Naked Science Forum

Non Life Sciences => Geology, Palaeontology & Archaeology => Topic started by: moccacake on 17/02/2007 16:58:11

Title: why are diamonds precious?
Post by: moccacake on 17/02/2007 16:58:11
why are diamonds considered precious? who decides that it is?
Title: why are diamonds precious?
Post by: paul.fr on 17/02/2007 17:02:37
The people that already have the money and wealth, decide what is and is not of value. They also have the biggest guns and armies to impose their views on others.

Paul
Title: why are diamonds precious?
Post by: neilep on 17/02/2007 18:05:48
Demand !!

The fact that people want them, and that diamonds are rare is what makes diamonds precious........the fact that they are the hardest natural substance known to man adds to this.

Extraction/mining is not easy and expensive.....processing them and cutting them is also not cheap.

They are eternal......beautiful.....and therefore valuable !!.....however.....if there was no demand.....then their value would drop however rare they might be.
Title: why are diamonds precious?
Post by: another_someone on 17/02/2007 20:02:24
Also, in no small part to the historical cartel in diamonds, which is to a substantial extent still there (the De Beers group of companies accounts single handedly for 50% of the value of diamonds sold, and 40% of the value of diamonds mined - and so still have substantial control over the price).

Over the last few years (2004, 2005, 2006), De Beers has had to answer to the US courts on a number of price fixing charges.  The settlements are without admission of liability, but one can nonetheless draw what conclusions one wishes by the hundreds of millions of dollars it is costing De Beers not to admit to any liability.

http://en.wikipedia.org/wiki/De_Beers
Quote
In 2004, De Beers paid a $10 million fine to the US Department of Justice in settlement of a charge from 1994 that De Beers had conspired with General Electric to fix the price of industrial diamonds (i.e. those diamonds used for industrial purposes such as abrasives on drills). General Electric had been to court to face the charges, but the case was thrown out for lack of evidence. De Beers did not go to court, but paid the $10 million settlement ten years later.

In November 2005, De Beers announced that agreement had been reached, and a preliminary approval order issued, to settle the majority of civil class action price fixing suits filed against the company in the United States. Since then, in March 2006, the three remaining civil class action suits were added to the November settlement agreement, resulting in an overriding global settlement arrangement totalling US$295 million which has received preliminary court approval. This settlement does not involve any admission of liability on the part of De Beers but will bring an end to all outstanding class actions. It also stands as evidence of the De Beers commitment to compliance with competition law. De Beers continues to cooperate with the Court of the District of New Jersey to seek resolution of this litigation.

As part of the class action settlement, De Beers agreed to offer injunctive relief, which includes a general commitment to comply with the antitrust laws of the United States, and specific prohibited conduct acting as a cartel with third party producers and Sightholders. Injunctive relief is a typical component of class action settlements in the United States.

http://www.theatlantic.com/doc/198202/diamond
Quote
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. Until the late nineteenth century, diamonds were found only in a few riverbeds in India and in the jungles of Brazil, and the entire world production of gem diamonds amounted to a few pounds a year. In 1870, however, huge diamond mines were discovered near the Orange River, in South Africa, where diamonds were soon being scooped out by the ton. Suddenly, the market was deluged with diamonds. The British financiers who had organized the South African mines quickly realized that their investment was endangered; diamonds had little intrinsic value—and their price depended almost entirely on their scarcity. The financiers feared that when new mines were developed in South Africa, diamonds would become at best only semiprecious gems.

The major investors in the diamond mines realized that they had no alternative but to merge their interests into a single entity that would be powerful enough to control production and perpetuate the illusion of scarcity of diamonds. The instrument they created, in 1888, was called De Beers Consolidated Mines, Ltd., incorporated in South Africa. As De Beers took control of all aspects of the world diamond trade, it assumed many forms. In London, it operated under the innocuous name of the Diamond Trading Company. In Israel, it was known as "The Syndicate." In Europe, it was called the "C.S.O." -- initials referring to the Central Selling Organization, which was an arm of the Diamond Trading Company. And in black Africa, it disguised its South African origins under subsidiaries with names like Diamond Development Corporation and Mining Services, Inc. At its height -- for most of this century -- it not only either directly owned or controlled all the diamond mines in southern Africa but also owned diamond trading companies in England, Portugal, Israel, Belgium, Holland, and Switzerland.

