Gem Diamond Industry

A large trade in gem-grade diamonds exists, known as the gem diamond industry. Unlike precious metals such as gold or platinum, gem diamonds do not trade as a commodity: there is a substantial mark-up in the sale of diamonds, and there is not a very active market for resale of diamonds. One hallmark of the diamond industry 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.[1] Other important centers of diamond cutting and trading are Antwerp, London, New York, Tel Aviv, Amsterdam. A single company in the diamond industry — De Beers — controls a significant proportion of the trade in diamonds. They are based in Johannesburg, South Africa and London, England.

In the diamond industry, the production and distribution of diamonds is largely consolidated in the hands of a few key players in the diamond industry, and concentrated in traditional diamond trading centers. The most important center for the diamond industry 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 capital' of the diamond industry. 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 industry 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 of the diamond industry.

Further down the diamond industry 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.

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