstein says, even as diamonds were flooding the market following the discovery of vast mines in South Africa in the second half of the nineteenth century.
The result of their efforts has secured a central place for diamonds in the culture of wealth, affluence, and romance. But be warned: according to Epstein in reality the market is artificially maintained, which is why if you ever come to sell a diamond, you'll get nowhere near what you paid for it.
Diamonds are not a smart investment for most of us, therefore. But if you're mega-rich, you might be able to escape the diamond trap by buying the biggest, rarest gems out there. For example, named among Bloomberg's list of the world's most expensive stuff for 2010 is the iconic $16 million Chopard blue diamond ring. Considered the most expensive ring in the world, the Chopard blue diamond ring features a brilliant 9-carat blue diamond set in an 18-carat white gold band, paved with diamonds. This iconic piece sold in 2007 for a reported $16.2 million. A Chopard spokesperson estimates the ring's value today at an eye-catching $18.5 million. But is that the truth, or more marketing spin? Kipp guesses that's for the owner to worry about.
Thanks in no small part to De Beers's efforts, back in the day a glittering rock on a woman's hand only brought to mind notions of privilege and enduring love. But today, thanks to the global news cycle, diamonds are also associated with a completely different set of images: civil unrest, weapons trade, human rights violations, brutality, and worker abuses -- to name just a few. Amnesty International calls them "conflict diamonds" -- they are sold to fund armed conflict and civil war.
"Profits from the trade in conflict diamonds, worth billions of dollars, were used by warlords and rebels to buy arms during the devastating wars in Angola, the Democratic Republic of Congo (DRC) and Sierra Leone. Wars that have cost an estimated 3.7 million lives," according to the group.
And while much of the conflict in these countries seems to have subsided, the problem hasn't gone away.
"Diamonds mined in rebel-held areas in CE[sup.3]te d'Ivoire, a West African country in the midst of a volatile conflict, are reaching the international diamond market," say Amnesty. "Conflict diamonds from Liberia are also being smuggled into neighboring countries and exported as part of the legitimate diamond trade."
Amnesty International encourages advocacy by consumers in the retail setting to ensure that diamonds are legitimate and that no innocents "died for your diamond."
Whether they fund war or are artificially priced, people want diamonds. Badly. In Britain's biggest-ever jewel heist, a gang of four thieves last year stole a reported $65 million worth of jewelry and diamonds from Mayfair's Graff Diamonds. The four wore rubber masks and held employees at gunpoint, as one of the staff was ordered to empty display cases containing dozens of pieces of jewelry -- including a diamond necklace valued at Au3.5 million, the Telegraph reported.
Costumed in professional makeup, the crew used a series of getaway cars to make their escape. It didn't help in the end -- they were caught and sentenced to lengthy prison terms last week, charged with conspiracy to rob and other crimes.
"Graff Diamonds, owned by the billionaire tycoon Laurence Graff, 72, lost more than Au6.6m as a result of the robbery," the Guardian reported. We're sure they are insured.
2009 Dubai Business | Kippreport. All Rights Reserved.
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|Date:||Aug 10, 2010|
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