De Beers proved to be the most successful cartel arrangement in the annals of modern commerce. While other commodities, such as gold, silver, copper, rubber, and grains, fluctuated wildly in response to economic conditions, diamonds have continued, with few exceptions, to advance upward in price every year since the Depression. Indeed, the cartel seemed so superbly in control of prices -- and unassailable -- that, in the late 1970s, even speculators began buying diamonds as a guard against the vagaries of inflation and recession.
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The diamond invention is far more than a monopoly for fixing diamond prices; it is a mechanism for converting tiny crystals of carbon into universally recognized tokens of wealth, power, and romance. To achieve this goal, De Beers had to control demand as well as supply. Both women and men had to be made to perceive diamonds not as marketable precious stones but as an inseparable part of courtship and married life. To stabilize the market, De Beers had to endow these stones with a sentiment that would inhibit the public from ever reselling them. The illusion had to be created that diamonds were forever -- "forever" in the sense that they should never be resold.

In September of 1938, Harry Oppenheimer, son of the founder of De Beers and then twenty-nine, traveled from Johannesburg to New York City, to meet with Gerold M. Lauck, the president of N. W. Ayer, a leading advertising agency in the United States. Lauck and N. W. Ayer had been recommended to Oppenheimer by the Morgan Bank, which had helped his father consolidate the De Beers financial empire. His bankers were concerned about the price of diamonds, which had declined worldwide.

In Europe, where diamond prices had collapsed during the Depression, there seemed little possibility of restoring public confidence in diamonds. In Germany, Austria, Italy, and Spain, the notion of giving a diamond ring to commemorate an engagement had never taken hold. In England and France, diamonds were still presumed to be jewels for aristocrats rather than the masses. Furthermore, Europe was on the verge of war, and there seemed little possibility of expanding diamond sales. This left the United States as the only real market for De Beers's diamonds. In fact, in 1938 some three quarters of all the cartel's diamonds were sold for engagement rings in the United States. Most of these stones, however, were smaller and of poorer quality than those bought in Europe, and had an average price of $80 apiece. Oppenheimer and the bankers believed that an advertising campaign could persuade Americans to buy more expensive diamonds.

Oppenheimer suggested to Lauck that his agency prepare a plan for creating a new image for diamonds among Americans. He assured Lauck that De Beers had not called on any other American advertising agency with this proposal, and that if the plan met with his father's approval, N. W. Ayer would be the exclusive agents for the placement of newspaper and radio advertisements in the United States. Oppenheimer agreed to underwrite the costs of the research necessary for developing the campaign. Lauck instantly accepted the offer.

In their subsequent investigation of the American diamond market, the staff of N. W. Ayer found that since the end of World War I, in 1919, the total amount of diamonds sold in America, measured in carats, had declined by 50 percent; at the same time, the quality of the diamonds, measured in dollar value, had declined by nearly 100 percent. An Ayer memo concluded that the depressed state of the market for diamonds was "the result of the economy, changes in social attitudes and the promotion of competitive luxuries."

Although it could do little about the state of the economy, N. W. Ayer suggested that through a well-orchestrated advertising and public-relations campaign it could have a significant impact on the "social attitudes of the public at large and thereby channel American spending toward larger and more expensive diamonds instead of "competitive luxuries." Specifically, the Ayer study stressed the need to strengthen the association in the public's mind of diamonds with romance. Since "young men buy over 90% of all engagement rings" it would be crucial to inculcate in them the idea that diamonds were a gift of love: the larger and finer the diamond, the greater the expression of love. Similarly, young women had to be encouraged to view diamonds as an integral part of any romantic courtship.

