The Diamond Industry The Diamond Course - Diamond Council of

The Diamond Industry The Diamond Course - Diamond Council of

The Diamond Industry The Diamond Course Diamond Council of America © 2015 ND OL 2015 The Diamond Industry In This Lesson: • Your Industry • De Beers...

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The Diamond Industry The Diamond Course Diamond Council of America © 2015 ND OL 2015

The Diamond Industry In This Lesson: • Your Industry • De Beers • Diamond Suppliers • Trading and Cutting Centers • The Wholesale Sector • Diamond Retailers

YOUR INDUSTRY As a jewelry professional, you’re part of the global diamond industry. It’s an industry that links continents and cultures, art and science, timeless emotions and constant change. It also brings together the energy and creativity of countless individuals in order to provide beauty and enjoyment for countless more. Having a clear picture of the diamond industry is important for several reasons. To begin with, learning experts say the more you know about what you do, the better you can be at doing it. For a professional, this knowledge includes the structure and functioning of the industry as a whole, as well as all the details of your daily activities and store operations. In this information age, it’s also necessary to be able to explain your industry to people outside it. The Internet, television, and other media sometimes expose consumers to news and opinions that raise questions about how the diamond industry works. If these come up during a sales presentation, you need to be ready with confident and convincing answers.

You work in an industry that links continents and cultures, art and science, timeless emotions and constant change. The more you know about what you do, the better you can be at doing it. Photo courtesy The Estate Collection of TurgeonRaine Jewellers, Seattle.

Cover photo courtesy Cartier.

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The Diamond Industry

Most of all, a sense of the industry – and your firm’s unique position within it – can help you set yourself apart in a competitive marketplace. Customers today have many choices about where to make diamond purchases. To give them reasons to buy from you, it’s crucial to know and “sell” your store’s individual strengths. In this lesson, you’ll gain an overview of the diamond industry – your industry – from mine to marketplace. To do this you’ll follow the path most diamonds take from the time they leave the mine till they reach retail jewelry stores like yours.

Today’s consumers face a mind-boggling number of choices for diamond purchases.

Lesson Objectives When you have completed this lesson you will be able to: • Describe the flow of diamonds within the industry. • Explain how various industry sectors operate. • Answer customers’ questions about the diamond industry. • Highlight special appeal factors offered by your store.

You need to know and “sell” your store’s strengths.

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The Diamond Industry

DE BEERS The organization known as De Beers is a primary force in the modern diamond industry. It was born out of competition for South Africa’s diamonds in the late 1800s. From that beginning, De Beers rose to play a dominant role in producing diamonds, managing supply, and building demand worldwide. This role has evolved with changing times and conditions. Today De Beers and its activities touch every diamond professional and consumer in multiple ways.

Early Directions Around 1870, diamonds were found in South Africa. Within a decade, world production jumped 1000%. The increased supply eventually made diamonds available to more consumers. Its short-term effects were oversupply and falling prices. These conditions threatened to ruin the entire diamond industry.

In the midst of the crisis, Cecil Rhodes (18531902) came up with a plan to stabilize the market. He wanted to balance supply and demand, and believed that controlling supply was the way to do this.

Old Kimberley town.

Rhodes and his business partners started buying up diamond mines. They formed De Beers Consolidated Mines in 1888, and successfully battled competitors with similar ideas. By 1900 De Beers owned 90% of the world’s diamond production. After Rhodes’ death, De Beers went through a long period of uncertainty. This was due partly to economic and political factors (including World War I). New diamond sources were also being discovered. More than anything, the organization lacked strong leadership. Earnest Oppenheimer (1880-1957) became chairman of De Beers in 1929, and headed the company for the next 28 years. During that period, he increased De Beers’ holdings and improved its operations. He revised and expanded its guiding vision as well.

Kimberley Mine in 1875.

Old De Beers Mine. Photos courtesy Diamond Trading Company.

