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It was a great honour as well as a
pleasure to be invited to partake in the development
of this web-site with Carlo Paolillo & C.,
partner with De Beers in an important
project for the Millennium.
Diamonds
are the subject on which my Company - De Beers - have
been the World's Experts since 1888. Indeed, my report
will be as much about time as it is about diamonds.
After all, the two are inextricably linked, as everybody
knows the slogan "A diamond is forever". This
has been the theme of De Beers advertising since 1947
and it encapsulates both the enduring physical nature
of diamonds (the hardest substance known to man) and
what they consequently symbolise - namely the enduring
relationships between people around the world.
I am going to attempt to telescope 3 billion years of
history of the diamond.
What are diamonds? They are, quite simply, pure, crystallised
carbon formed at a depth of up to 250 kilometres beneath
the Earth's crust under unimaginable heat and pressure,
and brought to the Earth's surface by volcanic action.
I am sure that you have all seen the Eiffel Tower in
Paris and probably travelled up it by elevator. To capture
the concept of the pressure required to crystallise
carbon into diamond, try to imagine turning the Eiffel
Tower upside down and placing the tip on the palm of
your hand!
The youngest diamonds are believed by the geologists
to have been formed about 800,000,000 years ago, whilst
the oldest are thought to be 3.3 billion years old.
This great antiquity may help you put the relative cost
of your diamond jewellery against that of your antique
furniture into a new perspective.
Although the earliest written records of diamonds are
from 800 BC (or 2,800 years ago) it is widely believed
that mankind first discovered diamonds in the Golconda
district of India around
2000 BC - or four Millennia ago.
It was the ancient Greeks who gave the world the name
"diamond". They called it "Adŕmas",
which means "the unconquerable".
Unconquerable because it was so hard that no one knew
how to cut it. And so it remained for about 2000 years
until someone discovered that you could use another
diamond to cut a diamond - a very slow painstaking and
laborious job.
Even with today's modern technology it takes many hours
of supreme craftsmanship and skill to cut
and polish58 facets of a brilliant
cut to form a 1.00 carat.
India remained the sole source of diamonds for 3,700
years until the Portuguese discovered alluvial sources
in Brazil in 1723.
Because of the British East India Company's association
and trade with India, London had, by that time, become
the world centre for the trading of rough diamonds -
having taken over from the Venetian merchant empire.
So the Portuguese shipped their Brazilian diamonds across
to London. The London diamond merchants knew very well
that diamonds could only come from India, so they rejected
Brazilian diamonds as fakes. Portuguese merchants then
hit upon the brilliant - if extremely hazardous idea
of sending their diamonds to India to be mixed with
the local Golconda production and then re-exported to
London. The London merchants accepted them as real diamonds.
Imagine the hazards, in those days, of sending goods
by sea half way round the world (including the Cape
of Good Hope) to India and from there to London.
Although the new find in Brazil temporarily destabilised
the market in 1725 because it increased the supply compared
with India as the only source, the combined availability
was still so limited that… diamonds remained the exclusive
prerogative of Royalty in the West and of Mughal Emperors
and Maharajahs in the Indian sub-continent and Central
Asia. It was not until the discovery of diamonds in
South Africa in 1866 and the development of the De Beers
and Kimberley mines that they could suddenly be within
the reach of the nobility and aristocracy of the world's
stronger economies.
Nowadays diamonds are mined in Southern Africa, Russia,
Australia, Brazil, China and Canada started
its first mine production at the end of 1998.
The global production of rough diamonds has increased
50-fold over the last century.
Whilst this sounds dramatic, I must say that - to get
some idea of the relative rarity of this most fascinating
and precious gift of nature - all the polished diamonds
of gem quality ever produced in the world in the last
4,000 years would not fill a room 4.5m cubic!
You may not be aware that, in converting a rough diamond
into a twinkling brilliant (the ancient Greeks thought
they were splinters of stars) which many of you are
wearing now, the average weight loss is about two-thirds
of the original rough weight.
You may be interested to know that within this rare
commodity certain sizes are rarer than others. For example,
of all the polished diamonds cut by the world's craftsmen:
only one in sixty is over 1/5 of a carat; only one in
five hundred is over ˝ carat; only one in two thousand
is over 1 carat and only one in seven million is a top
colour/top quality "D flawless" diamond of
1.00 carat or more.
This relative rarity, within an already rare commodity,
will explain why the De Beers Centenary Diamond (revealed
in our Centenary year of 1988 at 273.85cts D/Flawless)
was insured for US$100 million! So please be proud of
the diamonds you own. They share the same heredity.
