The Ultimate Guide to Buying Raw Diamonds

Fused deep in the earth’s crust under immense pressures, the beauty and mystery of raw diamonds have fascinated people across many widely differing cultures through the ages. Also called rough diamonds, raw diamonds can look similar to quartz before they are cut and polished, making appraisal difficult even for the trained eye. However, they can offer a unique opportunity for those willing to do the work. Understanding Raw Diamonds Raw diamonds, or rough diamonds, are diamonds as they are found in their natural state. They can look a lot different than finished diamonds, making it hard to assess their final brilliance and value without doing many different kinds of tests. When testing raw diamonds, experts use a standardized set of parameters when making their assessment. They come in many different colors, shapes, and sizes, with varying amounts of flaws and levels of clarity. Each of these properties can greatly affect the gemstone’s final value, depending on their rarity and combination. Raw diamonds often look like a simple piece of glass or shard of quartz to the untrained eye. Although valued in themselves in their untouched, natural state, most people are used to seeing diamonds only in their finished form, making the look of raw diamonds a bit surprising. Once a person has handled and examined many hundreds of them, though, there are many characteristics that can be seen and evaluated by experts. How are Raw Diamonds Sourced? Rough diamonds are sourced in two ways: pipe mining and alluvial mining. Pipe mining:

The more standard form of diamond mining, it involves extracting diamonds from “pipes” volcanic fissures, near the earth’s surface. Alluvial mining: While almost all natural diamonds are formed in volcanic fissures, some of these are carried by erosion into riverbeds and beaches. Alluvial mining focuses on these transported diamonds. Why Choose Raw Diamonds? There are two main reasons people buy raw diamonds: Investment Potential: Raw diamonds can appreciate in value, especially if they are rare or have desirable qualities. This is a very common reason people buy raw diamonds, in the hopes that their assessment of them will yield a better value in the final diamonds than the cost of the labor and the raw diamond itself. Customization: Buying a raw diamond allows you to customize the final form of the finished diamond, allowing you to create a truly unique piece of jewelry. This is a great use of raw diamonds, as you may be able to find unexpected uses of oddly shaped ones. Evaluating Raw Diamonds First-time buyers of raw diamonds can often mistake them for other minerals like quartz, which can appear identical to uncut diamonds. Identifying genuine raw diamonds typically requires a series of rigorous tests, including their hardness on the Mohs scale, internal components, refractive index, and their origin. The following are the main factors that affect a diamond’s value: Carat Weight: The weight of gemstones in carats. Larger stones are typically more valuable, although this also depends on the other factors on this list. Color: Raw diamonds come in a wide spectrum of colors. While clear diamonds are traditionally the most highly valued, there are some colored diamonds that fetch equally high or even higher prices. Clarity: This refers to the internal and external flaws of a diamond. In raw diamonds, clarity can vary greatly and is the most important factor affecting the stone's value after weight. Shape: Each raw diamond’s natural shape defines how it is best cut and, for that reason, a good amount of its value. Some shapes are more desirable than others, depending on current market trends. Sawn: A 'makeable' stone can be cut such that you can get one polished diamond from it. 'Sawable' diamonds can be cut in half to create two or more diamonds with better shape. You can look up online calculators that can estimate the typical amount of weight that will be lost from raw diamonds after being cut and polished, giving you a good estimate of their final value. Rough shape, inclusions, crystallizations, deformations, and internal stress can all play a role in this calculation. In addition, you should look for conflict-free diamonds that comply with the Kimberley Process Certification Scheme, which helps to prevent the sale of "blood diamonds." Most reputable dealers will be able to provide this as the issue has gained a lot of traction and has been greatly eased in the last decade. After being processed, you can get the diamond evaluated at one of the numerous diamond grading laboratories. Two of the most used of these are the Gemological Institute of America (GIA) and the American Gem Society Laboratories (AGSL). At these facilities, the diamond's color, clarity, carat weight, and cut quality are meticulously examined and evaluated. Diamond Polishing Process Whether you’re looking to turn your raw diamonds into polished stones for a handmade piece or you’re just looking to invest in the best rough diamonds for others to cut and polish, it’s essential to know how the process works. Transforming a rough diamond into a polished gem involves five (5) phases: Planning: During this initial phase, the final diamond's size, clarity, and shape are precisely planned to avoid any costly mistakes. Sawing: Some raw diamonds may be cut to make multiple smaller diamonds if the shape makes more sense when cut in two or more pieces to get a desirable final form. Bruiting: During bruiting, the diamond is spun against another diamond to shape it, forming a rough outline of the final shape before moving on to more precise polishing. Polishing: Consisting of blocking (polishing initial facets) and faceting (creating the final facets), to achieve the diamond's full brilliance. Inspection: A final examination of the diamond’s cleanliness and adherence to quality standards. The whole process aims to use as much of the raw diamond as possible, given its shape and flaws, to keep the most weight while producing the highest-quality and most brilliant final cut and polish.

