For the first time in more than a decade, the diamond industry’s biggest players appear ready to launch a new association. The primary catalyst for taking a big step forward? The rise of cheaply produced synthetic diamonds, which are having an impact on the industry.
Some of the world’s largest diamond producers may be getting into the association space.
A number of industry players met privately in London earlier this month to discuss launching an association, backing it with $6 million in funding, according to Bloomberg Business.
Among the companies taking part in discussions: Luxembourg’s De Beers, Russia’s Alrosa, and the British-Australian conglomerate Rio Tinto. (A few companies have not formally disclosed their attendance.)
The goal, according to a statement provided to Rapaport News, would be to form “an industry association for diamonds that would seek to better understand, address and protect the needs of diamond consumers.”
“A meeting was held to assess the need for a producer association similar to other commodity-based organizations,” officials from Rio Tinto told Bloomberg Business. “The idea of the body is to promote the interests of diamond producers and the diamond sector more generally. We will continue the discussions with industry participants.”
Synthetics An Issue
The key reason there is talk about an industry group involves a new form of competition: manmade diamonds. The gems, which are inexpensive to produce compared with naturally occurring diamonds, are especially problematic because sellers may try to pass off the diamonds as naturally occurring.
“Synthetics pose one of the more noticeable threats,” Lucara CEO William Lamb told Bloomberg, adding that an association would help to formalize an industry response to questions from consumers and investors on manmade diamonds.
Other issues the association could address include marketing and industry research—with the latter being difficult to come by due to a lack of organization within the industry, according to De Beers.
It’s not the first time a diamond-industry group has attempted to form: Back in 2009, the International Diamond Board was launched for this purpose. While several companies did work on the initiative, the group faced organizational struggles, including opposition from the Russian producer Alrosa, and ultimately failed to take hold.
(The World Diamond Council, a group launched in the year 2000 amid concerns about human rights, has had better luck.)