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Oppenheimer recognized that owning all diamond production was impossible. Instead, he focused on controlling the flow of diamonds to the market. In the 1930s, he formed an association that included every major diamond producer. He also established two companies – one to buy diamonds from association members and other sources, and the second to sell them. The association and two companies were later combined to form the Central Selling Organisation (CSO). The sales structure came to be known as single-channel marketing. With supply controls in place, Oppenheimer turned his attention to demand. Around 1940 De Beers began working with top advertising agencies to make diamonds part of modern courtship and romance. This was the beginning of the long-term promotional effort that created today’s consumer market for diamonds. The central theme became “A Diamond Is Forever.” This slogan first appeared in 1948 and it’s now one of the most widely recognized in the world.

Sir Ernest Oppenheimer shepherded De Beers for almost 30 years through stabilization, growth, and building consumer desire for diamonds.

Growth and Diversification Earnest Oppenheimer’s successors included his son and grandson. Harry Oppenheimer was chairman of De Beers from 1957-1984. Nicholas Oppenheimer held that position from 1997 to 2011. Under these and other capable leaders, De Beers has continued to grow and diversify. Today De Beers is the world’s largest diamond-producing entity. It owns most of South Africa’s diamond mines, and has one mine in Canada that’s currently being developed. It also owns and operates mines in partnership with the governments of Botswana and Namibia. Together these assets produce about 30% of all rough diamonds by weight, and around 35% by value. In addition, De Beers is exploring other prospects around the globe.

De Beers’ efforts to make diamonds an integral part of modern courtship and romance led to the theme “A Diamond Is Forever” which first appeared in 1948 and has been used ever since. Photo courtesy Diamond Promotion Service.

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In 2000, De Beers began to change its role in the marketplace. It closed the CSO and turned over all sales and marketing activities to another member of its corporate group – the Diamond Trading Company (DTC). The DTC stopped trying to control the supply of diamonds. Instead, it positioned itself as the “Supplier of Choice” in a worldwide distribution channel.

De Beers’ new role emphasizes building demand and ensuring consumer confidence. Beyond supplying diamonds, De Beers’ new role emphasizes building demand and ensuring consumer confidence. As part of this effort, one goal is to establish De Beers as a top brand name for diamonds. To accomplish this, De Beers partnered with Moet Hennessey Louis Vuitton (LVMH), the world’s biggest luxury goods group. Together, the two giants created De Beers LV, which produces and sells premium diamond jewelry in its own retail stores under the Forevermark brand. De Beers is active in other areas, too. It develops new diamond mining methods and works to improve the tools and techniques of cutting. It conducts its own research – and supports others’ efforts – to find solutions for problems like detecting treatments and identifying synthetics. De Beers is also a leader in dealing with the complex issues that face the diamond industry in the 21st century.

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RESPONDING TO ISSUES

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iamonds touch the lives of millions of people on this planet. They’re valuable natural resources, vital to the economies of many nations. They also have great symbolic meaning for consumers. As a result, diamonds sometimes become a focal point for bigger issues. In recent years, the issues have included conflict diamonds and civil war in Africa, plus labor conditions in Asia, international terrorism, and the environmental impact of developing new diamond discoveries. The diamond industry is a responsible sector of the global economy and human society. To date, the industry has responded to all these issues with integrity, energy, compassion, and creative thinking. Today’s society embodies a growing sense of international community and responsibility, so perceived links between diamonds and bigger issues are likely to increase in the years ahead. It is safe to expect that the industry’s response and sense of ethical commitment will rise to face all challenges. It’s important to recognize the far-reaching effects of your industry. You must stay alert for events that may raise concern among consumers. You also need to remain sensitive to customers’ expressions of these concerns. When new issues appear, work closely with your management to develop effective responses. Always be prepared to assure customers that your industry, your firm, and you are committed to the world in which we all live.

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The Diamond Industry

DIAMOND SUPPLIERS For most of the 20th century, De Beers had nearly total control of the world’s supply of rough diamonds. Since the mid-1990s, other companies have begun to market part or all of their own production. The development of this multi-channel supply was one factor that prompted De Beers’ to adopt its Supplier of Choice strategy. Today there are five leading suppliers of rough diamonds: • Diamond Trading Company – The DTC markets diamonds from mines owned partly or completely by De Beers. It also buys and sells diamonds from some of the other producers. The DTC is currently the top diamond producing company measured by value. • ALROSA (Almazy Rossi-Sakha) – Russia’s state-run diamond company. It markets rough diamonds mined in the Russian Federation. It is also part owner of the largest diamond mine in Angola. These resources make ALROSA the world’s leading diamond producing company by volume.