Keeping Up with the Rough Diamonds Market

Between 2023 and 2028, the rough diamonds market is expected to see a significant uptick due to factors this article will explore, including growing demand for uncut and polished diamonds alike, smaller diamond companies increasing their diamond production, and price fluctuations in the diamond market. What are the implications of these changes for diamond jewelry companies and auction houses? Rough Diamonds Market Trends This question is worth exploring in depth. After all, what happens with the rough diamonds industry can reshape the trajectory of the entire diamond market as we know it. 1. A Growing Demand for Uncut Diamonds Numerous recent reports suggest the market for uncut diamonds is on a promising growth path, this is good news for diamond companies, jewelry companies, and auction houses. According to a study referenced on News Channel Nebraska, there’s an anticipation of substantial growth over the next five years. Fueling this demand for uncut diamonds, increased consumer demand, and interestingly a rising interest in raw uncut diamonds for bespoke jewelry pieces. This trend creates an opportunity for auction houses to feature unique rough diamond pieces to cater to an evolving clientele. While growth comes with opportunities, it can also come with challenges. One such example is the transformational agreement between diamond mining giant De Beers and Botswana. 2. The De Beers & Botswana Agreement In a defining moment for the diamond industry, De Beers and Botswana inked an agreement reflective of the pressures from declining diamond prices and increased competition. While Botswana provides 70% of De Beers’ rough diamonds, the country’s economy relies heavily on these sales. Diamond mining accounts for roughly a third of Botswana’s GDP, playing a significant role in elevating the southern African country to its status as the continent’s sixth wealthiest nation. As the deadline for a new agreement approached, Botswana’s President Mokgweetsi Masisi expressed concerns about the terms with De Beers, emphasizing the need for a more equitable distribution of rough stones. Consequently, De Beers made adjustments to their proposal. Al Cook, De Beers CEO, highlighted the mutual importance of reaching an agreement in a statement to Reuters: “There was a desire to cooperate and reach a deal. The opposite would have been very damaging for everyone concerned.” Botswana’s negotiation skills resulted in securing a substantial increase in its diamond production share from their Debswana joint venture, set to rise to 30% soon and 50% by 2033, up from the current 25%.

Further, Botswana clinched multi billion dollars commitments to prolong the operational life of its Jwaneng diamond mine, one of the world’s most prosperous. Analysts express mixed sentiments about the deal. While some foresee financial strains for De Beers, others acknowledge the avoided potential dispute’s value. Cook summarized the agreement as a win-win, meeting the needs of both De Beers and Botswana. 3. The Ripple Effect of Price Fluctuations on the Rough Diamonds Market The rough diamonds market has seen its fair share of price alterations. These fluctuations haven’t come as a big surprise to most diamond businesses: During the pandemic, rough diamond prices soared to an all-time high alongside other diamonds. Like most industries that experience drastic upticks in sales during major world events, prices were expected to come down eventually. Despite knowing those high prices were unlikely to last, auction houses, in particular, need to adapt to these price changes quickly, ensuring they offer competitive bids and valuations. While periodic price changes are a market norm, it’s the magnitude and speed of some of these adjustments that capture industry attention. For instance, the anomalies we observed in February 2022 stand out as unique rather than representing a typical trend in the rough diamond market.

Importantly, these larger-than-usual fluctuations don’t imply the rough diamond market is inherently volatile, they tend to be quite the opposite. Rather, they underline the importance for diamond companies and jewelry makers to be attuned to market signals and adjust their pricing strategies prudently. 4. A Surge in Diamond Manufacturing Activities Unsurprisingly, with the uncut diamond market expanding, the manufacturing segment isn’t far behind. The growth in the rough diamond sector is not isolated to rough diamonds either, various verticals are supporting an increase in diamond manufacturing activities. This surge is excellent news for the diamond supply chain as a whole, from miners to retailers. It allows businesses to expand their offerings and cater to a broader audience. Again, however, this is not without its challenges. With increased manufacturing comes the demand for improved infrastructure, skilled labor, and more sustainable practices. Diamond jewelry companies, which often source directly from these manufacturers, must be extra vigilant about quality control, the provenance of their gems, and sustainable diamond manufacturing practices. Keep a Pulse of the Dynamic Rough Diamonds Market In its shimmering allure, the rough diamond market remains as dynamic as ever. These trends and developments indicate an evolving landscape ripe with opportunities and challenges. For diamond companies, jewelry makers, and auction houses, adapting to these uncut diamond market changes and capitalizing on them will be the key to continued success. At GEM TRADING, we remain committed to keeping a pulse on the entire diamond market’s heartbeat, ensuring we’re always a step ahead, catering to our clientele’s diverse needs and preferences in this ever-shifting diamond universe. Who is the diamond market leader? Market share of the leading diamond producers worldwide. As of 2023, the Russian diamond mining conglomerate ALROSA had the largest market share of any diamond mining company in the world, 31 percent. In a close second, De Beers accounted for 29 percent of the global diamond production market share. Who is the largest producer of rough diamond in the world? Russia retained its position as the top country in terms of rough-diamond production value in 2024, after surpassing Botswana for the first time a year earlier. The federation-maintained output from the previous year. Russia is the largest diamond producing country in the world, contributing to 25% of the global supply.