In the beginning, there were only Indians in the diamond business. This is because the first diamond mine was in India. The diamond men of India were brave, intelligent, business savvy, and were prepared to take risks to develop their Industry. Centuries later when diamonds were discovered in Africa, change was inevitable. With the advent and growth of DeBeers the modern Indian diamond industry was born, or should I say reincarnated. These men were also brave, intelligent, business savvy and prepared to take risks to develop their Industry.
DeBeers did not make it easy for the Indians. They gave America, Belgium, Israel and South Africa, the bigger, better diamonds and gave India the smaller poorer stones. DeBeers’ logic had a basis, and in many ways their policy towards India was correct. They reasoned that if they gave India the same goods as the other diamond countries, those countries would not be able to compete with India because of India’s much lower costs of production. This was absolutely correct and this policy made it possible for the other countries to expand and grow, albeit at India’s expense.
Interestingly, this vary lack of support was in reality a blessing. Indian diamond manufacturers were able to take any shape, size, color and clarity and develop a market for these stones. In order to do this, Indian companies marketed their stones all over the world where diamond tastes are varied and where they could sell just about anything they produced. This business model made India the largest diamond trading center in the world by volume.
Now, the world has changed again. DeBeers is still the major player, but their policies and the directions of other producers have eroded their market share and power. In addition, there are many more players purchasing rough diamonds today including hedge funds, banks and private investors. Other than sight holders, whose numbers have shrunk substantially over the years, most diamond manufacturers are short of profitable rough.
For those who understand Zimbabwe coated rough, and are lucky enough to win the tenders in Antwerp, they have few complaints. However, Zimbabwe has suspended all rough sales in Zimbabwe and one cannot currently purchase rough in Zimbabwe from the MMCZ, the only legal supplier. The rumor is that trade will begin again soon, but few, if any, know of any new schedule.
For the rest of the diamond world, it is a struggle to find profitable rough. For Western countries and for the hedge funds, banks, and private investors, finding rough with value has become a major challenge. This is because all of them want the exact same stones. 4.00 Ct. up to 20.00 Ct., If-VS2, D-H color, Sawable1, Sawable 2, Makable 1, Makable2. No flats, no macles, no cleavages and little or no florescence.
Despite the claims on the internet, these goods are hard to find and I rarely see any bargains when it comes to these stones. As a matter of fact, I am in Kono, Sierra Leone currently. If you are unfamiliar with Sierra Leone, Kono is the main diamond mining area in Sierra Leone and getting here is a driving nightmare. Further, these goods are in short supply and when you do find them, they are expensive.
And this brings me to the point of my article. It is a well-known fact that small goods, flats, macles, cleavages, strong blue florescence and off colors are not desired by the above aforementioned clients. Because of this, the various diamond source countries are sitting with a large stock of these goods. The DRC, Guinea and Sierra Leone are the countries in which one can find the largest quantities of these goods at the cheapest prices. For those who can use these goods, a fortune awaits you in these countries.
In other words, these countries are ripe for plucking by the Indian diamond industry. Why is it then that you see few, if any Indians in these markets? The answer is simple: The diamond men of India today are not cut of the same cloth as their fathers and ancestors. They are not brave, intelligent; business savvy people who are prepared to take risks to develop their Industry.
Wow! What a thing to say! My Indian wife is most likely not going to be happy with my statement. Despite my fear of the wrath of my wife, I have to say this. I do not say this statement lightly, or with ill will towards Indians. I say it because I get calls from many Indian companies who are seeking rough and almost without exception; they are unwilling to do what must be done today to secure a steady and reliable supply of rough. They are afraid to lose their money, they are afraid to waste their time, and yes, they are afraid to go to these countries because they are afraid they will be scammed, or become sick, or God forbid, they will be kidnapped and murdered.
To be fair, all of the above can happen to anyone who goes to the DRC, Guinea and to Sierra Leone. You must be connected to the right people, both in government and with suppliers. You must put into place your banking. You will have to obtain your diamond buyer’s license. You will have to set up a local company and you will have to obtain the correct working permits and documents. Unless you want to open your own export company, you must have a verified, reliable exporter. In addition, the right security is essential, as is having the right driver and SUV for in-country transportation. Knowing where to stay and more importantly where not to stay, is also of paramount importance. if you do not know how to work with the Ministry of Mines in DRC and Guinea and the GGDO in Sierra Leone you will also find it difficult. And of course, if you do not understand how to safely ship and import your stones back to India you will suffer costs and delays.
Have I not outlined the cause of all your fears? Of course you have none of the requirements to go to DRC, Guinea and Sierra Leone. How could you? However, it is because you are unlike your fathers, that you see only obstacles and risks, while your fathers saw opportunity and wealth to be created because of the very adversity that stops the timid and unimaginative. Herein lays the difference between you and your fathers.
Let me give you an example of the way your fathers thought. I have told you of the abundance of diamonds that are available to the Indian diamond trader. I explained that most of the goods available are unwanted by the Western diamond companies, hedge funds, and private investors. And immediately, many dismissed my premise because they too would prefer the larger better goods. Your father’s minds would have had a different view. They would have understood that by buying the goods the miners could not easily sell, they would endear themselves to the miners, and would be given the opening to buy the better, larger goods. The miners would happily sell them the better goods because the miners would much rather sell to those who will also take the less desired goods. Your fathers would have bought up the production. They would have sold off at cost, or below cost, any goods they did not wish to manufacture. They would have made up their losses, and garnered large profits with the other money-making goods. By working in this way, your fathers would have found reliable, grateful suppliers.
Who would you rather sell to, someone like your fathers, or those companies who don’t give a damn about you and only want to take the cream?
Is it easy to be successful in the DRC, Guinea, and Sierra Leone? Is this an easy task to accomplish? No; but it is certainly easier than what your ancestors and fathers had to go through to establish and build their businesses.
Now the only question is; who do you know that has all these connections, experience and expertise to make this happen for you. Gee… I wonder where you could find a guy like this?
Louis Pearl G.G.
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