This Historic 102-Carat Diamond May Be One of the Most Expensive Gems Ever

In his latest article, “Diamond Recycling Could Save the Natural Industry”, diamond industry analyst Paul Zimnisky argues that in contrast to conventional wisdom in the industry – that an increased rate of diamond recycling results in downward diamond price pressure due to the theoretical increase in supply – a more robust diamond recycling could, in fact, “be the natural diamond industry’s saving grace”.
Zimnisky argues his point from several angles. First, he claims, the diamond industry could brand recycled diamonds as “green” or “environmentally friendly” to a rising generation of consumers “that perceive diamonds as environmentally and socially unscrupulous, not rare, and overpriced”. And, in contrast to lab-grown diamonds that still demand the use of “a significant amount of energy”, recycled natural diamonds are free from this issue.
Second, as recycled diamonds are cheaper, a competitive recycled market could “in effect support the market price of all natural diamonds, primary and secondary market”.
Third, natural diamonds – in contrast to lab-grown – are a non-renewable resource, limited in nature. This value, he says, is evident in in the secondary market for natural diamonds, as “most of the prominent C2B (consumer-to-business) buyers of diamonds tend to only buy natural”.
The recycled diamonds market is still small, and Zimnisky quotes reports that claim that it accounts for only 1-3% of natural diamond supply on an annual basis (2 to 4 million carats of rough equivalent) with an annual growth of 3-5%. The industry, he says, “should target a discount between the retail price of a natural diamond and the resale price, i.e. a ‘haircut’ that is less than the cost of an equivalent lab created diamond”. That, he claims, will make it more sensible for consumers to buy natural over lab-grown.
And, while industry push back is understandable concerning recycled diamonds, “the benefits of a more prevalent diamond recycling industry arguably outweigh the potential costs” – for miners, who could benefit from higher overall diamond prices; for manufacturers, who could enter the business of re-cutting recycled diamonds; and for wholesalers, who could deal in recycled diamonds as “traditional margins continue to be squeezed”.