De Beers price cuts indicate hard times for ugly diamonds
Nasty, and now cheap, lower-quality diamonds have been having a tough time of late, because there are just too many of them
De Beers has been forced to make big cuts in what it asks customers to pay for the worst diamonds it sells. It’s the latest sign the industry’s cheapest goods are increasingly unloved. The industry produces about 15,000 different categories of diamonds, ranging from giant flawless gems that sell for millions of dollars to fragments worth just a handful. In the past few years, those at the bottom end have been having a tough time. The biggest headache is that there are just too many lower-quality stones.
While no new major diamond mines were built between 2003 and 2012, recently, a spate of new projects started in Lesotho, Canada and Russia. These ventures have compounded the problem by producing more than the industry average of low-value stones. Existing producers have also been increasing output. Rio Tinto Group’s Argyle operation in Australia produces a greater volume of diamonds than any other mine, but they sell for just $15 a carat. That’s less than a 10th of the average...
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