Why Are Diamonds So Expensive?

Diamond Buying Guide

It is a very well known truth that diamonds are expensive. However, rarely do people know the reason why the diamonds are so expensive. Usually if some stones or jewelry is very rarely found, they will be very costly. Nevertheless, in the case of diamonds, they are not that rare. Diamonds are more available than even emeralds, sapphires and rubies.

It is true that once the diamonds were not that easily found everywhere. It was not until the mid-1800s that the huge quantities of diamonds were found in South Africa. By the early 1900s, there was large number of diamonds available all over the world. In 1938, the marketing company of the De Beers Consolidated Mines made an advertising statement that the diamonds are forever. They said that diamond is the only widely accepted symbol of betrothal. The diamond rings became an integral part of betrothals in that way.

It must be understood that it is not rarity which makes diamonds expensive. According to the GIA, around 6 billion carats of diamonds were mined until now. There are also methods to create the diamonds artificially in a lab. It is not even the accessibility, which makes the diamonds expensive. There are around 20 significant diamond mines at work today producing more than 120 million carats of diamond every year.

It is a small number of companies that handled the major part of the diamond supply around the world. This has been the main reason for the high prices of diamonds. This was made easier by grouping the diamond reserves based on the geographical region in which they are situated. In fact, just five companies control about 72% of the diamond supplies around the world. Thus, the high price of the diamonds is because of the constrained supply, cultural significance and limited competition.

In the present world, the synthetic diamonds are available easily and for a cheaper price than the original diamonds mined from the earth. At first, the synthetic diamonds were used only for industrial purposes, but after the growth of technology, they are now available in pure form and are used by the common people.

In terms of its durability, the diamonds are forever. However, in terms of value, the diamond cannot be said as forever valuable. It is because of the reason that the diamonds have undergone price variation in the past.  Therefore, it will be in your best interests to know the details of the diamond you are planning to buy, beforehand so that you can ensure if your investment is worth it.