Rough diamonds from the Argyle Mine. Photo courtesy Rio Tinto Diamonds.

• Rio Tinto – This is a giant metals and minerals mining company, with operations in 40 countries. Rio Tinto owns and operates the Argyle mine in Australia, and has a 60% share of Canada’s Diavik mine. • Dominion Diamond – This company owns 80% of Canada’s Ekati mine, and is that mine’s operator. It also owns 40% of Diavik. • SODIAM – This company manages development, mining, and marketing of diamonds produced by the African nation of Angola. In recent decades, Angola has consistently ranked among the top 10 diamond producing nations. (The initials stand for the company’s name, which is in Portuguese Sociedade de Diamantes de Angola.) Added together, these companies in 2013 supplied about 70% of all rough diamonds by weight, and 75% by value. They also represent most of the world’s leading diamond producing countries. Diamonds from other producers reach the market in various ways. Often, they’re sold to international companies that deal in rough diamonds and act as middlemen. Diamonds from producer countries may also go directly to large cutting firms located in industry trade centers. (To review diamond sources, see the “Sources and Production” section of Lesson 10.)

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TRADING AND CUTTING CENTERS Through suppliers and other sources, rough diamonds reach trading and cutting centers around the world. The most important of these located are in Belgium, the United States, Israel, Russia, India, China, and the United Arab Emirates. • Belgium – The city of Antwerp has been a center of diamond trading and cutting since the 1400s. Today about 1,800 diamond-related firms have offices there, creating the largest concentration of companies in the industry. These include rough diamond producers and wholesale dealers, cutting firms, and polished diamond wholesalers. Altogether, the city’s diamond sector employs around 35,000 people (directly or indirectly). Antwerp’s cutters have the knowledge, skill, and experience to deal with large and very valuable rough. For this reason, many famous diamonds have been – and still are – cut in Experts estimate that 80% of rough diamonds Antwerp. Currently, about 80% of all rough diamonds and and 50% of polished diamonds pass through 50% of all polished diamonds pass through this industry Antwerp. center at some point in their journeys through market Photo courtesy JCK. channels. • United States – Diamond trading and cutting go on in a number of US cities, with New York as the center of most activity. Cutters have been working there since the 1800s, but the city’s cutting shops now employ only about 100 people. (More than 30,000 are engaged in other diamond-related businesses.) Most New York cutters specialize in large, high quality diamonds cut to high standards. With these, the labor cost of cutting is only a small part of the diamonds’ overall value. New York’s status also comes from being the major entry point and distribution center for the entire United States. About 40% of all the world’s diamonds, measured by value, flow through New York’s Diamond District in route to American consumers.

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New York’s status as a major diamond center comes from the types of diamonds cut there, the quality of the cutting, and the importance of the US consumer market that it serves. Photo courtesy JCK.

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• Israel – This country became a major cutting center in the 1950s, and was in the forefront of that enterprise until recently. Israel’s cutting firms now employ about 2,000 workers in some 700 factories. They produce many fine diamonds in larger weight categories – 2 carats and over. Israel also leads the world in development and use of new cutting technology. In recent years, it has become a major trading center as well.

The diamond industry in Israel employs about

• Russia – Russia’s cutting industry began in the 1960s. All 2,000 workers in 700 factories, and is a its factories were once owned by the government, and some world leader in cutting technology. still are. The country’s largest diamond cutting factory is in Smolensk, a city located southwest of Moscow. Russia is noted for quality cutting in popular weight categories. In the past, Russian cutters worked mainly with rough that was mined inside the country. Today they’re importing from other sources too.

