Society as a whole has become more and more dependent on diamonds as the years go by. From finding this rare gem in the depths of the earths’ crust, to it now being used as a certain love gesture. The rarity of this beautiful gem has changed, however has the price of diamonds changed accordingly with its value (placed upon by society). This essay will effectively argue that the price of diamonds is too high in the market in the present day as a result of various economic factors. The essay will give information on diamond cartels and how these cartels had been influencing the price of the diamonds. Furthermore, the essay will give rise to the economic theories that affect these prices and how the price is controlled in the market.
Investopedia refers to a cartel as an organization that is created from a formal agreement between a group of competing producers to regulate supply in order to effectively manipulate the prices of the good or service, in this case diamonds. These collection of businesses/countries act together as a single producer to influence prices of the goods/services by controlling production. However, a cartel has less influence on the market than a monopoly (Investopedia, 2009).
Initially diamond trading occurred only between two countries, Brazil and India. Diamonds were scarce until the mid-19th century when diamonds were discovered in South Africa, and so began the diamond rush of modern times (Goldschein, 2011). Harry Oppenheimer took over the DeBeers mining company and has turned it into an international conglomerate. Each year, the DeBeers determine the total of diamonds it plans to sell and each producer is guaranteed a fixed percentage of total output by them. The diamonds are bought and marketed thro...
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Deep within African mines, elusive diamonds lay enveloped in the Earth’s crust. Possessing much influence, beauty, and tension, nature’s hardest known substance causes parallel occurrences of unity and destruction on opposite sides of the globe. Diamonds, derived from the Greek word "adamas", meaning invincible, are formed deep within the mantle, and are composed entirely from carbon. Moreover, only under tremendous amounts of heat and pressure can diamonds form into their preliminary crystal state. In fact, diamonds are formed approximately 150km- 200km below the surface and at radical temperatures ranging from 900-1300 C°. When these extremes meet, carbon atoms are forced together creating diamond crystals. Yet how do these gems, ranking a ten on Moh’s hardness scale, impact the individual lives of millions of people besides coaxing a squeal out of brides-to-be? These colorless, yellow, brown, green, blue, reddish, pink, grey and black minerals are gorgeous in their cut state, but how are these otherwise dull gems recognized and harvested? Furthermore, how and why is bloodshed and violence caused over diamonds in Africa, the supplier of approximately 65% of the world’s diamonds? (Bertoni) The environmental, social, and economic impact of harvesting, transporting, and processing diamonds is crucial because contrary to popular belief, much blood has been spilled over first-world “bling”.
DeBeers founded in 1880’s became the world’s largest diamond mining and trading company in the world. When DeBeers was established it controlled around 45% of the world’s diamond production and sold over 80% of all diamonds produced. DeBeers used underhand tactics to remove smaller diamond mines and punished those who tried to break away from the DeBeers “empire”.
In Nicky Oppenheimer's speech, he states that diamonds are a valuable luxury desired by many and DeBeers strives to preserve their value. Furthermore, he claimed that it is essential for DeBeers to "be able to clear the market of all rough diamond production". Other companies who deal with this luxury will be motivated by evil greed, so DeBeers has the duty to ensure that these types of companies will not gain power. From the discovery of diamonds in certain countries in Africa, DeBeers has allowed their economies to drastically grow. Oppenheimer also brings up an interesting point when he compares how similar the diamond and oil industries are with their regulations standards, which lessens the negative views on DeBeers' brand, since they
Since the discovery of diamonds, the precious gem has always remained an item of luxury and great beauty and one that requires a great deal of financial sacrifice in order to acquire. Prices of diamonds have remained relatively stable over the last 100 years while prices of other commodities have fluctuated heavily (Hauser, 2002). Diamonds are a relatively rare commodity which gives them a high value and with the help of De Beer’s advertising campaign, spanning the last six decades, that high value appeal has been sustained. However, the high price of diamonds cannot be solely down to its rarity as the discovery of new deposits over the past decades has led to an increase in the number of diamonds available and thus since they aren’t as rare as they once were, the prices should’ve dropped. This essay argues that the price of diamonds is too high due to the fact that although the amount of diamonds available has increased over time, prices have remained relatively stable. The essay will show that there are powerful entities influencing the price of diamonds in such a way that the current and recent prices have been much greater compared to what they were and are meant to be. The essay will achieve its objectives through outlining the role of the diamond cartel in influencing the price of diamonds and it’ll seek to highlight the powerful entities controlling the cartel and explain how the cartel managed to set and maintain high prices.
