a bite, b, r a by oh, why are diamonds so expensive and considered so valuable? diamonds are not particularly rare and compared to other color gemstone, they're the most common precious stones to be found. but if that's the case, why is the price of diamonds and other precious gems rising at such an astronomical rate? precious gems have increased in value by 5 to 8 per cent every single year since 1995. i'm christiane, you're watching the cost of everything. we're today. we're going to bring some clarity to the often misunderstood diamonds and colored gems. market ah,

diamonds have been coveted and admired for thousands of years for their beauty. they were formed billions of years ago and are so rare because so few are able to survive the difficult journey from the pits of the earth to reach the earth's surface. from the diamonds that are being mind to day, only about 20 per cent are high enough quality to be sold on the diamond market as jewelry. but while diamonds are rare, they aren't as rare. as you think. throughout the 19th century de beers maintained a monopoly on the global diamonds mines. the cartel with stock pol diamonds limit supply and drive up demand and costs, and it would only release enough diamonds to meet annual demand, giving the market the illusion that diamonds were exceedingly rare. but why is the diamond so expensive? perhaps it has to do with the amount of work it takes to mind. a diamond diamond

mining operates some of the most resource intensive activities. consuming large amounts of water and energy. you 1st have to mind the diamond and extract it from its or about a 133000000. carrots of rough diamonds are produced each year with botswana and russia being the largest producers between them may have half the world's production. and for diamond producers control about 65 percent of the market. to be years, the russian producer are rosa and diversified mining companies, b. h. p, and rio tinto. large commercially viable diamond mines are a rarity. and today, there are only about 20 major diamond mines in the world, and only 11 of them make up 62 percent of the world's production by carrot and no matter how big the mine is, you have to move a lot of rock to get a very small number of diamonds and even the riches mine,

one ton of rock contains only about 1.4 carrots of rough diamonds. now that's less than point 3 grams. on average a producer cells rough diamonds for a $134.00, a carrot, giving it a profit margin of 20 to 24 percent. the minor then has to sort and sell them as to regrade diamond or industrial grade diamonds. cutters and polishes are next to by rough diamonds from the producers, and cut them appropriately and polish them to release their true potential. the majority of cutting and polishing is now done in india, followed by china because of low labor costs. jewelry manufacturers then by the polish stones, usually add exhibitions, create the piece, sets of stones, and give them 2 retailers to sell finished jewelry to customers. manufacturers and retailers, depending on the prestige of the brand, can enjoy a premium profit margin of up to 40 percent. but now,

man main diamonds are growing in popularity to the average person. these gems are indistinguishable from traditionally mind diamonds. and these live grown diamonds or l g 's are less expensive and considered an environmentally friendly alternative to mining. they take weeks to create and plaza reactors and have been recognized as quote, diamonds by the u. s. federal trade commission since 2018. so one more or less bring in eating goal and diamond industry analyst at diamond research and data. so how have the attitudes towards lab created, diamond or l g d 's shifted in recent years. it seems to be gaining traction with the market expected to double by $6000000000.00 by 2025. interesting question. so labrons have been around for a good number of years and have entered the retail market

place as components in jewelry around 2000, the 16 by 2018. they were really already a thing. and at that point, they were looked at the old diamonds that is natural, diamonds and lab programs. together. lab going to the time are presented about 2 percent of the business to one point a to, to point to the any really how you measure. we know that that figure has increased, then it doubled almost every year and it currently stands at around 10 percent. so in terms of value, there's definitely a doubling almost every year. i don't know if we'll reach 6000000000, but there's no doubt that this is a, an item of growing interest in the consumer market. and,

and we're seeing it growing rapidly at this point. while allergies are trying to position themselves as more ethical compare with the traditional history of dining mining? are they really when it takes so much energy to produce them and most of them are made in china? well, there isn't one answer to this question. in other words, since it's an industry, some companies are ethical in the sense of um, labor conditions and impact on the environment, etc. on that cannot be said for old companies, there are a number of companies going out in china that have some facing a lot of criticism. some of it has to do with their energy use and energy use. that is not a clean. there is

