The Diamond Penny Begins to Drop

In the grand scheme of the diamond industry, a year doesn’t seem like such a long time – after all, it takes millions of years, and now, expert drilling techniques to help remove diamonds from their earthen beds. However, things at the consumer end of the diamond pipeline seem to be shifting, and in a positive direction at that.

Sometimes, imperceptible changes take place that help to change the way business is done, how a problem is approached or how a solution might be found. Sometimes, it’s hard to pinpoint the precise point at which something changes, when something clicks into place, when perhaps an opportunity appears that had not previously been presented.

I think back to the Presidents’ Meeting in June of last year. The formation of the Diamond Producers Association (DPA) had recently been announced, and at the time, two of the most important figures in the diamond industry – Andrey Zharkov and Philippe Mellier, of ALROSA and De Beers, respectively – were outlining their companies’ position on a number of issues relating to the entirety of the diamond pipeline.

One of the things that came out of it, and it was a clear impetus in the development of the DPA, was the need for better marketing, and the promotion of diamonds as a category, rather than just the promotion of brands. I don’t know if it is as a direct result of that, but some recent press releases have also revealed that mining companies are becoming more sensitive to the needs of consumers, particularly where a diamond’s story is involved.

Rio Tinto announced two initiatives this week that are geared to this end. The company has introduced a diamond sourcing program, aimed at providing an audited mine-to-polished chain of custody for stones from its Argyle mine in the far northeast of Western Australia. (It will start a similar program to cover its 60-percent share of production from the Diavik Mine in Canada’s Northwest Territories).

This is all being done in the name of transparency, which is also the impetus behind the company’s launch of its Australian Diamonds program in China. Provenance is important, the unique story behind a diamond is important. The company would say that where the stone comes from also helps to inspire and inform the emerging Chinese diamond fashion jewelry market, from designers, through to retailers and finally, consumers. If we allow people a behind-the-scenes look at our industry, we allow them to make informed choices about our products, and they are a conduit for broadcasting our messages to others too.

And just today, De Beers’ new CEO Bruce Cleaver spoke of the necessity of consumer confidence in his opening address at the latest edition of the International India Jewelry Show (IIJS). “Consumer confidence is non-negotiable if we wish to succeed,” said Cleaver. “Consumers are increasingly looking for more assurances about their diamond’s journey, so the more we can do to provide confidence, the better it will be for our long-term prospects.”

We don’t know yet whether the emphasis on consumer confidence will in fact, stimulate greater demand. There are other factors at play of course, and some of them beyond the control of the diamond industry, but acknowledging the role of the consumer and taking action to encourage confidence are welcome developments.