Diamond Market

The diamond market is dominated by a diamond mining and trading company called De Beers Group. The company is based in Johannesburg and in London. De Beers has a strong influence on the diamond market as it holds a market share of 65%, followed by the Russion conglomerate Alrosa.

De Beers was founded by Cecil Rhodes in 1888 and later bought by Ernest Oppenheimer who was mainly responsible for the success of the company.

All sorted diamonds are sent to the Central Selling Organisation (CSO) in London. There the diamonds are assorted to lots (”selling mixtures”) and sold at fixed prices. But not everyone can buy these lots. There are currently 160 accredited diamond cutters, diamond polishers and diamond traders - so-called sightholders - who can buy diamonds. The CSO sells only rough diamonds.

Then these diamond lots are distributed and sold to direct buyers on diamond stock exchanges. There are diamond stock exchanges in Antwerp, Amsterdam, New York, Ramat Gan in Israel, Johannesburg, London, Milan, Paris, Vienna and Idar-Oberstein in Germany. The most important stock exchanges are the four ones in Antwerp. Diamond stock exchanges are not “normal” stock exchanges, but rather diamond wholesale markets.

The De Beers sales system controls and influences also the retail prices. The main aim is to keep the value of diamonds stable and to stop illegal activities. The cooperation of all diamond producing countries under the organizational leadership of De Beers helps the interests of all involved parties, such as diamond producers and buyers, to counter extreme price fluctuations.

There are certain problems for a stable market situation caused by countries, such as Angola, Zaire and Russia, because there the diamond production and trade isn’t controlled properly. These diamonds can influence the diamond market prices in an incalculable way.