Derived from the Greek word – adámas, which means unbreakable, diamonds with their unparalleled hardness and optical luster always had a special place among the royalties and deities, with their historical importance dating back to more than 3,000 years.
Diamonds and India
- Earliest usage of diamonds finds its origin to India.
- ‘Arthashastra’, a historical text dating back to 296 BC mentions Diamond trading in India.
- The earliest symbolic use of diamonds was as the eyes of Hindu devotional statues.
- Apart from use in jewelry and for decorative purposes, Kings used to stud diamonds in their swords and daggers to ward off evil and obtain protection in battles.
- Diamonds were considered so precious and powerful that their ownership was actually controlled.
- Every caste was restricted to own specific color of diamonds.
- Only the ruling king of the time was allowed to possess diamonds in all colors.
- People believed that those who had diamonds in their possession could harvest good luck by the powers vested in them.
- Some of the world famous diamonds including Cullinan, Koh-i-Noor, which now rests on crowns and thrones, originated in India
Diamonds and the world
- Ancient Greece: In ancient Greece it was believed that diamonds were pieces of stars that had fallen to earth. It was said by some that they were tears of gods. Another legend describes an inaccessible valley carpeted with diamonds that were patrolled by birds of prey and guarded by snakes.
- Ancient Rome: Romans valued diamonds for their ascribed supernatural powers and believed that a diamond baffles poison, keeps off insanity, and dispels vain fears.
- Ancient China: Chinese would make use of diamonds for the purpose of creating diamond tools that were used for drilling holes in beads and also for engraving precious stones like Jade.
- Astrology associated diamonds with nobility of character, buoyancy of thought and a wider vision, peace and prosperity and recommended their use for good luck and to increase longevity.
- Diamonds enhanced the image of the wearer in social and family circles.
- It was believed that Diamonds bestow the wearers with willingness to execute their planned objectives and protect those who often waiver to take timely decisions.
- There is a popular ancient belief that diamonds have a soul.
A Change in Trend
Diamonds in the Dark Ages
- During the Dark Ages diamonds were used as a medical tool.
- A diamond held in the hand while making a sign of the cross was practiced as a way to heal wounds and cure illnesses.
- Diamonds were also ingested in the hope of curing sickness.
Diamonds in the Middle Ages
- With the discovery of many large and famous stones in India, such as the ‘Koh-I-Noor’ and the ‘Blue Hope’, the popularity of diamonds surged during the Middle Ages.
- The Middle Ages emphasized the worth of diamonds rather than their mystical powers.
- The medieval Italians copied these beliefs and added more to it – they called it the “Pietra della Reconciliazione” (stone of reconciliation) because it maintained concord between husband and wife. Thus a diamond ring was used by them for engagement purpose.
- Until the middle ages, Diamond production was largely associated with India. Gradually the Indian diamond supply decreased and diamonds became more precious than ever. Some smaller mines were found in Brazil and Borneo.
Diamond in the 19th and 20th Century
- Only in the 19th century, diamonds were discovered in South Africa. Then began the Diamond rush and formation of the present age of diamonds.
- In the late 1970’s, diamonds were also discovered in Australia.
- In 1979 the richest diamond deposit was found near Lake Argyle.
Diamonds and De Beers
- During the second half of the 19th century, markets were flooded with diamonds, killing their rarity and value. This is when the journey of De Beers started.
- In 1880, Cecil Rhodes bought claims of some fellows and rivals to create the De Beers Mining Company, with model of consolidating small claim holders into a bigger group. It didn’t take much time for De Beers to virtually own all South African diamond mines.
- In 1888, De Beers Consolidated Mines, Ltd. was formed. As its influence in diamond trade grew across the world, to control supply and demand ‘The Diamond Syndicate’ (including ‘The Diamond Trading Company’) was formed.
- Due to common interest, claim holders and distributors joined De Beers in this endeavor, to create an artificial scarcity of diamonds and increase their prices.
- By 1902, De Beers controlled 90% of world’s rough diamond production and distribution.
- Over the years, Ernest Oppenheimer of Anglo American Corporation, a rival company, bought representations in De Beers and by 1927 he was the chairman of the board.
- He was the mastermind who made De Beers into an empire. De Beers and its Central Selling Organization made exclusive agreements with suppliers and buyers, making it impossible to deal with diamonds outside of its network.
- It convinced independent producers to join its single channel monopoly. It flooded the market with diamonds similar to those of producers who refused to join the cartel.
- It purchased and stockpiled diamonds produced by other manufacturers in order to control prices through supply.
- De Beers used its dominant position to dictate terms on producers, suppliers, distributors etc. and manipulated the international diamond market by stockpiling diamonds in their vaults to control supply and prices of diamonds.
- During the great depression, when the diamond prices fell, De Beers started advertising and marketing aggressively and later on launched “A diamond is forever” campaign, reinforcing the rarity and value of diamonds in the minds of common man.
- Whenever a diamond source was found anywhere in the world that posed as a threat, De Beers ensured to gain control, like in the case when diamonds were found in Siberia in 1950s.
- Over the years, De Beers ensured that it remained virtually the single source of diamonds worldwide, thus creating a sort of monopoly.
- In 2000, the De Beers model changed, due to factors such as the decision by producers in Russia, Canada and Australia to distribute diamonds outside of the De Beers channel, as well as rising awareness of blood diamonds that forced De Beers to ‘avoid the risk of bad publicity’ by limiting sales to its own mined products.
- Today, Russian diamond miner Alrosa has surpassed De Beers.
- Other diamond miners like Rio Tinto, Gem Diamonds, Petra Diamonds et al also give a tough competition to De Beers
- The competitive structure that is evident in this industry can be said to be a cross between an oligopoly and a consolidated industry
- Gemological experts have developed methods for grading diamonds based on their most important characteristics. These four characteristics are known as the 4Cs: Carat, Cut, Color, and Clarity. It is through this method that diamonds are assigned an aesthetic value. Though, the existing grading system is recently under question due to several issues
- Diamonds, however, have many other uses apart from Gems & Jewelry – including cutting, grinding, drilling and polishing tools, as well as heat sinks, specialty windows and bearings. Diamond applications have amplified by their use in Semiconductor devices, Medical instruments and so on.
- India maintains the position of top diamond polishing industry in the world. However, new diamond processing centres in China are challenging that and beneficiation policies have enabled processing centres at the source in some African nations.
- Issues of Conflict diamonds and Environmental harm have witnessed a priority in today’s consumers’ buying decisions, who are shunning diamonds that do not address such issues satisfactorily.
- Advancement in technology have also enabled to grow diamonds above earth, under the same conditions that form below earth.
- During the last decade, there have been major strides in production, awareness and acceptability of Lab-grown diamonds.