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History & Diamond Production

Diamonds are thought to have been first recognized and mined in India, where significant alluvial deposits of the stone could then be found along the rivers Penner, Krishna and Godavari. Diamonds have been known in India for at least 3000 years.

The most familiar usage of diamonds today is as gemstones used for adornment a usage which dates back into antiquity. The dispersion of white light into spectral colours, is the primary gemmological characteristic of gem diamonds. In the twentieth century, experts in the field of gemmology have developed methods of grading diamonds and other gemstones based on the characteristics most important to their value as a gem. Four characteristics, known informally as the four Cs, are now commonly used as the basic descriptors of diamonds: these are carat, cut, colour, and clarity.

 

The Diamond Industry

The diamond industry can be broadly separated into two basically distinct categories: one dealing with gem-grade diamonds and another for industrial-grade diamonds. While a large trade in both types of diamonds exists, the two markets act in dramatically different ways.

 

Gem Diamond Industry

A large trade in gem-grade diamonds exists. Unlike precious metals such as gold or platinum, gem diamonds do not trade as a commodity. One hallmark of the trade in gem-quality diamonds is its remarkable concentration: wholesale trade and diamond cutting is limited to a few locations. 92% of diamond pieces cut in 2003 were in Surat, Gujarat, India. Other important centres of diamond cutting and trading are Antwerp, London, New York, Tel Aviv, Amsterdam.

The production and distribution of diamonds is largely consolidated in the hands of a few key players, and concentrated in traditional diamond trading centres. 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. 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 at auction. Also, the largest and most unusually shaped rough diamonds end up in New York. 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, but presently the figure is estimated at less than 50 percent.

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.

 

Industrial Diamond Industry

The market for industrial-grade diamonds operates much differently from its gem-grade counterpart. Industrial diamonds are valued mostly for their hardness and heat conductivity, making many of the gemmological characteristics of diamond mostly irrelevant. This helps explain why 80% of mined diamonds (equal to about 100 million carats annually), unsuitable for use as gemstones and known as bort, are destined for industrial use. In addition to mined diamonds, synthetic diamonds found industrial applications almost immediately after their invention in the 1950s; another 3 billion carats (600 metric tons) of synthetic diamond is produced annually for industrial use.

The dominant industrial use of diamond is in cutting, drilling, grinding, and polishing. Most uses of diamonds in these technologies do not require large diamonds; in fact, most diamonds that are gem-quality except for their small size, can find an industrial use.

Diamonds are embedded in drill tips or saw blades, or ground into a powder for use in grinding and polishing applications. Specialized applications include use in laboratories as containment for high pressure experiments (see diamond anvil), high-performance bearings, and limited use in specialized windows.

With the continuing advances being made in the production of synthetic diamonds, future applications are beginning to become feasible. Garnering much excitement is the possible use of diamond as a semiconductor suitable to build microchips from, or the use of diamond as a heat sink in electronics.

 

Mining, Sources and Production

Only a very small fraction of the diamond ore consists of actual diamonds. The ore is crushed, during which care has to be taken in order to prevent larger diamonds from being destroyed in this process and subsequently the particles are sorted by density. Today, diamonds are located in the diamond-rich density fraction with the help of X-ray fluorescence, after which the final sorting steps are done by hand. Before the use of X-rays became commonplace, the separation was done with grease belts; diamonds have a stronger tendency to stick to grease than the other minerals in the ore.

Historically diamonds were known to be found only in alluvial deposits in southern India. India led the world in diamond production from the time of their discovery in approximately the 9th century BCE to the mid-18th century AD, but the commercial potential of these sources had been exhausted by the late 18th century and at that time India was eclipsed by Brazil where the first non-Indian diamonds were found in 1725.

Diamond production of primary deposits (kimberlites and lamproites) only started in the 1870’s after the discovery of the Diamond fields in South Africa. Production has increased over time and now an accumulated total of 4.5 billion carats have been mined since that date. Interestingly 20% of that amount has been mined in the last 5 years alone and during the last ten years 9 new mines have started production while 4 more are waiting to be opened soon. Most of these mines are located in Canada, Zimbabwe, Angola, and one in Russia.

While no commercial diamond production exists in the US, Arkansas and Colorado are the only states to have a verifiable source of diamonds.

Today, most commercially viable diamond deposits are in Russia, Botswana, Australia and the Democratic Republic of Congo. In 2005, Russia produced almost one-fifth of the global diamond output, reports the British Geological Survey. Australia boasts the richest diamondiferous pipe with production reaching peak levels of 42 metric tons (41 LT/46 ST) per year in the 1990’s.

There are also commercial deposits being actively mined in the Northwest Territories of Canada, Siberia (mostly in Yakutia territory, for example Mir pipe and Udachnaya pipe), Brazil, and in Northern and Western Australia. Diamond prospectors continue to search the globe for diamond-bearing kimberlite and lamproite pipes.