a lot of criticism about working conditions in some of these places. so in general, i think rule need to, to break this down. first has to do with, is it ethical in the sense that it is environmentally friendly and the other is unethical? in terms of it is harming anyone in most cases and we see that both the ethical side and the environmental side kind of go hand in hand and, and compared to to the majority of natural. and if you look at natural diamonds and mining, very human conditions are by and large, fantastic workers are unionized in the largest companies. all of the large companies are, are public companies. so they're facing serious scrutiny. if they do not meet

standards, they are reporting on their own ethical and environmental impacts. and those are audited so, so. so in that regard, i wouldn't say vance lab grown diamonds are by definition more difficult than natural. and the elegy, the industry claims that its objective is to democratize the diamond industries so that it is more affordable to all. but by doing that, isn't it inherently killing off the diamond industry and taking away the layer of what makes diamonds so valuable and coveted? so the issue of value was an interesting one. so 1st of all, the issue of let's start with the market. i think diamond's mother dies and guys really. ready with the beers in the 940 a very accurately and this that in the. ready post. ready war

2 era, we're looking primarily the united states, enjoying the. ready boom, and the growth in the middle class, and that's where that is wherever the slogan and marketing campaign really supp until that point diamonds were really something that you saw primarily available to very rich royalties to hollywood stars. but the average joe. ready didn't have an opportunity of you or the financial ability to buy them forever. was campaign to say, look, let's make sure that everybody has an opportunity and a desire to buy a diamond. so there we go. what we're seeing is really that the market, the democratization of diamonds began 80 years ago.

so that's the one. and the other hand. ready so there's the issue of what is the value today? and there is a debate. so one of the tenants of a luxury item is that it's not available to everybody. and, and it is pricey. so it's the economic aspect of it will make it less available as well as them mouth and quantity of the market. and in that regard, if, if we see diamonds being sold for $200.00, you know, everybody can afford them. it right is wrong. i mean, it's a social which and i think everybody should have access to something. they see that a is beautiful and b makes him feel good. i think the biggest value a diamond ring, for example, is how does it make you feel? does it make you feel when you're gifted? good and, and that you made somebody happy?

if you're the person being gifted, does it remain a strong and positive memory that make you happy? the answers are yes. if you look at a diamond, you'd say, wow, i'm so happy i have it. if you have a great item in it and that makes it valuable. and at the end of the day, i think that's the most important thing. there's no doubt that the fact that an item will, will have a sort of a bifurcation diamonds in the diamonds. we will have diamonds that are high price and as such luxury items. and we expect to see that primarily happening with natural diamonds of other how we're going to have something that is mass produced easily accessible. the cost of manufacturing is and growing in will reduce over time, making it more and more accessible. and as such, i don't expect it to be a luxury item, as much as it will be

a fashion item available to everybody. thank you so much eating, go on by your insights. and when we come back, we'll discuss the real environmental casa gen. what is the price countries are willing to pay to get a hold and don't go away for ah ah.

with joggers archipelago told me that you go san diego garcia, the largest island in the archipelago, is now the location of a very large u. s. military base, you get government, give out a u. s. government to make a military base and just reported all of douglas and people from their country. so they call it return back on the island. no, but we are fighting. that's why i'm real fighting for the right. so i. c we do not consider the right to self determination actually applies to the jo. since i don't the question of self determination, the legal advice we have received is actually the chic options. we're not at all,

not a people for me, it's time to move on and see what we can do. a full tumbler said community to return back home knowledge support from the united nation high commission advocate, united michelle. don't care about checklists and people the welcome back. it's not does diamonds that fascinate us color. gemstones have had a resurgence of interest in recent years. for example, the duchess of cambridge is sapphire engagement rang megan marshall's aqua marine lang. and princess eugene coral pep, russia, and mor, this has led the sector towards a double digit growth with record prices for emeralds and rubies that surpassed the price of diamonds on a per carrot and basis. but all that growth comes with a price, which is unfortunately the environment. pounds in world south africa like niggers, fontaine were destroyed when the damn bill to hold back. the waste from mining

