Lifting the Veil of Mystery

Diamonds are one of the world’s major resources—and historically one of the least understood. For many
years observers and even many participants have considered the diamond industry to be complex and difficult
to comprehend, even impenetrable. This report is the first step in the process to shed light on the multibilliondollar
industry, which spans the globe and involves a wide spectrum of players, from mining to retail.
Major changes over the past 50 years have transformed the diamond industry. New diamond supplies have
emerged, and mining and production have expanded beyond southern Africa to Russia, Australia and Canada.
Structural changes introduced by De Beers and its Central Selling Organization (CSO), which once led the
industry, have opened up the field to more competition.

In this report we trace these developments, explain the mechanics of mining, and explore the two main uses
of diamonds: in jewelry and for industrial applications. We touch on the structure of the value chain, from
the financial risk involved in early exploration to the economics of the retail trade. We devote one chapter to
the potential impact of synthetic diamonds on the jewelry sector.

We also explore potential future scenarios through a supply-demand forecast. With the prospects for demand
rising in key consuming countries, demand for rough diamonds is set to outpace supply over the coming decade.
We have conducted numerous interviews with players in all segments of the value chain and gathered a
consensus opinion wherever possible. Other sources of information were the latest public announcements,
presentations and annual reports of diamond companies.

For readers who want a quick overview of the report’s findings, each chapter ends with key takeaways that
summarize the chapter contents.

Given Antwerp’s leading role in the diamond industry, it is fitting that AWDC sponsored this report. Over
hundreds of years, Antwerp has created a robust diamond cluster that includes a multitude of specialized
players, including producers, sightholders, high-end cutters and polishers, and specialized financial and
educational institutions. The dynamics of competition and cooperation ensure that the city remains at the
heart of the international diamond trade.

We hope you find the insights in the report useful, and we welcome further conversations on the subject.