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Diamonds as an investment – you should know that

In the pandemic, diamonds were no longer in great demand – that’s changing again. Diamonds are also becoming increasingly popular as an investment. What they didn’t know about the clunkers.

Cologne. Diamonds stand for durability and are considered to be the hardest material in the world. Nevertheless, the corona pandemic has severely damaged the global diamond market. In 2020, the output of rough diamonds fell from 138 million carats in the previous year to 107 million carats.

In addition, diamond purchases fell by 15 percent, according to the annual industry report “The Global Diamond Industry 2020-21” by the international management consultancy Bain & Company. But now the clunkers are starting to sparkle again …

Diamond market is recovering

If prices fell significantly at the beginning of the pandemic (minus eleven percentage points for rough diamonds and three percentage points for stones that have already been cut), the market is currently recovering rapidly. The sales figures rose again by the end of 2020, especially in China and the USA – by ten to 20 percent.

Marie-Therese Marek from Bain & Company

Marie-Therese Marek is a luxury market expert and is familiar with the diamond market.

Expert Marie-Therese Marek, Associate Partner at Bain & Company, explains: “The resilience of the diamond market is amazing. In fact, many customers who were able to travel and shop less because of the global lockdown restrictions, not least spent more money on the precious stones. “And further:” The fascination of diamonds seems unbroken. “

But what is it that fascinates people so much about diamonds? And why are they so expensive and valuable? We feel the precious stones on the tooth …

Diamonds as an investment

Diamonds are traded on diamond exchanges. There are 30 of them worldwide. Around 80 percent of all rough diamonds end up in Antwerp (Belgium). In the local diamond quarter, the valuable stones are traded, but they are also processed and further processed here. Diamonds worth 200 million euros pass through the quarter every day.

A Christie's employee is holding a 100.94 carat D-colored rectangular diamond.  The diamond is valued at $ 12,000,000-18,000,000.

Particularly large, high-quality diamonds are good investments. This 100.94 carat diamond is z. B. Estimated at $ 12,000,000 – $ 18,000,000.

Thanks to their high value, the gemstones are also suitable as an investment. But: Have you ever heard of someone who consciously invests in diamonds? Investing in gold is more common. However, diamonds as an investment are much safer, say the experts at BNT Diamonds, who specialize in investing in diamonds.

Diamond price remains largely stable

Especially because the gold price depends on many factors – the market interest rate, the US dollar price, the inflation rate, the international political situation and supply and demand – diamonds are much more crisis-proof than gold. “There is always great interest in diamonds somewhere in the world,” say the experts.

In addition, the value of diamonds is very stable and always recovers quickly. The value fluctuates a little occasionally, but has risen continuously over the years. The price depends on many factors, including the four Cs – carats, i.e. the weight of the stone, color, clarity (clarity, i.e. whether the stone is contaminated or damaged) and the cut or cut. the quality of the cut. Therefore, unlike gold, the price per carat cannot be given across the board.

Diamond mining: yield does not stay in the country

Diamonds are made of carbon that is arranged in a cube-shaped framework structure. They originated in the Precambrian – half a billion years ago. In the truest sense of the word, they are “stone old”. In the interior of the earth, the carbon atoms formed into these crystal lattices through pressure and heat. Volcanic eruptions bring rough diamonds closer to the surface of the earth.

They are particularly common in Russia, Africa (especially South Africa, Namibia, Angola, Botswana, the Congo and Sierra Leone), Australia, Canada and Brazil, where they are laboriously mined or mined (see photo). Most of the income does not stay in the mining areas, however, but goes to the large diamond producers such as. the De Beers Group, Alrosa or the Rio Tinto Group.

The Jwaneng diamond mine in Botswana photographed from space.

Diamond mines are gigantic, as this picture of the Jwaneng Mine in Botswana shows from space.

Diamonds are mostly mined in chimneys of long-extinct volcanoes – both in open-cast mining and underground. The mines are so huge that you can even see them from space, like the photo of the Jwaneng mine in Botswana on a picture from the US space agency NASA. Also in rivers, the so-called Diamond Rivers, such as Diamonds can be found in e.g. Sierra Leone, Namibia and South Africa.

Blood diamonds

Blood diamonds (or conflict stones) are illegally mined and bought on in order to use the proceeds to support violent conflicts and rebel groups. The Kimberley Agreement was concluded in 2003 to prevent trade. It stipulates that diamonds must have a state certificate of origin.