Treasure them. Wear them. It's a tragedy not to let
them sparkle in the sunlight or candlelight to make
you feel good and to dazzle and fascinate those who
see you wearing them.
Whilst we are on the subject of exceptional diamonds
I thought you would like to see the De Beers Millennium
Star - 203 carat D Flawless pear-shaped diamond which
will be one of the highlights of the London Millennium
Dome throughout the Year 2000. Mr. Harry Oppenheimer,
who has been in the business for 70 years and has seen
more wonderful diamonds than anyone, says it is probably
the most beautiful diamond he has ever seen.
Here you can see its relative size, being held by Sophie
Marceau.
When did the romantic symbolism of diamonds start?
It is very difficult to say. Because they were "adamŕs"
the "unconquerable" for thousands of years,
they were worn in their rough or, single-facet state
around the necks, on the fingers or on the sword-hilts
of warrior kings and Emperors as a talisman to endow
the wearer with their unconquerability.
However, in 1477 AD, archduke Maximilian - The Holy Roman Emperor made
the symbolic gesture of presenting his bride-to-be Maria
of Burgundy, with a diamond ring to celebrate their
betrothal to be married. He wanted to show her - and
the World - that their union would be as enduring as
the diamonds in her ring.
Nowadays, three-quarters of brides receive the same
symbolic token of eternal love from their fiancés on
their engagement.
Of course, when most people think about diamonds they
tend to think of South Africa. So much so, in fact,
that until recently in China real diamonds - as opposed
to synthetic imitations - were called "South African
diamonds". This perception dates back to the Great
Diamond Rush in Kimberley in the 1860s - an event which,
more than any other, transformed South Africa from a
rural farming economy into the industrial giant of Africa.
It may, therefore, surprise you to learn that South
Africa is no longer the world's major producer of gem
diamonds - although it is still among the top three
- but has been superseded by its Southern African neighbour,
Botswana, and by Russia.
How is it that a South African company, founded on the
Kimberley diamond fields more than 100 years ago, still
dominates the diamond world? For the answer to that
question we have to go back to the early 1930s when
Sir Ernest Oppenheimer, then De Beers' Chairman, founded
the Central Selling Organisation (CSO) to bring stability
to the world-wide diamond industry, which was suffering
the effects of the Great Depression.
This producers' co-operative has, for the last 60 years,
maintained a stable and prosperous diamond industry
by managing the supply of rough gem diamonds to the
world markets. Sir Ernest realised that price fluctuations,
which are accepted as normal in the case of most raw
materials, would undermine confidence in a high-value
luxury products like diamonds.
De Beers' policy is, therefore, to support price stability
by tailoring supplies to the cutting centres according
to demand. The enduring success of this policy rests
on two facts: the company's extensive financial resources,
which enable the Central Selling Organisation to hold
temporary surpluses of diamonds in a buffer stock until
demand improves; and its ability, through long expertise
and an intimate knowledge of the market, to maintain
a price structure for the 14,000 categories into which
diamonds are sorted and valued.
This marketing system benefits everyone associated with
diamonds: the producing nations, the dealers and cutters,
the jewellers and, most important of all, the people
who buy and wear diamonds, whose willingness to invest
a large sum of money in a luxury product would be seriously
affected by price volatility.
One of the aims of this system, of course, and it was
certainly uppermost in Sir Ernest's mind when he created
the CSO in 1934, was the way predictable pricing in
a stable market would protect employment in the diamond
mines of South Africa. And that remains one of our major
concerns today. De Beers own mines and those of its
partnerships in Botswana and Namibia
together produce more than 50% of the world's' rough
gem diamonds.
In Botswana
diamond production is that country's most important
economic activity in terms of foreign exchange earnings,
public revenue and contributions to GDP. It is, in fact,
the reason why today Botswana is one of most successful
economies, not only in Africa, but in the world.
I said earlier that South Africa was no longer the largest
source of diamonds, although it remains the world's
largest source of very large diamonds - such as the
Centenary and the 533 carat Cullinan I, which forms
part of the British Crown Jewels.
Nevertheless, if Kimberley's Big Hole where the diamond
rush began, is no longer more than a tourist attraction,
Kimberley itself remains the headquarters of De Beers.
From mining the deep seas off the Namibian coast, to
beach mining in South Africa and Namibia (where we have,
quite literally, pushed back the sea), to the giant
open-cast mines of Botswana and the state of the art
underground mine at Finsch in the Northern Cape, De
Beers has invented and developed the technology to mine
diamonds in every climate and under all conditions.
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