• India – Cutting also started here in the 1960s. With low labor costs, Indian cutters at first worked on small, low-quality diamonds. The country gained world status by processing the huge output from Australia’s Argyle Mine, beginning in the 1980s. India is still a leader for small diamonds, and it’s processing larger, higher quality diamonds as well. Today India is the world’s largest cutting center, employing nearly 800,000 people in factories located mostly in Surat (a city on India’s west coast). According to statistics issued by its government and national trade organization, India cuts more than 50% of the world’s diamonds by value, about 80% by weight, and over 90% by volume (or number of individual diamonds). India boasts its position as the world’s largest diamond cutting center with more than 800,000 cutters. Many factories feature state of the art diamond cutting technology and some of the country’s best labor conditions. Photo courtesy JCK.

• China – In the 1980s, the Chinese government made an organized push to start a diamond cutting industry. Many companies soon failed, but those that survived are now growing fast. Cutting activity is centered in Guangdong and Shandong provinces, and in the city of Shanghai. Although China has some of the world’s most inexpensive labor, its workers are skilled and they’re being trained by experts from other countries. Leading firms from Belgium and Israel have transferred their polishing operations there. Due to this combination of favorable factors, China is now the world’s second largest diamond cutting center.

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• United Arab Emirates – Since 2004, the city of Dubai has taken a place among the world’s top diamond trading centers. Located on the eastern side of the Arabian Peninsula, Dubai is naturally situated to provide a link between producers in Africa and manufacturers in Asia, and also to serve as a business hub for the entire Middle East. The UAE government actively supports development of the diamond trade. As a result, Dubai now hosts the offices of more than 500 regional and international companies. These are focused mainly on trading rough and polished diamonds, but they’re expanding into other areas, including colored gemstones, cutting, jewelry manufacturing, and luxury retailing.

BENEFICIATION

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ost rough diamonds leave the country where they’re mined and travel to other countries to be cut, set in jewelry, and perhaps processed in other ways. The journey from mine to cutting factory, jewelry manufacturer, and elsewhere often circles the globe. At each stop along the way, value is added to the diamonds. This arrangement is efficient in overall economic terms. However, it means that the original producer country usually receives only a relatively small part of the total revenue which ultimately comes from its natural resources. In recent years, producing countries have started taking steps to increase their share of the benefits from their diamonds. This process is known as beneficiation (bena-FISHEE-ayshun). It most often involves established diamond industry firms from outside cooperating with national governments to create and maintain cutting factories. To fuel the enterprise, a certain percentage of the country’s production is usually set aside and made available specifically to factories located inside the country. Besides bringing in more income directly, beneficiation increases local employment in the diamond industry. Countries where this has already occurred include Angola, Botswana, Canada, Namibia, and South Africa. Beneficiation is likely to spread in years to come.

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The Diamond Industry

THE WHOLESALE SECTOR Diamonds can take various paths from trading and cutting centers to jewelry stores. In the past, these paths were long and winding. A diamond often changed hands many times before reaching the final retail outlet.

Market supply routes are Market supply routes are now becoming becoming straighter, straighter, shorter, and more direct. Wholesalers shorter, still trade diamonds among themselves. This enables them to meet any needs their clients may and more direct. have. Competition is forcing the whole industry toward greater economic efficiency. As a result, many of the traditional “middle men” are being cut out.

Despite this trend, the wholesale sector includes a number of components: • Diamond bourses and clubs – These function as the general wholesale markets for unset diamonds. They’re located in most trading and cutting centers worldwide, and in many national and regional business hubs as well. Members can do business in private offices, or at tables in a large room lit by northfacing windows. (North daylight is the traditional standard for judging color.) Some bourses deal in rough diamonds, some in polished diamonds, and some in both. Size, organization, and other details vary, but all bourses set and enforce high ethical standards for their members. From bourses, diamonds usually move into other parts of the wholesale sector.

Diamond bourses serve as places where cutters can meet to buy, sell or trade loose diamonds - some rough, some polished. All bourses set and enforce high ethical standards. Photo courtesy JCK.

