According to sources, the earliest diamonds were found in the 4th century BC.
The majority of them were transported between India and China through the so-called Silk Road. Once discovered, diamonds were appreciated for strength and brilliance, as well as the ability to refract light and engrave metal.
Over the years, people discovered that diamonds could be worn as adornments, used as cutting tools, and some cultures went so far as to believe diamonds can serve as a talisman to ward off evil.
For a long time, people believed that India and surrounding areas were the only diamond mines. Once these mines drained, the search started. That’s how we discovered that diamonds are placed all around the globe if you only know where to look.
Diamond mining history
In 1725, the first alternative source of diamonds was found in Brazil. However, there were not enough diamonds to meet global demands. That’s how the search expanded. In the mid-19th century, diamonds were discovered in South Africa. Thousands of diamonds were found in a place that later became known as Kimberly Mine. This is when the world figured diamonds are everywhere, you should just search carefully. In 1880s, the Englishman Cecil John Rodes formed De Beers Consolidated Mines without realizing the company would become a dominant diamond miner and a key figure in the diamond market for many years to come. After a massive drop in diamond prices in 1919, De Beers decided to do something yet unseen. Create a marketing campaign under the slogan “A diamond is forever.”
Since many couples, ever since the 15th century, used to put diamonds on their wedding rings, De Beers decided to make it a rule. Since diamond is the hardest material on Earth, they represent something ever-lasting. And so does marriage. Using this trick, De Beers increased diamond demand and price again. This move led to having 78% of diamond engagement rings sold today.
After De Beers, Russian company ALROSA discovered a large diamond mine in Siberia and became the only owner. That’s how we got the first more significant diamond market split. Afterward, we got some smaller players such as Debswana Diamond and Rio Tinto.
Records of diamond prices have been held since 1960s when the price was $2,700 for carat.
Since the price depends on diamond’s 4C’s (carat, color, cut, and clarity), it’s essential to check all those before determining the price. Thanks to De Beers’ intelligent marketing move, we see an increase in diamond demand every year. Leading buyer is the USA where the need for diamond wedding rings is the largest. Lately, second place is taken by India and China, for the same purpose, while we’ve got UAE and Australia as new buyers.
Thanks to enormous demand, the diamond price was increasing over the years as well. According to Statista, the cost of polished diamonds increased 2.5 times in 1970s compared to the decade before. Between 2000s and 2010s, we saw an increase of almost $10,000 per carat, while nowadays, one carat of polished diamonds is worth a bit over $30,000. This shows us that demand is rising and supply is having a hard time following.
Global crises are affecting the diamond market less than any other. When we had the 2008 crash, the biggest one in modern history, and shares became practically worthless, the diamond price dropped moderately and recovered fast. The same thing happened with Covid-19 pandemics. Thanks to the ability to sell products online, retailers managed to survive and still demand more diamonds. On the other hand, producers were innovative and allowed their buyers a short grace period to keep them coming.
According to research, diamond prices are expected to tumble a bit more by 2022, when we can see price growth. Since the last quarter of 2020 showed that diamonds are still the most valued gift, the end of 2021 should be even better and set a solid ground for price growth in 2022 and further.
Despite their start as jewelry and rough material, nowadays, diamonds are a valuable investment asset. Thanks to market diversification and many new producers, prices became more transparent, and investment is now safer. If you are looking for something that can be highly profitable in the long run, you should definitely consider diamonds.