COVID 19 IMPACTS ON THE DIAMOND INDUSTRY
From Merriam-Webster
Context
con-text | kan-tekst
Noun
1. The parts of a discourse that surround a word or passage and can throw light on its meaning
2. The interrelated conditions in which something exists or occurs
I love context because it helps me to understand people, events, things, etc. The diamond business included.
CHANGES ARE AFOOT
Yes, we’ve seen a lot of changes in the diamond business over the last few years, with the rate of change only accelerating. Lab Grown Diamonds (LGD’s) continue to be a trigger of change, as has the Covid-19 pandemic. The context for me is my observation that the diamond business has been going through nothing but change in the time I have been part of it (I’m not going to say how long that’s been other than, when I began the Mets had only ever won one World Series).
The new normal exists in a world where travel, at least for the time being, is not as easy, as cavalier, as it’s been in the past. Solving for that, perhaps by using digital platforms, helps us to create efficiencies in the way we operate our businesses. A ripple effect from there is a smarter business, where we are cognizant of the financial impact of inventory in an era where prices fluctuate more than they have ever before.
MANUFACTURING CAPACITY
Another logistical impact of the pandemic is the effect it’s had on diamond manufacturing capacity. Social distancing protocols exist globally, including the diamond cutting factories in Surat, India. Even working in shifts, the available production hours for polishing goods is diminished.
Business in the US seems to have been holding its own, but there is stress in many economies globally. That has an impact on the mining sector. They also must seek efficiencies; in some cases by shutting down some operations. Such actions serve to maintain a global balance between supply and demand. That balance matters because it helps to provide stability for diamond prices.
No conversation about the diamond business in 2020 can be complete without discussing lab-grown diamonds. Whether it’s the issue of solving for undisclosed lab growns (and therefore maintaining the integrity of our collective product offering), or the commercial question of lab-grown diamonds, we are all in the LGD business because we must all deal with it at some level. Ignoring it is not an option.
THE SILVER LINING
These are all the things that I think about on a daily basis, some even keeping me up at night. But then every once in a while something comes along to remind me of just how fantastic the diamond business can be. The last few years have seen the discovery of several very large and important rough diamonds. And 2020 alone has been quite remarkable.
Starting with the Karowe Mine in Botswana, which has been quite prolific. A 998 carat rough was found there recently, not long after a 549 carat diamond and of course there was the 1758 carater (you read that right) found there earlier this year. The Letsing mine in Lesotho produced a 439 carat stone and a 233 carater this year.
These spectacular gems will be polished to maximize yield and will ultimately adorn a very fortunate person, or perhaps one of them might ultimately find their way to a museum and be on display for all of us to marvel at and enjoy.
Closer to home is Crater of Diamonds State Park in Murfreesboro Arkansas, where a 9.07 carat rough diamond was found in September. It was the second largest diamond ever found there.
Murfreesboro Arkansas! Okay, that’s about 350 miles from Lafayette, not exactly on the way to the Bourbon Trail, but I can make that work. Sounds like plans for my 2021 summer vacation are starting to fall into place!
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