Since the Ayer plan to romanticize diamonds required subtly altering the public's picture of the way a man courts -- and wins -- a woman, the advertising agency strongly suggested exploiting the relatively new medium of motion pictures. Movie idols, the paragons of romance for the mass audience, would be given diamonds to use as their symbols of indestructible love. In addition, the agency suggested offering stories and society photographs to selected magazines and newspapers which would reinforce the link between diamonds and romance. Stories would stress the size of diamonds that celebrities presented to their loved ones, and photographs would conspicuously show the glittering stone on the hand of a well-known woman. Fashion designers would talk on radio programs about the "trend towards diamonds" that Ayer planned to start. The Ayer plan also envisioned using the British royal family to help foster the romantic allure of diamonds. An Ayer memo said, "Since Great Britain has such an important interest in the diamond industry, the royal couple could be of tremendous assistance to this British industry by wearing diamonds rather than other jewels." Queen Elizabeth later went on a well-publicized trip to several South African diamond mines, and she accepted a diamond from Oppenheimer.

http://www.theatlantic.com/doc/198202/diamond/7
Quote
The most serious threat to De Beers is yet another source of diamonds that it does not control—a source so far untapped. Since Cecil Rhodes and the group of European bankers assembled the components of the diamond invention at the end of the nineteenth century, managers of the diamond cartel have shared a common nightmare—that a giant new source of diamonds would be discovered outside their purview. Sir Ernest Oppenheimer, using all the colonial connections of the British Empire, succeeded in weaving the later discoveries of diamonds in Africa into the fabric of the cartel; Harry Oppenheimer managed to negotiate a secret agreement that effectively brought the Soviet Union into the cartel. However, these brilliant efforts did not end the nightmare. In the late 1970s, vast deposits of diamonds were discovered in the Argyle region of Western Australia, near the town of Kimberley (coincidentally named after Kimberley, South Africa). Test drillings last year indicated that these pipe mines could produce up to 50 million carats of diamonds a year—more than the entire production of the De Beers cartel in 1981. Although only a small percentage of these diamonds are of gem quality, the total number produced would still be sufficient to change the world geography of diamonds. Either this 50 million carats would be brought under control or the diamond invention would be destroyed.

De Beers rapidly moved to get a stranglehold on the Australian diamonds. It began by acquiring a small, indirect interest in Conzinc Riotinto of Australia, Ltd. (CRA), the company that controlled most of the mining rights. In 1980, it offered a secret deal to CRA through which it would market the total output of Australian production. This agreement might have ended the Australian threat if Northern Mining Corporation, a minority partner in the venture, had accepted the deal. Instead, Northern Mining leaked the terms of the deal to a leading Australian newspaper, which reported that De Beers planned to pay the Australian consortium 80 percent less than the existing market price for the diamonds. This led to a furor in Australia. The opposition Labour Party charged not only that De Beers was seeking to cheat Australians out of the true value of the diamonds but that the deal with De Beers would support the policy of apartheid in South Africa. It demanded that the government impose export controls on the diamonds rather than allow them to be controlled by a South African corporation. Prime Minister Malcolm Fraser, faced with a storm of public protest, said that he saw no advantage in "arrangements in which Australian diamond discoveries only serve to strengthen a South African monopoly." He left the final decision on marketing, however, to the Western Australia state government and the mining companies, which may or may not decide to make an arrangement with De Beers.

De Beers also faces a crumbling empire in Zaire. Sir Ernest Oppenheimer had concluded, more than fifty years ago, that control over the diamond mines in Zaire (then called the Belgian Congo) was the key to the cartel's control of world production. De Beers, together with its Belgian partners, had instituted mining and sorting procedures that would maximize the production of industrial (rather than gem) diamonds. Since there was no other ready customer for the enormous quantities of industrial diamonds the Zairian mines produced, De Beers remained their only outlet. In June of last year, however, President Mobuto abruptly announced that his country's exclusive contract with a De Beers subsidiary would not be renewed. Mobuto was reportedly influenced by offers he received for Zaire's diamond production from both Indian and American manufacturers. According to one New York diamond dealer, "Mobuto simply wants a more lucrative deal." Whatever his motives, the sudden withdrawal of Zaire from the cartel further undercuts the stability of the diamond market. With increasing pressure for the independence of Namibia, and a less friendly government in neighboring Botswana, De Beers's days of control in black Africa seem numbered.

