Why are Diamonds Expensive?

A Tale of Sparkle and

Smoke and Mirrors

Introduction:
Diamonds, shimmering on engagement rings and dazzling
in necklaces, hold a powerful allure. But have you ever
wondered why these little rocks command such exorbitant
prices? Today, we'll delve into the world of diamonds,
uncovering the science, history, and marketing magic that
inflate their value far beyond their inherent worth.

Nature's Play with Carbon:

Contrary to popular belief, diamonds aren't some exotic
alien mineral. They're simply carbon, condensed under
immense pressure and heat deep within the Earth. Millions
of years later, volcanic eruptions bring these gems to the
surface, a testament to nature's transformative power. Yet,
unlike their more common cousin, graphite, diamonds
boast an incredibly rigid internal structure, making them
the hardest natural material on Earth. This exceptional
durability contributes to their longevity and, consequently,
their perceived value.

Diamonds Aren't Forever, Unless You Control Supply:

While diamonds are undoubtedly impressive, their price
has little to do with their rarity. In fact, their global
distribution is quite extensive. So, what really pushes their
price skyward? Enter the ingenious, and some might say
manipulative, story of supply control.
Our journey begins in the late 19th century, with Cecil
Rhodes and the formation of the De Beers cartel. By
consolidating diamond mines in South Africa, De Beers
effectively controlled much of the global diamond supply.
This gave them unprecedented power to manipulate
prices and create an artificial sense of scarcity.

Sightholders, the Gatekeepers of Sparkle:

To further tighten their grip, De Beers established a unique
distribution system: sightholders. These select few
companies were granted exclusive access to rough
diamonds at predetermined prices. This limited distribution
kept diamonds out of the hands of competitors and
maintained De Beers' dominance.

A Diamond Doesn't Sparkle Until It's Marketed:

But controlling supply wasn't enough. De Beers
understood the power of perception. Enter N.W. Ayer, a
marketing genius who saw diamonds not just as
gemstones, but as symbols of love, commitment, and
luxury. The iconic "Diamonds are Forever" campaign was
born, forever linking diamonds to eternal love and grand
gestures. Celebrities like Marilyn Monroe, adorned with
dazzling diamonds, solidified their association with
glamour and desire.

Two Months' Salary for a Rock? Absolutely!

De Beers even exploited cultural norms, famously
suggesting that a man should spend two months' salary on
an engagement ring. This slyly equated diamond size with
a man's love and financial commitment, further inflating
diamond prices and expectations.

Nicky Oppenheimer's Blunt Admission:

The irony of this carefully crafted myth wasn't lost on
everyone. Nicky Oppenheimer, a former De Beers CEO,
famously quipped, "Diamonds are intrinsically worthless.
It's just that humans have given them meaning."

In Conclusion:
Diamonds may be nature's marvels, but their exorbitant
price tag is a carefully constructed illusion. Artificial
scarcity, clever marketing, and cultural manipulation
weave a narrative that transforms carbon into a symbol of
eternal love and extravagant wealth. So, the next time you
see a diamond sparkling, remember, it's not just a
gemstone, it's a testament to the power of human
ingenuity, and perhaps, our susceptibility to a well-spun
story.