• Jewelry manufacturers – This part of the sector includes many kinds of operations. The largest manufacturers produce complete lines of diamond and colored gemstone jewelry. Others have a narrow-

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er focus. They might make only bridal jewelry, for example. There are also firms built around the work of individual designers. Jewelry manufacturers add value to diamonds with artistry, workmanship, and materials. (You learned about this in Lesson 7.) Many also provide their customers with extra services such as credit arrangements, merchandise consignment, and marketing or promotional support. • Cutters - Cutting firms (often called diamond manufacturers) in different locations tend to specialize in certain types of diamonds. Factors affecting this specialization include wage costs, the skill of the labor pool, capital resources, market access, and availability of technology. At one end of the spectrum are small traditional “cottage” shops with one or two cutters. At the other end are ultra-modern factories that employ hundreds – even thousands – of workers. The equipment also varies tremendously. Some cutting firms use the very latest in computers, lasers, and automated polishing machines, while others rely on tools that haven’t changed much in the last hundred years.

Photo courtesy Kwiat Diamonds.

• Dealers and Wholesalers – These firms are the traditional connections between cutters and jewelry manufacturers on one hand, and retailers on the other. Some are large organizations, and some are single individuals. Many are bourse members, but many others are independent. Dealers may sell all kinds of gemstones set in jewelry, or only unset diamonds. (Those who specialize in diamonds are often called diamantaires.) This part of the wholesale sector is the one that’s most affected by current trends in market supply routes. With the distribution of diamonds changing from the source down, traditional supply channels for this sector are not as available as they were in the past – but it’s still an important source of “top-end” (larger, high color, high clarity) diamonds. Sources in this category are also where your store is likely to look when you need specific diamonds for your inventory, or to meet special requests by customers.

Dealers and wholesalers are most often the connection between cutters and retailers. Photo courtesy JCK.

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Jewelry manufacturers make the diamond jewelry that you sell in your store. Manufacturers vary tremendously in size and the nature of their product line.

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• Trade shows – Trade shows are where all segments of the industry come together. They combine business with networking, education, and recreation. The big national shows are held in cities such as Las Vegas and New York. In each location, hundreds of exhibitors set up booths to display their merchandise, cultivate customers, and take orders. Many regional or state organizations produce smaller shows for their members. Regional shows are great places to meet suppliers and colleagues, and to learn more about your profession. Whenever you have the chance, be sure to attend these trade events. There’s no better place to get the “Big Picture” of your industry.

Combining education, recreation, and networking with jewelry buying, trade shows are where all segments of the industry come together. Photo courtesy The SMART Jewelry Show.

• Internet trade sites – Many firms in the wholesale sector maintain websites to attract customers or communicate with them. Those known as business-to-business (B2B) networks have become the Internet equivalent of bourses. These sites are open only to professionals. The largest may have more than a millions diamonds and colored gems listed at any given time. Besides specifying the 4Cs for diamonds, some provide photo images and extra information. Additional features include directories, trade news, blogs, discussion groups, email, and links to other sites. Business-to-business (B2B) networks have become the cyberspace equivalent of bourses. Photo courtesy Crown Diamond Company.

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TRADE LABORATORIES

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rade laboratories provide our industry with expert technical services in the areas of product testing and grading. The Gemological Institute of America (GIA) opened the first gem testing lab in the US in the 1930s. In the 1950s, GIA began issuing diamond grading reports. These verified the 4Cs for retail jewelers and other professionals. Since then, the diamond industry has come to rely on grading reports – often called “certificates” or “certs.” The number of labs issuing reports has grown, and many consumers are now familiar with them. Grading is the primary diamond-related service, but labs can also identify treatments and mark diamonds with microscopic laser inscriptions. Some test colored gems and/or jewelry metals as well. Laboratory grading procedures are designed to maximize accuracy and consistency. In most labs, two or more trained graders examine the diamond independently. Then results are compared, discrepancies are reconciled, and the final report is issued.

Lab grading procedures are designed to maximize accuracy and consistency. Usually two or more graders must agree on the clarity and color grade.

Many fine quality diamonds weighing a carat or more are now sold with grading reports. A growing number of smaller diamonds are too. Diamonds with reports issued by labs considered reliable are often priced higher than comparable diamonds without reports, or with less reliable reports. In addition to the expense of the lab-reporting process, the added value reflects greater confidence in the grading and easier salability at both the wholesale and retail levels.