crumbled, sending gray slush throughout the community. the waste from mining, known as tailings, is becoming a major problem as poor committee are saddled with toxic waste. once all the gems are extracted, a similar dam collapsed in brazil years ago, killing more than 250 people. unfortunately, these mines are often in rural areas where operators lack the resources and expertise to manage tailing dams, and often skim in order to save on operational costs. money also involves building tunnels and pits which opens room for soil erosion lose. sediments will continue accumulating in the nearby bodies of waters and the land itself will become unfit for agricultural purposes, further promoting deforestation. so now knowing the true costs of these gems, is it still worth it? let's bring in eating gall and diamond industry analyst at diamond research and data for more. so even people today are increasingly looking to precious metals and

colored gemstones as safe assets. what do you make of that, and how do these precious gems such as sapphires, rubies, and emeralds compared to a diamond as an investment asset? so invest where there's a, there's a big debate about diamonds are a investment worth the item. and, and here to we're seeing that we're looking at a not let me restate that. what game is we're saying that not old diamonds are investments where the diamonds and there are some that are very much so. so diamonds that have the top top color, top clarity, perfect, polishing, and in sizes that are very rare. so 5 carrots and above the flow liz,

what is called the triple excellent. 5, cara diamond is rear and the and as they get bigger and remain those other characteristics and they become more and more less available on the market. and as such, where we see that usually at times of crisis, their prices tend to rise. and, and we're looking about a time of crisis. we're talking, you know, 9 live in 2008 is covered in damage. and those kind of times we see that usually many elements, many economic elements are declining. so the stock market price of gold sometimes usually goes out, but sometimes goes down real estate, which is an important investment. tends to buy for real estate tend to decline at those times when people usually do as they turn to jewelry for

a whole list of reasons psychological, primarily and, and emotional. and what we see of those times is because there's a rise in demand. and usually those sort of times difficult to mine, which was clearly the case during cove. it prices tend to rise. so as such, some diamonds are no doubt a hedge. so in that regard, they are a good investment for the long term, especially not just the damage scribe, but those with unique colors, unusual colors of pinks, red blues are in great demand and they're rarity. makes them especially expensive. and so for example, the are, the minute really of it shut down about 2 years ago was the main source of being diamonds. without that mine, there's going to be

a lot less being diamonds coming into the market, so their prices are appreciating. that's the natural trend in terms of rubies and satisfies we are seeing those kind of trends with semi precious gems as well, although not the same extent. so there are some sapphires in emerald and rubies that are appreciating and value. but this is primarily when they are attached to an interesting piece of jewelry. so necklaces, crowns earrings that have a story behind them. so providence does a lot to, to increase their value over time. and those are interesting investments. if you're talking about investments in terms of, you know, if they go out to the store, my local specialty jewelry and i buy one carrot ring with, with

a typical color clarity combination. their prices do increase over time, but it's not a real investment opportunity. the whole retail model is based on the idea that i buy wholesale. i mark up for goods a little bit and then sell them very when you want to turn back to the store and say, look, you know, i buy this from you for so many dollars in the past 23510 years ago. and now i want to see, you know, this return on investment in our retailer won't buy it back at a retail price. so buy back in a hostile price because, you know, that's the basis of the retail business. i buy also make some retail so so at times people can feel that they did not see the full appreciation. but mainly it has to do with the fact that they bought within a model that does not encourage to create those kind of transactions.

