ah oh, why our diamonds so expensive and considered so valuable? diamonds are not particularly rare and compared to other colored gemstone, they're the most common, precious stone 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 x to mine of diamond. dime is

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 south 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 stand by the polish stones, usually add exhibitions, create the piece, set the 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 may diamonds are growing in popularity to the average person. these gems are indistinguishable from traditionally mind diamonds. and these live grown diamonds or l a. g 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 for more or less bring in eating goal on diamond industry analyst at diamond research and data. so how have the attitudes towards lab created, diamond or l? as gds shifted in recent years, it seems to be gaining traction with the market expected to double by $6000000000.00 by 2025 to entry. interesting question. so that has been around for the number of years and have entered the retail marketplace as

components in jewelry around 2016 by 2018. they were really already a thing. and at that point, they were, if we looked at the old diamonds, that is natural, diamonds and lab, grow them together. we're going to time are presented about 2 percent of the business to $1.00 to point to the end. really how you measure. we know that that figure has increase since 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 didn't reach 6000000000, but there is no doubt that this is a, an item of growing interesting,

the consumer market and, and we're seeing it growing rapidly at this point. and while l a. d. d, 's are trying to position themselves as more ethical compared with the traditional history of diamond money. are they really when it takes so much energy to buddhist them and most of them are made in china? there isn't one answer to this question. in other words, since it's an industry, some companies are ethical in defense of labor conditions impact on the environment, the federal that cannot be filled for all companies. there are a number of companies out in china that have facing a lot of criticism. some of it has to do with their energy use and interviews that is not clean. there is

a lot of criticism about working conditions in some of these places. so in general, i think we really need to, to break this down 1st has to do with it ethical in the sense that it is environmentally friendly and the other is ethical in terms of it harming anyone. in most cases we see that both the ethical side and, and environmental side kind of go hand in hand and and compared to, to the majority of natural to look at natural diamonds in mining their human condition. by and large, fantastic workers, a unionized in the largest companies, all of the large companies are, are public companies. so they're facing serious with me. 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 who have grown diamonds are by definition more difficult than, 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 the valley was an interesting one. so 1st of all, the issue of let's start with the market guys. environments. democratizing guys really started with the beers in the 940. they very accurately understood that in the. ready post. ready war 2 era were looking primarily the

united states and joined the 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 the very rich royalties to hollywood stars. but the average joe. ready didn't have an opportunity or the financial ability to buy them forever. was the campaign that said 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, that the market, the democratization of diamonds began 80 years ago.

so that's one another. and so there's 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. it makes it less available as well as them american 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, municipal social, which and i think everybody should have access to something. they say that a is beautiful and be makes and feel good. i think the biggest value of 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 made somebody happy. if you're the person being gifted,

does it remain a strong and positive memory? does it 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 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 i them will have a sort of a bifurcation diamonds. and with that in this, 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 hand, we're going to have something that is mass produced easily accessible. the cost of manufacturing and growing in will reduce over time making it more and more accessible and has such i don't expect it to be. ready a luxury item as much

as it will be a fashion item available to everybody. thank you so much, even 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 on hold and don't go away for ah, a ah

aah! watch in asia was of my in this got told if i give both money at the store in the shop now shorter went in and i'm not trying to stay lag tokenize skia. no one on you know what doc with that teacher just don't session. i provided national z m no less shyly your get been my get bonded when you sit on the ground. the idea. so what we've got to do is identify the threats that we have. it's crazy confrontation, let it be an arms. race is often very dramatic. development only personally,

i'm going to resist. i don't see how that strategy will be successful, very critical. i'm time to sit down and talk with welcome back. it's not does diamonds. that fascinated color gemstones, have had a resurgence of interest in recent years. for example, the duchess of cambridge is staff, our engagement ring, megan marco's aqua marine ring. and princess eugene coral pup, 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 basis. but all that growth comes with a price, which is unfortunately, the environment. pounds in world south africa like diggers, 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, isn't 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 in color, 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. and so this what 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 with damage. we're seeing that not old diamonds are investment 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 sizes that are very rare. so 5 carrots and above. so the flow list,

what is called the triple excellent, 5 kerry dime in his rear and the and as they get bigger and remain those other characteristics, they become more and more less. ready available in the market, and as such, what we see is that usually at times of crisis, their prices tend to rise. and, and looking about the time of crisis, we're talking 9 live in ashima, 2000 a coven, endemic and those kind of time, we see that usually many elements, many economic elements are declining. so the stock market price of gold sometimes usually goes up, but sometimes goes down real estate, which is an important investment, tends to prices real, estate tend to decline at those times when people usually do is they turn to

jewelry for a whole list of reasons psychological primarily, and, and emotional, and what we see those times is because there's a rising demand and usually those sort of times it's difficult to mine, which was clearly the case doing over 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 color than usual colors of pinks. red blues are, 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

diamonds. without that, mine is going to be a lot less being time is coming into the market so their prices are appreciating. that's the natural trend in terms of rubies and satisfies we're seeing those kind of trends with semi precious gems as well, although not the same extent. so the are some sapphires and emeralds and rubies that are appreciating and value. but this is primarily when they are attached to an interesting piece of jewelry. so nicholas is 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 we talk about investments in terms of, you know, if they go out to the store, my local specialty jeweler 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 the goods a little bit and then sell them. then 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 ass 23510 years ago. and now i want, you know, 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 holds on a 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 minds have already been depleted mines in me and more that contain the infamous pigeon blood, rubies or cashmere sapphires, or the gal condo mines 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 so tricky question. so let's start with with you know, what, what is available will be available. one of the answers to the kitchen. ready wholesale ability is technology, right, with you could be impossible to reach the past a little bit, suddenly become became available. when technology change, when exploration technologies improves when conditions of 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 the kilometer below sea level. so, so it's really a matter of technology. i had a conversation with the ceo of the beers with really 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 costs and complexity of mining it is resources were never. busy developed and that were able to develop them and we'll see that the music was 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, for sapphires, emerald, et cetera. so that's the answer. the 1st part of the question, will we see other gems rise and become interesting and gracious? absolutely. as a possibility, i think that there are a lot of beautiful minerals out there that are not being traded as is very expensive or valuable items. and, you know, tastes 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 have had and that, you know,

some interesting brands 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 play? it's a common misconception that the. ready is, is a monopoly that is gaming prices. so look for the past, you know, back to the old days, you know, 304050 years ago, the beers had an 80 percent market share. was a combination of our market share fucking by the value of rough diamonds. this market was created not only by the fact that the beers was the largest diamond minor in the world who was also the largest marketer. in other words. ready would

buy diamonds from other companies and market it jointly and made a lot of sense for the exploration other exploration mining companies. we didn't have to deal with the marketing process. we'd have to clean the diamonds of 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 breaking you can bring the diamonds up to that some break 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 viewers. about 20 years ago, the company became very sensitive. issue of it's not the listing 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 the market. there's another company rosa that up until about a year ago when they found the sanctions you sanction in february 2022 because it's the russian company. so, but at that point it was the biggest supplier of diamonds by writing, by value a little bit less. so not only that, the beer is, is the biggest minor anymore. it's, it's, you know, some could argue that, that'll get me not only would you say that. so now it could be argued that not only that de beers is not a majority provider. monopolistic 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, jans is the consumers who will 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 my, me, i'm christy. i thanks for watching and we'll see you right here next time on the cost of everything.

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