What Gives a Diamond Value?

You will have almost certainly heard the stories that abound about the commercial diamond industry. They are actually really common, and their supply is tightly controlled to create artificial demand. Or, they are not that special and you can grow a diamond in a lab for cents on the dollar. All too often these stories come from people who cannot afford diamonds and resent those who can, an understandable but not terribly sensible position to adopt! Let us take a look at the real story of diamond production and values.

What Gives a Diamond Value?
[ image: unsplash by rhii photography ]

 

How Common Are Diamonds? 

There are certainly many diamonds all over the world, and they are mined in Australia, Southern Africa (South Africa, Namibia and Botswana especially) and, surprisingly, Russia. However, most of the diamonds produced from all these mines are small, ugly stones that are used for industrial purposes, in cutting and abrading industries, as well as being mounted on drill bits for mining. Approximately 80% of a diamond mine's output is used for these prosaic and unlovely purposes. 

This means that only 20% makes it into the field of interest of jewelers, and once again a large number of these stones will be too small or too imperfect to have the investment of time and energy in cutting the diamonds into a suitable shape. So, now we are looking at perhaps one or two percent of the diamond industry's output as being large stones that seem to have few flaws and that look as though they will benefit from the attentions of a skilled cutter. 

It can be hard to tell what a stone is like before it has been cut, as there may be hidden flaws, fractures waiting to shear the stone in two under the slightest pressure, and discolorations and other issues that will only be laid bare once the cutter has begun their work. Ultimately, the number of large, engagement ring worthy stones of sufficiently high carat-weight, color, and clarity, is, in fact, very low. And this is why most large diamonds (over one carat or so) come with certificates of provenance. This would not be possible with a huge stockpile of the stones!

 Lab Grown Stones 

While it certainly is possible to grow a diamond in laboratory conditions, the process is neither easy nor cheap. There are two ways of growing diamonds – both of which involve starting out with a genuine diamond 'seed'. One process puts the seed and carbon graphite under tremendous pressure, while the other uses a dense, carbon-rich gas to build on the seed, atom by atom. Laboratory grown diamonds must be certified as such, and there are already complaints about the fledgling industry, with claims environmental and ecological issues with the huge amount of energy required to produce the stones. While lab-grown diamonds are cheaper than authentic stones, they are still not one would call budget-friendly, and many investors are sticking to the real thing instead of embracing the new technology. 

Blood Diamonds 

There certainly is a worldwide black-market trade in so-called blood diamonds – diamonds used to prop up dictatorships and terrorist organizations, often mined by what amounts to practically slave labor and not at all an association that one wants connected to an engagement ring and other happy occasions! 

Fortunately, the world-wide diamond trade is on the case, and all legal diamonds are completely trackable from their first emergence from the ground through to retail sale. Every legal diamond will come with a certificate of authenticity that not only provides details about the stone, which will help you value your stone, but they will state the stone's provenance too, so you have complete peace of mind. 

Now you can refute some of the more common myths about diamonds to your unbelieving friends, check out the Pricescope diamond price calculator to assess the value of your stones.