If you’re planning on buying a diamond engagement ring, you may be wondering when you look at the price tag, “Are diamonds rare? Why are they so expensive? Is demand for diamonds driven by advertising? Do diamonds have intrinsic value?” We take a look at these questions and more.
If diamonds are made of carbon, why are they so rare?
Diamond is the only gemstone made of a single element: 99.95% carbon. The other 0.05% may be one or more trace elements, atoms that are not part of the diamond’s basic chemical structure. Some trace elements can affect a diamond’s color or crystal shape.
Carbon is one of the most common minerals found in nature. But to crystallize into diamonds, carbon must be subjected to extreme heat and pressure deep beneath the Earth’s surface, in the mantle. Under these conditions, each carbon atom forms short, strong bonds with four neighboring carbon atoms. Graphite is another form of carbon that crystallizes at lower temperatures and pressures in the Earth’s crust, so its crystal structure is completely different. Graphite is very soft and is used in the production of pencils for writing, while diamonds are so hard that only diamonds can scratch them.
Diamonds were formed 3.5 billion years ago, and some were brought to the surface by volcanic eruptions millions of years ago. Many diamonds remain embedded in solidified igneous rocks, typically kimberlites, dispersed over the years by the movement of the Earth’s crust, eroded by host rocks, and carried hundreds or even thousands of miles by rivers and other water currents. Countless diamonds have not survived this process due to their cleavage (the tendency to break or split due to their atomic structure) or because they are encased in larger inclusions.
Large, quality diamonds are rare – like this 8.25 ct, D color, VVS2 clarity pear-shaped diamond in this engagement ring. The shank also features another 1.25 ct of diamonds.
Why are diamonds so expensive?
Most diamonds are expensive to mine because large amounts of ore must be removed and then processed (crushed and cleaned) to obtain the diamonds. Diamond mines are often located in remote areas, further complicating mining. Mining in the tundra of Siberia and Canada, or in remote areas of Africa and Australia, presents special challenges and high costs.
Surrounded by frozen tundra in Canada’s northern region, this diamond mine hints at the challenges of extracting this precious gem from the ground.
And, as with most things we buy, quality and rarity increase value. Low-quality “industrial” diamonds make up a large portion of the rough that comes out of most diamond mines. These are not suitable for jewelry. While the ratio of gem-quality diamonds to ore varies from mine to mine and even within the same mine, workers typically have to process about a ton of stone to get a half-carat rough stone, which may only weigh half that amount, or 0.25 carats, when faceted.
Like most diamonds mined, these rough diamonds are not gem quality. They are more suitable for industrial use. Courtesy: Thomas Hunn Co.
Today, diamonds are plentiful and affordable, but large, high-quality diamonds with high clarity and good color are still quite rare.
Depending on the mine, 100,000 tons of kimberlite or secondary material may be processed to produce a 1 carat D flawless diamond. The rarity of diamonds of this quality is reflected in their price.
A D color round brilliant cut diamond is a thing of beauty. This diamond weighs an astonishing 102.34 carats. Even so, excavating the rough stone from which this diamond was cut was like finding a needle in a haystack.
A 1 ct. fine cushion-cut diamond sparkles in this engagement ring. An additional 0.70 ct. of diamonds dazzle in the setting.
The rarity of colored diamonds
Colored diamonds take the question, “Are diamonds rare?” to an extreme. Most colored diamonds are rarer than diamonds in the GIA D-to-Z color range . Some experts estimate that colored diamonds make up only 2% of total rough diamond production.
While yellow and brown diamonds are relatively common, all other colors are rare. Medium to dark tones and medium saturation red, green, and blue diamonds are extremely rare. Relative rarity is difficult to judge, but violet, purple, and pure orange without a hint of brown are the rarest diamond colors. Among them, high-quality pink diamonds are the most sought-after and are hard to come by.
The value of these unique beauties is soaring: the 59.60 ct CTF Pink Star – an internally flawless Fancy Vivid pink diamond – was purchased by Chow Tai Fook for a staggering $71.2 million in April 2017.
The one-of-a-kind CTF Pink Star—a 59.60-carat Fancy Vivid pink diamond—recently sold for $71.2 million. It is one of the most unique treasures on earth.
Brown diamonds were often reserved for industrial use until the 1980s, when Australia’s Argyle mine began producing large quantities of attractive brown diamonds. Savvy marketers named them “Cognac,” “Champagne,” and other appealing names, successfully creating demand for brown diamonds among the jewelry-buying public.
This platinum ring features a 7.01 ct Fancy Dark Yellow Brown heart-shaped diamond and 16 round brilliant cut diamonds.
Yellow is the second most common color of diamond. Yellow colored diamonds are more abundant than other colored diamonds , but still only account for a small portion of overall diamond production. The beauty and color intensity of yellow colored diamonds offer a wealth of possibilities for engagement rings.
A 2.02 ct Fancy Intense yellow diamond is extremely rare, and the price of this ring will reflect its value. It is flanked by a trilliant cut diamond.
Does advertising create demand for diamonds?
The idea that clever advertising created our desire for diamonds is wrong. The unique qualities and scarcity of diamonds have made them a coveted gem for centuries. The craze for diamonds began in India, where people panned for them in rivers and streams. As early as the 4th century BC, diamonds were traded as a commodity and sought after by the wealthy.
Caravans brought Indian diamonds and other exotic goods to the medieval markets of Venice. By the 15th century, diamonds were becoming a fashion accessory for Europe’s upper class, and the discovery of diamond mines in Brazil in the 18th century further fueled the desire for the gem.
Diamonds remained rare, however, and only the nobility and wealthy could afford them until the discovery of diamond mines in South Africa in the 1860s. South Africa’s rich deposits—and later discoveries in other African countries, Russia, Australia, Canada, and elsewhere—made diamonds accessible to the burgeoning middle class.
Do you think the popularity of diamond rings is a new thing? This antique diamond ring is from the late 18th century.
Why we think diamonds are important
While advertising didn’t create our desire for diamonds, it certainly helped fuel demand for them, especially in the early 20th century.
Copywriter Mary Frances Gerety penned the famous slogan “A diamond is forever” in 1947, which has appeared in nearly every De Beers ad since. The campaign was so compelling and persuasive that diamond engagement rings quickly became a way to express love and commitment in marriage. In fact, the slogan was voted the best advertising slogan of the 20th century by Advertising Age in 1999.
Advertising has been extremely successful in shaping the diamond’s image, not only as a symbol of status and luxury, but also as the perfect symbol of a long and successful marriage. But it would not have been as effective if it had not also tapped into the deeper connection humans have with the inherent qualities of diamonds: durability, eternity, beauty, and scarcity.
Now that you have a cursory understanding of the scarcity of diamonds, you may want to explore another factor that determines a diamond’s value: the 4Cs of diamond quality .
