Financial institutions are another key stakeholder in the diamond supply chain, which Ehud believed expected greater transparency from the diamond sector.
"Bank financing is the lifeblood of the industry. Without it, there would be no money for exploration or new store openings," Ehud stated in 2015. He also stressed the need to boost confidence in the diamond industry. This lack of confidence is evident in, for example, the decline in available bank financing over the past several years.
Beyond diamond players, Ehud explored other supply-side topics that have sparked debates over the years where he believed that similar to demand-side issues, greater transparency is central to address them. Lab-grown diamonds provide a good example.
While their emergence was accompanied by rising concerns across the industry, Ehud believed lab-grown diamonds can play a complementary role to that of natural diamonds, provided consumers gain a better understanding of the inherent value of natural diamonds.
As another possible way to solve the problem of fragmentation in the diamond sector beyond consolidation, Ehud encouraged the industry to explore strategic alliances.
Ehud explored possible methods of addressing the issue of fragmentation, drawing in part on lessons from other industries.
First among them was simply consolidation, whether natural or through mergers and acquisitions.
Delving further into the issue of fragmentation in the midstream (manufacturing) of the diamond sector covered in last week's post, Ehud said in August 2015, "The more we examine the facts, the clearer it becomes that the main problem faced by the diamond industry is that the midstream – the manufacturing sector of the diamond pipeline that mainly polishes diamonds – does not get its fair share of the pie."
In addition to improving pricing transparency, Ehud believed that the diamond industry should also tackle the other issues that have led to a decrease in trust in the sector as a whole.
Improving the pricing transparency of polished diamonds is the first part of the two main components of the Crystal Clear philosophy. The other part, driven by the first, is the ability to then determine the prices of rough diamonds.
The rationale that Ehud used here was that, ultimately, it is consumers who determine the price of a rough diamond based on how much they are willing to pay for its polished output.
The introduction of a transaction-based polished diamond price list is possible. The Mercury Diamond™ Price List which Ehud founded, provides wholesale polished diamond prices based on transaction prices in the wholesale market.
A key component of Mercury Crystal Clear™, the diamond pricing system which Ehud founded, is expanding consumer knowledge of diamond characteristics beyond the 4Cs (Carat, Color, Clarity and Cut) known to the ordinary buyer.
"The importance of a transparent and easily understood pricing system for diamonds cannot be stressed enough. For many years, the general press and many consumers have been stating that the misunderstood differences in diamond prices are a turn-off."
In the Middle Ages, alchemists tried to turn lead into gold. Lead was an inexpensive metal, while gold was and remains very valuable and a traded commodity. Success meant creating wealth. Similarly, scientists made serious efforts to imitate the natural process that creates diamonds. In the late 19th century, some of these efforts garnered some success. However, the important breakthroughs came only in the mid-20th century at the labs of General Electric in New York, where the first High Pressure High Temperature (HPHT) machine was invented by Tracy Hall.
The diamond industry has always lent itself to well-told stories. The beauty, wealth, even power associated with this fantastic creation of earth easily captures the imagination. Those involved in the trade of diamonds and creation of jewelry were often unusual people, who thanks to their tendency to do things in their own unique way succeeded in their endeavors. Such person was Sotirio Voulgaris/ His name is virtually unknown, although his eponymous brand is well known, his geographic origin is different than other central players in the industry, and the route he took was uniquely his, leaving a sublime legacy behind him. Who later became a part of one of the biggest names in the indusrtey - The Bulgari.
When thinking of De Beers, we automatically think of the Oppenheimer family. That is the name most people know and associate with the diamond mining giant. Those that know a little more are usually familiar with Cecil Rhodes, and they are very familiar with the history of the company, they may have even heard of Barney Barnato. Yet few have ever heard of Alfred Beit, the financial wizard behind the unification of diamond claims into a single company that formed De Beers.
In the diamond industry, Harry F. Oppenheimer is known as the former head of De Beers and the man who controlled the global diamond industry for decades. However that description does not do him justice. Taking controll of great gold and platinum assets, and was a South African parliamentarian who fought the country's apartheid rule.
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