In “ “Blood Diamonds” and Africa’s Armed Conflicts in the Post – Cold War Era, “ Orogun (2004) said that diamonds are referring as “clean stones”. This article explains about the black market is really happening in African. I am using this article to support how the black market of diamond trades is still not regulated, and they defined it as “licit” trade.
Diamonds were not bought as a store of value, they could not be traded in the same w...
Some of the highest producing diamond mines are countries in Africa. Countries that had some of the highest rate of conflict were Angola, The Democratic Republic of Congo, Sierra Leone, and Liberia. The ...
It’s hard to imagine that a mineral could be fueling wars and funding corrupt governments. This mineral can be smuggled undetected across countries in a coat pocket, then be sold for vast amounts of money. This mineral is used in power tools, parts of x-ray machines, and microchips but mostly jewelry. Once considered the ultimate symbol of love, the diamond has a darker story. "Blood" diamonds or "conflict" diamonds are those mined, polished, or traded in areas of the world where the rule of law does not exist. They often originate in war-torn countries like Liberia, Sierra Leone, Angola, and Côte d'Ivoire were rebels use these gems to fund genocide or other questionable objectives. Even with a system known as the Kimberly process which tracks diamonds to prevent trade of these illicit gems, infractions continue as the process is seriously flawed. The continuation of the blood diamond trade is inhuman, and unethical, and in order to cease this illicit trade further action to redefine a conflict diamond, as well as reform to the diamond certification prosess is nessasary.
Out of all the earth’s major natural resources, diamonds are the most sought after and most mysterious. Throughout history, the virtuosity and resistance of diamonds have caused fighters and lover’s great pain and happiness. For centuries, the value of the diamond commodity became increasingly popular. However, it wasn’t until the mid 1900s, when diamonds permanently made their signature as the world’s most indispensable symbol of love and affection (Howard, Vick 2008). Soon after, diamond rings became the 21st century standard of engagement rings. Without a doubt, everybody in society knows how valuable this commodity is. Nonetheless, what truly makes this commodity more valuable are the stages it goes through from the diamond mines to th...
...mited . After that , it appears Rugman which will provide a new concept or idea that is more innovative and relevant in the form of a small open economy which was called ' double diamond''. For example , in case of Canada , North America integrated diamonds including both Canada and the United State , not only Canada sake only , is more relevant. Two diamonds, which awakened by criticism Rugman and D' Cruz . There is a need to build back up that administrators if both the inside and outside or countries do not compete in the global rankings in terms of the involvement of councilors. Existence , profits and growth. Although Rugman and D' Cruz North American diamond shape work , it corresponds with the ubiquitous party such as Canada and New Zealand. But he does not harms small countries such as Korea and Singapore .
Santarossa, B. (2004, January 13). Diamonds: Adding lustre to the Canadian economy. Retrieved November 06, 2017, from https://www.statcan.gc.ca/pub/11-621-m/11-621-m2004008-eng.htm
iii. India dominates the world’s cut and polished diamonds (CPD) market. In value terms, the country accounts for approximately 55 percent of global polished diamond market and nearly 9 percent of the jewellery market. According to GJEPC's provisional estimate, cut and polished diamonds registered 19.06 percent growth in exports at US$ 7.11 mn.
The value of diamonds lies on their physical properties that make them suitable for many applications. Natural diamonds are only of high value if they are scarce in nature. Realizing this, De Beers Consolidated Mines was formed to control the supply of diamonds from mines across the world. The diamond market is influenced by mine production, rough diamond distribution, preparation/cutting, and retail markets. The project will be concentrating on the retail markets for diamonds and other high end jewelry.
The film marker is trying to raise awareness of the illicit conflict diamond trade and reinforcing the Kimberley process1 and showing how it will stem the flow of conflict diamonds. This is successful mainly due to the public outburst after the movie. The great impact of the movie has caused diamond companies like De Beers2 to start a pre-emptive PR (public relationship) campaign, even before the movie was released to inform people that their diamonds are conflict-free.
The third determinant of the diamond – related and supporting industries looks at the industry suppliers and...