Diamonds by David Keites

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.


David Keites

November 1999

The Long Story
The Diamond
The Cultured Pearls
The Precious Stone
The Coral