Even in the midst of this crisis, De Beers's executives in London have been maneuvering to save the diamond invention by buying up loose diamonds. The inventory of diamonds in De Beers's vault has swollen to a value of over a billion dollars—twice the value of the 1979 inventory. To rekindle the demand for diamonds, De Beers recently launched a new multimillion-dollar advertising campaign (including $400,000 for television advertisements during the British royal wedding in July), yet it can be expected to buy only a few years of time for the cartel. By the mid-1980s, the avalanche of Australian diamonds will be pouring onto the market. Unless the resourceful managers of De Beers can find a way to gain control of the various sources of diamonds that will soon crowd the market, these sources may bring about the final collapse of world diamond prices. If they do, the diamond invention will disintegrate and be remembered only as a historical curiosity, as brilliant in its way as the glittering little stones it once made so valuable.
Title: why are diamonds precious?
Post by: scanner on 17/02/2007 21:21:08
Hopefully it will go the way of the Dutch Tulip Bubble of the 17th century


http://en.wikipedia.org/wiki/Tulip_mania

http://www.damninteresting.com/?p=469


Title: why are diamonds precious?
Post by: daveshorts on 19/02/2007 11:16:44
Also the idea of giving a diamond for an engagement ring isn't traditional, it is the result of an advertising campaign in the 20s/30s by De Beers... Driving up the demand and therefore the value.

It is now possible to make synthetic diamonds, but according to your favorite diamond suppliers they are not the same... apparently a couple of spectral lines are off by a couple of parts per million...
Title: why are diamonds precious?
Post by: neilep on 19/02/2007 14:19:05
Also the idea of giving a diamond for an engagement ring isn't traditional, it is the result of an advertising campaign in the 20s/30s by De Beers... Driving up the demand and therefore the value.

It is now possible to make synthetic diamonds, but according to your favorite diamond suppliers they are not the same... apparently a couple of spectral lines are off by a couple of parts per million...


Is there a limit to the size of an artificially made diamond ?

Does it cost just as much to make them than to mine them ?
Title: why are diamonds precious?
Post by: another_someone on 19/02/2007 15:03:42
There is a limit to the size that current technology can make artificial diamond - but there is no theoretical reason why that technology should not improve.

One advantage with artificial diamonds ought to be greater consistency, which for industrial purposes may be more important that actual size (i.e. no good if you get one giant diamond, if that is the only one of that size - industry need to be supplied with the same product over and over again).  Ofcourse, it might be argued that the jewelry trade value the very uniqueness that is the curse of industrial supply.

As for cost, I may be wrong, but I thought that was part of the price fixing case between GE and De Beers - GE was making the artificial diamonds, and De Beers managed to persuade them not to cause a total collapse in the price of the natural diamonds.  From what I gather, there has in any case been a general decline (at least in real terms) in the price of diamonds, and De Beers gradually loses its hold on the market (this despite there being ever more industrial uses for diamonds).

According to http://minerals.usgs.gov/ds/2005/140/diamondindustrial.pdf industrial diamonds are at their lowest price ever (even in absolute terms), having reached a peak in 1980.

Ofcourse diamond is actually not the most expensive form of carbon - that honour goes to C60 - but there is more genuine reason for that to be so.
Title: why are diamonds precious?
Post by: another_someone on 19/02/2007 15:58:07
(https://www.thenakedscientists.com/forum/proxy.php?request=http%3A%2F%2Fupload.wikimedia.org%2Fwikipedia%2Fcommons%2F8%2F8f%2FApollo_synthetic_diamond.jpg&hash=42cfd52fc16e9f4d0fdefb1aff7be892)


This is a synthetic diamond created by more modern chemical vapour deposition rather than the older high pressure methods - the older production would produce grains of no larger than 1mm across, but this was fine for use as abbrasives, etc.

