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 our continuing look at how diamonds are being used to add some bling to everyday household items, we have seen a long list of high-end products that have been made more beautiful, and valuable, using diamonds. Just about anything, even board games, headphones, and children's toys, can be made to incorporate diamonds as a show of wealth and sophistication. Let's look at another 10 items.
In a massive and resource-rich country like Canada, diamonds are a relatively small component of overall natural resource exports. Canada is a major exporter of gold, nickel, uranium, forestry products, and perhaps surprisingly, possesses the world's second largest reserves of oil in the western part of the country. In 2015, Canada exported $231 billion in natural resources. Diamond exports were $2.4 billion, just one percent of resource exports. However, diamonds have been located in some of the most northern and often inhospitable locations in this vast country. So while the impact of diamonds on the economy as a whole has been relatively small, they have been critical to the sustainable development of many northern settlements. These small towns and villages suffer from harsh weather and a lack of employment opportunities, so diamonds have been instrumental in their success in the last 15 years.
Jewelry, it would seem, is no longer limited to the traditional pieces that we think of, like rings, earrings and necklaces. Just about anything can be made more dazzling with the presence of diamonds. Due to popular demand here is another list showing some of the most interesting ways designers are incorporating diamonds into their product lines. (read here part 1 , part 2 , Part 3, Part 4 , Part 5 and Part 6)
Namibia is a Southern African nation with rich diamond reserves. Their production comes mostly from marine sources: diamonds that have been deposited on the ocean floor as a result of river movements and ancient tidal basin flows. There are also a few small, land-based mining operations. Marine mining is a difficult, costly, and highly mechanized process. De Beers is the main producer of diamonds in Namibia, having invested heavily in marine mining equipment and exploration vessels over the years. The limited artisanal mining in the country means the government has strong controls over production levels.
On September 20, 1966, Botswana declared its independence from Great Britain. At the time, the country had a GDP per capita of less than $84, and was one of the poorest and least developed countries on the planet. Just seven months later, in April 1967, geologists discovered the Orapa diamond mine within a cluster of kimberlites in the North-Central part of the country. The discovery set off a diamond rush that eventually led to the discovery of many more viable diamond mines, and elevated the country into one of the most important diamond producing nations in the world. Since that time, Botswana transformed itself into a thriving African nation, with diamonds central to its development.
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