Diamonds

In 2005, the world's production of diamonds was estimated to be a total of 160 million carats with an estimated rough diamond value of US $13.4 billion. (DiaMine Explorations, Inc.) The world's leading producers of rough stones by value were Botswana, Russia, South Africa, Canada, Angola, and Congo.

Nothing compares to a diamond because of its hardness, rarity, and optical qualities. But rough diamonds must be converted sorted and classified before reaching the world markets.

At the mines, diamonds are roughly sorted into size groups: more than one carat or gem-quality, smalls or near gem-quality (between 1 carat and 0.1 carat), and sand or industrial grade diamonds (less than 0.1 carat). Marketing of these stones is largely handled by the De Beers Consolidated Mines, Inc. through its subsidiary Central Selling Organization (CSO). The CSO was established in 1934 by Sir Ernest Oppenheimer to stabilize market prices in periods of low demand and raise prices during good times caused by inflation and demand. The CSO maintains an international system of one-channel marketing; thus it more or less establishes the price of rough diamonds on the world markets.

Rough stones must be polished to be of value as gem stones. One estimate by the New Western Territories Diamond Projects Division stated that rough diamonds worth US $7.9 billion, are worth US $13.4 billion after sorting, polishing and manufacturing. When converted into retail products, these same diamonds become worth a staggering US $56 billion.

However, not all diamonds are used as gem stones. Rough diamonds of much smaller size (both natural and synthetic) and inferior color, clarity, or shape are frequently converted into industrial diamonds for use in drilling, cutting, grinding, and polishing. Both natural and synthetic diamonds are widely used in automobiles, technology, and aerospace. In many of the applications mention previously, synthetic diamonds are preferred because there is a greater variation in price, size, shape, etc.

Diamonds conduct heat faster than any other material making them ideal for applications in technology where overheating could cause problems. Also, since electromagnetic waves easily pass through diamonds, diamonds are used as 'windows' to allow radar, heat, etc. signals to reach a sensor without interference.

The demand for rough diamonds is expected to increase to US $23 billion by the year 2015. Prices will increase by up to a third during the same time period. Mines in South Africa and Russia being mined out, and therefore phased out. New mines such as those from Canada not fully online (estimated time for full production is 2009). Increasing demands from new markets, such as China and other Asiatic countries, and established markets, such as the United States and Europe, make the demand for diamonds high and a good investment for those who are able to do so.