By Evert P. Botha
There has been a lot of talk of late about a lack of high-quality rough diamonds. The fact is, new discoveries are few and far between, and even when they are made, it can take up to 15 years to bring a mine into production. Yet, there seems to be a new source that has come online recently that few anticipated: the street mine.
They are known as off-the-street diamonds and by that, I mean recycled stones—those that have re-entered the market as the result of broken engagements, estate sales, or just plain selling of assets to pay debt. And it looks like this is big business.
Open any trade publication and you will likely see advertisements for companies that buy used diamonds. No doubt, it’s become a thriving industry, the bulk of it focused on smaller goods and melee. Individually, these stones have little or no value, but when aggregated in sufficient volume, they can be sorted, sold, and shipped to India or elsewhere to be recut to create matching parcels.
Industry analyst Chaim Even-Zohar estimates the market share of recycled diamonds in 2012 grew by 5.5 per cent to $1.2 billion. He also believes there is up to $1 trillion worth of ‘used diamonds’ locked away in safety deposit boxes and jewellery cases around the world and many could find their way into the market. According to consulting firm Bain & Co., recycled polished diamonds could eventually account for anywhere between five to 10 per cent of current market supply. Still, these numbers may be understated, as some experts believe a great deal of trading in recycled diamonds happens in private and is not necessarily reported.