Gemstones

A large trade in gem-grade diamonds exists. Unlike precious metals such as gold or platinum,
gem diamonds do not trade as a commodity: there is a substantial mark-up in the retail sale of
diamonds. Contrary to popular belief,
there is a well-established market for resale of polished diamonds (e.g. pawnbroking, auctions,
second-hand jewellery stores, diamantaires, bourses, etc.). One hallmark of the trade in gem-quality
diamonds is its remarkable concentration: wholesale trade and diamond cutting is limited to just a few
locations. 92% of diamond pieces cut in 2003 were in Surat, Gujarat, India.[27] Other important centers
of diamond cutting and trading are Antwerp, where the International Gemological Institute is based,
London, New York, Tel Aviv, and Amsterdam. A single company—De Beers—controls a significant proportion
of the trade in diamonds. They are based in Johannesburg, South Africa and London, England. One
contributory factor is the geological nature of diamond deposits: several large primary kimberlite-pipe
mines each account for significant portions of market share (such as the Jwaneng mine in Botswana, which
is a single large pit operated by De Beers that can produce between 12.5 to 15 million carats of diamonds
per year[28]), whereas secondary alluvial diamond deposits tend to be fragmented amongst many different
operators because they can be dispersed over many hundreds of square kilometres (e.g. alluvial deposits in Brazil).

The production and distribution of diamonds is largely consolidated in the hands of a few key players,
and concentrated in traditional diamond trading centers. The most important being Antwerp, where 80% of
all rough diamonds, 50% of all cut diamonds and more than 50% of all rough, cut and industrial diamonds
combined are handled.[citation needed] This makes Antwerp the de facto 'world diamond capital'. New York,
however, along with the rest of the United States, is where almost 80% of the world's diamonds are sold,
including auction sales. Also, the largest and most unusually shaped rough diamonds end up in New York.
[citation needed] The De Beers company, as the world's largest diamond miner holds a clearly dominant
position in the industry, and has done so since soon after its founding in 1888 by the British imperialist
Cecil Rhodes. De Beers owns or controls a significant portion of the world's rough diamond production
facilities (mines) and distribution channels for gem-quality diamonds. The company and its subsidiaries
own mines that produce some 40 percent of annual world diamond production. At one time it was thought
over 80 percent of the world's rough diamonds passed through the Diamond Trading Company (DTC, a subsidiary of De Beers)
in London[1], but presently the figure is estimated at around 40 percent[2]. De Beers sold off the vast
majority its diamond stockpile in the late 1990s - early 2000s[3] and the remainder largely represents
working stock (diamonds that are being sorted before sale)[4]. This was well-documented in the press
but remains little-known to the general public.

The De Beers diamond advertising campaign is acknowledged as one of the most successful and innovative
campaigns in history. N. W. Ayer & Son, the advertising firm retained by De Beers in the mid-20th century,
succeeded in reviving the American diamond market and opened up new markets, even in countries where no
diamond tradition had existed before. N.W. Ayer's multifaceted marketing campaign included product placement,
advertising the diamond itself rather than the De Beers brand, and building associations with celebrities
and royalty. This coordinated campaign has lasted decades and continues today; it is perhaps best captured
by the slogan "a diamond is forever".

Further down the supply chain, members of The World Federation of Diamond Bourses (WFDB) act as a medium
for wholesale diamond exchange, trading both polished and rough diamonds. The WFDB consists of independent
diamond bourses in major cutting centres such as Tel Aviv, Antwerp, Johannesburg and other cities across the
USA, Europe and Asia.

In 2000, the WFDB and The International Diamond Manufacturers Association established the World Diamond
Council to prevent the trading of diamonds used to fund war and inhumane acts.

WFDB's additional activities also include sponsoring the World Diamond Congress every two years, as well
as the establishment of the International Diamond Council (IDC) to oversee diamond grading.