I don't know whether the above is single or polycrystaline (I suspect the latter).  At present, there are still limits on the size of a single synthetic crystal, but it seems that polycrystaline diamond has been grown to tens of centimeters across.

http://en.wikipedia.org/wiki/Synthetic_diamond
Title: why are diamonds precious?
Post by: neilep on 19/02/2007 17:08:43
That's a beautiful white diamond....full of flaws and inclusions though............but..not knowing how large it is would mean that those falaws could still be invisible to the naked eye ..........though,  would detract from it's ability to reflect and refract light
Title: why are diamonds precious?
Post by: another_someone on 19/02/2007 17:24:16
Don't know the exact size of the above, since it is clearly a one off, proof of concept.

The company that produces (http://www.apollodiamond.com/) is saying that their main line of business is colourless synthetic diamonds in the range 1/4 to 1/2 carat.

They are seem to be looking both to the more exotic end of the industrial diamond market, and   the budget conscious end of the diamond jewelery business.

http://www.usatoday.com/tech/news/techinnovations/2005-10-06-man-made-diamonds_x.htm
Quote
This year, Apollo expects to grow diamonds as big as 2 carats. By the end of 2005, it might expand to 10 carats. The diamonds will probably start moving into the jewelry market as early as next year — at perhaps one-third the price of a mined diamond.

(the above article is mid 2005 - I cannot say whether those predictions were achieved).

Very possibly the fact the De Beer was excluded from the American market between 1994 and 2005 gave companies like Appolo a breathing space in which to develop.
Title: why are diamonds precious?
Post by: jolly on 25/02/2007 00:25:20
coz they cost loads of money.
Title: why are diamonds precious?
Post by: Michael Cohen on 12/03/2009 00:44:45
After analysing thousands of diamonds, DCLA has developed a new Transparency grading system, independent of other quality grades listed on the traditional diamond certificate.

Transparency is the degree to which a material transmits light, directly relevant to the cloudiness or haziness of the material.

Diamonds of any clarity, fluorescence and cut can in fact have Very Good or Excellent Transparency, making them attractive stones. Diamonds of any clarity, fluorescence and cut can also have Good or Medium Transparency - light return can be interrupted by multiple features of a given diamond.

The DCLA Transparency Grading System will now take all of these features into account to provide an even more comprehensive assessment of a diamond.

DCLA Transparency Scale:Excellent  -  Completely transparent, no light interruption, no haze or cloud
Very Good  -  Transparent, minimal light interruption, very light haze or cloud, difficult to detect
Good  -  Transparent, slight visible haze or cloud, detectable
Medium  -  Semi-Transparent, marked light interruption, moderate haze or cloud, easy to detect
Poor  -  Semi-Transparent, very little light passes through, heavy haze or cloud

Effective September 15 2008, all DCLA Diamond Certificates will include the diamond transparency.

In addition, the DCLA has also split the traditional Finish grade on our Diamond Certificate into the dual features of Polish and Symmetry. This will provide a fuller, more detailed expression of the overall diamond make to both consumers and the trade.
Title: why are diamonds precious?
Post by: itisus on 27/03/2009 05:42:44
It's all rather silly except for the industrial uses.  Diamonds look a lot like glass, not nearly as interesting as a good turquoise or emerald or a lot of other stones.  They are handy for refugees though.
Title: why are diamonds precious?
Post by: stereologist on 05/04/2009 23:31:57
I'm sorry, but diamonds (I owN and want none) are not like glass at all. An untrained eye quickly sees how much more brilliant they are.

If you are interested in gems, precious and semiprecious, then you might want to take a look at the rules and regulations of stones. By definition 4 stones are precious. Everything else is semiprecious. Stones are considered natural stones under an extraordinary range of alterations besides faceting. Stones can be modified by heat or radiation treatments. Stones can be placed in boiling salt solutions to alter colors. On the other hand injecting oils into emeralds to hide small fractures is deemed wrong, although commonly done.
Title: why are diamonds precious?
Post by: tangoblue on 01/05/2009 11:38:19
cos they are so old, that old in fact they were being made when the earth was still a big ball of firey rock.  Also the heat needed to make them was unbelivable.

Read this:http:http://www.gemsutra.com/diamonds.html (http://www.gemsutra.com/diamonds.html)
               http://www.original-diamonds.com/jewelry_knowledge_facts.php (http://www.original-diamonds.com/jewelry_knowledge_facts.php)