it seems like several, the top tier mines have already been depleted minds in me and more that contain the infamous pigeon lead, rubies or cashmere sapphires, or the gal condom minds for diamonds have been long depleted. so do you see other semi precious stones like opals or awkward marines joining the ranks of the traditional sapphire rubies and emeralds? will it's a tricky question. so let's start with with you know, what, what is available will be available. one of the answers to the question of availability is technology right? with you could be impossible to reach the past, all of a sudden becoming became available. when technology change, when exploration technologies improves when conditions have improved. look at a lot of the diamond minds around the world today they're underground. and you know, i've been to a diamond mine in the started as an open it, which is

a typical my. and it went more than 600 meters underground. now, this is technology that didn't exist, you know, many years ago. and today you know, your mining diamond at keno kilometer below sea level. so, so it's, it's really a matter of technology. i had a conversation with the ceo of the beers with, with clever who said, look, we're already seeing changes in technology that will allow us to find diamonds of places. that in the past we thought that they're not there. or in the past we felt they are a possible resource. but just because of the costing complexity of mining, it is resources whenever. busy developed and that we're able to develop them and really see that the new clause working on of us get there and,

and be able to extract these gems economically. so this and this is true for all gen, this is not true just for diamonds just with ruby, 2 for sapphires, emerald, etc. so that's the answer. the 1st part of the question, will we see other gems rise and become interesting and vicious? absolutely. it's a possibility, i think that there are a lot of beautiful minerals out there that are not being traded as is very expensive or legal items and taste, change interest change. i wouldn't be surprised at all. you'll see that some of these items that are today viewed and sort of pedestrian become desirable and of interest. marketing will, haven't had that interesting brand,

will come out with design or jewelry line that is based on a certain item that will promote it clearly. so it's definitely a possibility. so we know that the rarity of diamonds is somewhat manipulated by the beers who have monopolies. what about the color gems? markets are the color precious gen innately scares or are there other market forces at play? it's a common misconception that the beers is a monopoly, that is gaming prices. so. so look for the past, you know, back in the old days, you know, 304050 years ago, the beers had an 80 percent market share. was a combination. talk about market your bucking by the value of rough diamonds. this market was created not. ready owned by the fact that the beers was the largest diamond minor in the world, who was also the largest marketer. in other words, it would buy diamonds from other companies and market it jointly and made

a lot of sense for the exploration other exploration mining companies. you didn't have to deal with the marketing process, you have to clean the dime into the sort the diamonds. they didn't have to maintain a large operation of understanding. what's the price of certain stone, that of, you know, 3 to 8000 different ways of, of the breaking you can bring the diamonds up to somebody down 530023000 categories and some breaking to a 1000. so there's a lot of a lot of issues involved and how do you price and market a diamond. so it was easy to provide it to the abuse. about 20 years ago, the company became very sensitive issue of its monopoly mystic position and made a couple of changes in the way that it works that changed it. so today the beers is

about my value. 30 percent of the supply to the market is another company. all rossa that up until about a year ago when they found distinction. youth sanctions in february 2022 because it's a russian company. so, but at that point it was the biggest supplier of diamonds by phone, right, by value a little bit less. so not only that, the beards isn't the biggest diamond minor anymore. you know, some could argue that, that part of me, not only would you say that. so now it could be argued that not only that the beers is not a majority provider, inclusive provided to the market. that in fact, it's not even the biggest company in the market because there's another company that sells more by thank you so much,

even go on for your time and insight. now in the debate between diamonds and colored jan's is the consumers who are ultimately decide are these beautiful stones worth? the stress we put on the environment is the cost justified when the lands are stripped and rivers polluted. ultimately, it is up to the consumer to decide if it is worth it to them, or if they're happy with a counterfeit. i would say, synthetic sense, counterfeit has the connotation of deceit, and people are not necessarily being deceived. but the beauty of purchasing a stone that has been growing for millions of years and then plucked out of the ground is so special. and no amount of technology could ever replace or even come close to the fascination of a natural stone. but at what cost to the admirer, i'm christie. i thanks for watching. and we'll see right here next time on the cost of everything.

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