Leonardo DiCaprio and Djimon Hounsou run down a devastated street.

The film “Blood Diamond” with Leonardo DiCaprio (left) and Djimon Hounsou brought the diamond industry into disrepute.

Hook: The agreement is not binding, it is still possible to sell diamonds that have been mined in circumstances that violate human rights.

In the EU, however, a legally binding regulation on proof of origin has been in force since the end of 2002. Diamonds of unknown origin are a popular means of payment in the illegal arms market. The subject of blood diamonds was also dealt with in the Hollywood drama “Blood Diamond” (with Leonardo DiCaprio, photo). Thanks to the film, the topic moved more into the focus of the public in 2006.

Diamonds are forever

A diamond as an engagement ring is already a standard for many, after all, the sparkling stones stand for love and durability.

A man holds a ring box with a diamond ring in his hand.

Diamond rings are particularly popular for engagement.

We have the De Beers mining company to thank for the fact that diamond rings are so popular for engagement. In the 1930s she started an advertising campaign that associated diamonds with love and happiness. As a result, diamond rings are seen as the ultimate token of love, with sales increasing by 50 percent within three years after the campaign.

The phrase “A diamond is forever” also comes from the clever diamond company based in London. It can be traced back to an advertising campaign from 1947 that boosted diamond sales again. This trend has continued to this day.

Diamonds: special cut & colors

Because of its high refraction and its luster, a diamond is a popular gemstone. In order for it to sparkle so nicely, it has to be ground into shape. The rose cut was particularly popular up to the beginning of the 20th century (flat at the bottom, curved at the top with facets).

A red diamond

Fancy diamonds like this red diamond are particularly rare.

In 1910 the brilliant cut that is common today was developed. The most common are white diamonds. Fancy diamonds, which are colored by elements such as nitrogen or boron, are particularly expensive. They come in seven tones (canary yellow, brown, blue, green, red, pink, pink and orange).

The color increases the price enormously: Pink-colored diamonds cost z. B. 50 times more than white. Out of 100,000 diamonds found, there is only one fancy diamond. Red diamonds (photo above) are the rarest diamonds.

Synthetic-made diamonds

In 1953 the Swedish physicist Erik Lundblad succeeded in synthetically producing a diamond. Graphite is pressed in a hydraulic press at 60,000 bar at a temperature of 1,500 degrees Celsius. This is how the carbon of the graphite becomes a diamond.

It is now even possible to have the ashes of a deceased pressed into a diamond. Diamond burials are not allowed in Germany due to the cemetery obligation, but in many neighboring countries they are.

The costs start at around 4000 euros, but only a small part of the ashes are required, so that additional costs for the urn burial are incurred. But it is also possible in Germany to have the ashes of personal things such as love letters or the like pressed into a diamond – costs: from 1450 euros.

Diamonds as a tool

Base diamond is also used as a tool, e.g. B. for drills, milling tools or abrasives. Thanks to its properties, it is z. B. possible to cut glass with it.

Gigantic giant diamond

In June, a giant diamond weighing 1,174.76 carats was found in the Karowe mine in Botswana (photo). It is currently the third largest diamond in the world.

A giant diamond with 1174.76 carats lies with the mine operator Lucara Diamond Corp.

This giant diamond of 1,174.76 carats was found in Botswana in June 2021.

The largest was the Cullinan diamond, which was discovered in South Africa in 1905 and weighed 3106.75 carats in its raw state. In 1908 the Cullinan was split into 105 stones, nine large and 96 small parts. The nine large diamonds are now part of the British Crown Jewels.

Weird facts about the expensive stones

If one took all the diamonds ever found and cut, they would fill a London double-decker bus – with space for the driver. Diamonds are older than many stars in the sky. The oldest diamond is 3.5 billion years old, the youngest 720 million years. The melting point of a diamond is 3548 degrees Celsius. Nature will not give us any more diamonds. The geological conditions have changed and the volcanic activity that brought the diamonds to the surface has subsided. Most diamonds were formed at a depth of 125 to 200 kilometers below the earth’s surface.

Sonia Gupta
Soniya Gupta, who joined the Technical University in October 2015, continues his education life at Technical University. As the passion for aviation increases day by day, it has a great interest in technology and gaming.


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