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The Diamond Industry

DIAMOND RETAILERS Retailing involves the sale of products to final consumers – the people who actually use the products – so a diamond’s journey within the industry usually ends with a retail sale of some kind. The US is by far the world’s largest retail market for diamonds. Other top diamond retailing countries or regions include China, Japan, India, Europe, and the Middle East. Experts estimate that American consumers currently purchase about 40% (by value) of all diamond jewelry sold each year at the retail level. In 2013, retail diamond jewelry sales in the US totaled around $32 billion. According to government statistics, there now are more than 140,000 stores in the US, where consumers can buy jewelry. For many of these, diamonds and diamond jewelry are key products, representing up to 50% – or more – of all sales.

The Fifth Avenue, New York storefront of Tiffany and Company - one of the most famous jewelry retailers in the world. Photo courtesy Tiffany & Co.

In broadest terms, American jewelry retailers can be divided into two categories – traditional and alternative. Alternative outlets include companies that do business only through the Internet, TV home shopping, mail order, or perhaps a combination of these. Traditional jewelry retailers represent a wide range of operations. They include privately owned stores known as independents as well as privately or publicly held chains of various sizes. Department stores and mass merchandisers fit in this category, too, along with auction houses, where some of the most rare and expensive diamonds are sold.

There are many thousands of stores in the US, where customers can go to buy diamond jewelry.

As a group, these options provide a perfect fit for every customer’s desires, budget, time, and personality. Some professionals are concerned that the Internet will seriously hurt traditional sales. Most analysts believe a jeweler’s true competition comes from other luxury products, not from other jewelry retailers.

Photo courtesy JCK.

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Many customers use the internet to learn about diamonds.

For some customers, alternative outlets provide convenience and a feeling of nopressure decision making. Many use the Internet to learn about diamonds and get a sense of the market. Savvy traditional retailers are responding to this by providing consumer information on their own websites.

Most American consumers continue to buy from “brick and mortar” retail jewelers because of the trust created during personal interaction with a trained sales professional.

When it comes time to actually purchase fine diamond jewelry, most Americans choose traditional outlets. Local retailers tend to know the tastes of customers in their market areas, and can mirror those tastes in their inventories. Offering services like repair and appraisal also helps to make the customer more comfortable in the traditional environment. Most important are the intangibles that create a truly satisfying purchase experience. These include that hard-to-define quality known as “ambience.” There’s also the kind of trust that comes only from personal interaction with a trained sales professional – like you. Ultimately, your success in selling diamonds and diamond jewelry depends largely on how well you understand your firm’s position in the retail marketplace, and how effectively you communicate what that means to your customers.

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INDUSTRY ORGANIZATIONS

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any professional organizations contribute to the diamond industry’s success. One of these is the Diamond Council of America (DCA), which developed this course. Others include: American Gem Society (AGS)

Jewelers Vigilance Committee (JVC)

American Society of Appraisers (ASA)

Jewelers’ Security Alliance (JSA)

Diamond Dealer’s Club (DDC)

Jewelry Information Center (JIC)

Diamond Manufacturer’s and Importers Association of America (DMIA)

Manufacturing Jewelers and Suppliers of America (MJSA)

Gemological Institute of America (GIA)

Platinum Guild International (PGI)

International Society of Appraisers (ISA)

World Diamond Council (WDC)

Jewelers Board of Trade (JBT)

World Federation of Diamond Bourses (WFDB)

Jewelers of America (JA)

World Gold Council (WGC)

The activities of these organizations are as diverse as the people and interests they serve. Some focus on specific market sectors or issues, others on education, trade services, or product categories. In one way or another they all support the industry’s growth, the prosperity of firms, the success of individual professionals, and the confidence consumers have in diamonds. The benefits you receive from industry organizations may not always be obvious, but they’re significant – like the safety that comes from JSA crime-prevention efforts. Other benefits, like this course, are more tangible. Then there are those you create for yourself. For example, you can build trust by telling customers that your firm’s membership in DCA represents a commitment to ethics, knowledge, skill, and service. Industry organizations are important to the work you do, so learn all you can about those to which your firm belongs. Most organizations maintain websites that explain their goals and programs. If you don’t know the Internet addresses, look for them by name using your favorite search engine.

