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vWhen the media spotlight
ell on the recent war
crimes trial o Liberias
ormer president Charles
Taylor it illuminated
ethical concerns over theorigin o diamonds. Has it
made their sparkle much
less attractive?
By Richard Willsher
Blood, conict, war, hot
or converted diamonds are
those used to nance war
and conict. Angola, Ivory Coast,
The Democratic Republic of Congo
(formerly Zaire), The Republic of Congo
(Congo Brazzaville), Sierra Leone and
Zimbabwe are all countries that have
been reported to be sources of such
stones. Until 2003 when the Kimberley
Process Certication Scheme (KPCS)
was introduced under United Nations
General Resolution 55/56, there was
no system to assure buyers of rough
diamonds that they did not originate
from war zones.
The KPCS set out a series of warranties
for consignments of stones and
established principles by which the
diamond industry was to regulate
itself. These include, among others,
only trading with counterparties that
provide KPCS declarations on their
paperwork; not buying diamonds from
suspect sources and not assisting in
buying or selling diamonds from such
sources. But while the KPCS has been
largely successful, with the exception of
two Canadian brands, Polar Bear and
CanadaMark, which carry a minute laser
engraved serial number, the origins of
diamonds cannot be proved.
What of those which came to market
before 2003? And how ethical do
we want to be? People who dig for
precious stones, gold and many other
commodities, including oil are often
in remote, lawless regions of the
Diamonds are
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Until 2003 there
was no system to
assUre bUyers of
roUgh diamonds
that they did not
originate from
war zones
returns. A visit to www.ajediam.com is essential
however to grasp the detail and very strict
denitions of the diamonds which fall within
their price trend graph.
Four Cs
Buying cut diamonds boils downs to four Cs.
The cut or quality of craftsmanship used to
shape the stone. The colour. White diamonds
are most common but as Jason-Paul Hirsh
of London jewellers Hirsh points out, other
natural colours such as pink, blue and yellow
are rarer and can be extremely valuable.
Clarity is the third C and refers to whether
there are blemishes within the stone. Fourth is
carat, the weight of the stone. One carat equals
0.2 grammes. While it is generally true that
the bigger the stone the higher the price, there
are certain key price points. A one-carat stoneis likely to cost signicantly more than one
weighing fractionally less than one-carat.
Hirsh goes on to say that diamonds are
not like any other commodity; the market
has characteristics that do not commend it
for investment. There is a massive stock
of diamonds that is not being released. In
other words it is being held to keep the
price inated. The control of the market is
largely in the hands of the Diamond Trading
Corporation, formerly De Beers, which has
agreements in place with producer countries
such as Russia, Canada and Australia. The
second reason is that diamonds have been
articially made since the 1960s and the
manufacturers are getting better at it. This
will also have an effect on the market that no
one can really predict. He adds however, that
those rarer pink and other natural coloured
diamonds can produce good investment
returns as supply cannot meet demand.
The investor still needs to square his or her
ethical concerns. A jeweller with a specialist,
ethical approach is Ingle & Rhode, based
in Londons West End. This firm uses fair
trade gold and buys its diamonds direct from
producers rather than through wholesalers.
David Rhode points out that the greatest
investment returns are likely to come from
diamonds that form part of highly collectable
pieces of jewellery. Such pieces might be
from a well-known designer such as Cartier
and may have been owned by celebrities in
the past. Such jewellery fetches high prices
at auction.
Investing in diamonds is highly subjective and
requires a lot of background knowledge and
good advice. Diamonds do not pay interest
and need to be securely stored and insured,
both of which cost money. But they can be
passed from generation to generation and
they are also easily transported. This explains
why refugees have often taken their stones
and jewellery with them and left their more
cumbersome possessions behind. Diamonds
have many appealing features and are an
asset class that many treasure, despite
the uncertainty of their origin and of the
investment returns they may produce.
world. If human rights, health and safety, the
environment and local political regimes are
issues we care about, then we would need to
examine our conscience before engaging with
any of these substances, that are woven into the
fabric of most lifestyles across the globe.
Investment
Diamonds remain objects of desire and perhaps
also worthwhile investments. As Michael
Wainwright one of the latest generation of
the family that owns Boodles, the 200 year-
old London based jeweller puts it, Items of
diamond set jewellery are beautiful things to
own and wear and may turn out to be not a bad
investment. He adds that no rate of return can
be placed upon such investments though the
better the colour and the quality the better they
fare. That is consistent with other collectable
investments such as art, wine and furniture.
There is evidence, published by Antwerp
diamond dealers Ajediam that over a period of
50 years the price of wholesale diamonds has
consistently risen and produced quite reasonable
Right: Signature Raindance
ring - this has gone into the V&A
permanent jewellery collection
as an example o leading British
contemporary jewellery design.
Below: Raindance celebratorycollection (to celebrate 10 years
o Raindance) coloured bracelet
(aquamarines, star sapphires, mint
green tourmalines and diamonds).
Both created by Boodles.
An extremely rare 14.23-carat ancy intense pinkdiamond (pictured) is to be auctioned at Christies in Hong
Kong on 29 November 2010.
With a pre-sale estimate o $14-$19 million, the aptly-
named Perect Pink is said to be a paragon o
perection in terms o colour, clarity and cut.
Fancy intense pink diamonds are both naturally and
commercially very rare. Only 18 diamonds over 10 carats
showing a distinct pure pink colour have ever appeared
or sale at auction.
O these, all exhibited a lighter shade and saturation than the
intense pink seen in the Perect Pink, according to Christies.
Gem connoisseurs have long considered pink diamonds
to be among the most beautiul o gemstones since they
were frst discovered in the ancient mines o India.
Fewer than 10% o pink diamonds weigh more than 0.20
carats. Larger varieties rarely come up or auction. According
to Christies, large polished pink diamonds o this description
are virtually unheard o.
While most pink diamonds exhibit a colour modifer such
as purple, orange or grey, the Perect Pink is said to show
absolutely no trace o a secondary colour.
In addition, says Christies, the classic rectangular shape a
cut generally reserved or white diamonds suggests no
additional acets were required to intensiy its tone.
At the end o 2009, Christies Hong Kong set a world auction
record when it sold a cushion-cut ancy vivid pink fve-carat
diamond or $10.7 million around $2.15 million per carat.
It became both the highest per-carat price ever paid or any
diamond or gemstone as well as the highest price paid or apink diamond.
The Perect Pink will be on view in Geneva, Taipei and Hong
Kong prior to the sale.
Pc Pk avc Pv
Geneva: 14-16 November, Four Seasons, Hotel des
Bergues. Taipei: 20-21 November, Fubon Lie Assurance
Building. Hong Kong: 25-29 November, Hong Kong
Convention & Exhibition Centre
For more inormation, visit www.christies.com
market 29the28 marketthe
Rare pink diamondexpected to attractrecord price at ChristiesBy Michele Martensen