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The Diamond Industry

RECAP OF KEY POINTS • Having a clear picture of the diamond industry can make you more effective as a jewelry professional. It enables you to answer customers’ questions, and helps you distinguish your firm in today’s competitive marketplace. • De Beers is a dominant force in the diamond industry. It’s the world’s largest diamond-producing company. The group’s sales and marketing functions are carried out by the Diamond Trading Company. • There are five main suppliers of rough diamonds. The DTC markets all of De Beers’ diamonds, and some from other producers. ALROSA controls distribution of diamonds from Russia. Rio Tinto owns and operates Australia’s Argyle mine, and has a share in Canada’s Diavik mine. Dominion Diamond owns the other percentage of Diavik. It also owns a majority of Canda’s Ekati mine, and operates the mine. SODIAM manages development, mining, and marketing of diamonds produced in Angola. • The most important diamond trading and cutting centers are located in Belgium, the US, Israel, Russia, India, China, and the United Arab Emirates. Belgium is the largest trading center. New York is the focus of activity in the US. Israel was in the forefront of cutting for 50 years, and is becoming a major trading center. Russia, India, and China are primarily cutting centers. India is the world’s largest cutting center, but China is growing rapidly. The UAE has become an important trading center since 2004. • Wholesale distribution of diamonds is becoming more direct as a result of competition. Key components of the wholesale sector are bourses, cutters, jewelry manufacturers, dealers, trade shows, and Internet business-to-business sites. • Diamond retailers can be divided into traditional and alternative groups. Alternative outlets, such as the Internet, attract some consumers, but most Americans still purchase diamonds and diamond jewelry from independent jewelers, retail chains, and department stores.

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The Diamond Course 13 D

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The Diamond Industry

LESSON 13 FOLLOW-UP CHECKLIST ____ With one or two of your coworkers, brainstorm a list of possible questions about the diamond industry. For example: What is De Beers and how does it operate? Where are diamonds cut? How does your store get its diamonds? Then work out and rehearse effective answers. ____ With your manager and coworkers, discuss any negative publicity or consumer comments about the diamond industry that you’ve encountered. Focus on how you can respond in a sales presentation without losing momentum or getting into a debate. ____ Visit the Diamond Council of America’s website at www.diamondcouncil.org. There you’ll find information about DCA’s mission, education programs, and other activities. Think about what DCA membership means to your store, your customers, and you. ____ Develop a list of good reasons why a customer should buy from your store or company instead of an Internet retailer or some other alternative outlet. If you have difficulty with this, ask your manager for suggestions. Practice presenting this information to a customer.

The Diamond Course 13 D

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The Diamond Industry

Lesson 13 Self-Test

T

his lesson also includes a Self-Test that’s designed to help you gauge your comprehension of the lesson material. The test is an important part of the learning process, so be sure to complete it.

When you’re ready to take the test, go to the Course Materials page (the one that lists all the lessons) and click on “Self-Test.” Make certain you select the test for this lesson. All questions in the test are based on Lesson 13. More than one answer for a question might seem correct, but you should select the one best answer based on the lesson discussion. As you take the test, you may refer to the lesson. To do this, you’ll need to have the lesson loaded in a separate window of your browser. If you feel certain about a question, try answering it without looking at the lesson. If you’re not sure, check the lesson before answering. After you answer a question, you’ll receive immediate results and feedback. You’ll find out whether you answered correctly, what the correct answer was (in case you missed it), and also the page number in the lesson where the information can be found. Take time to review any material you’re not completely clear on. At the end of the test, you’ll receive your overall results. Then you’ll be able to continue to the next step in your coursework. If you have questions or need help, please contact us. You can use this website – just click on “Help.” You can also email [email protected] or phone 615-385-5301 / toll free 877283-5669.

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