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vWhen the media spotlight

ell on the recent war

crimes trial o Liberias

ormer president Charles

Taylor it illuminated

ethical concerns over theorigin o diamonds. Has it

made their sparkle much

less attractive?

By Richard Willsher

Blood, conict, war, hot

or converted diamonds are

those used to nance war

and conict. Angola, Ivory Coast,

The Democratic Republic of Congo

(formerly Zaire), The Republic of Congo

(Congo Brazzaville), Sierra Leone and

Zimbabwe are all countries that have

been reported to be sources of such

stones. Until 2003 when the Kimberley

Process Certication Scheme (KPCS)

was introduced under United Nations

General Resolution 55/56, there was

no system to assure buyers of rough

diamonds that they did not originate

from war zones.

The KPCS set out a series of warranties

for consignments of stones and

established principles by which the

diamond industry was to regulate

itself. These include, among others,

only trading with counterparties that

provide KPCS declarations on their

paperwork; not buying diamonds from

suspect sources and not assisting in

buying or selling diamonds from such

sources. But while the KPCS has been

largely successful, with the exception of

two Canadian brands, Polar Bear and

CanadaMark, which carry a minute laser

engraved serial number, the origins of

diamonds cannot be proved.

What of those which came to market

before 2003? And how ethical do

we want to be? People who dig for

precious stones, gold and many other

commodities, including oil are often

in remote, lawless regions of the

Diamonds are

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Until 2003 there

was no system to

assUre bUyers of

roUgh diamonds

that they did not

originate from

war zones

returns. A visit to www.ajediam.com is essential

however to grasp the detail and very strict

denitions of the diamonds which fall within

their price trend graph.

Four Cs

Buying cut diamonds boils downs to four Cs.

The cut or quality of craftsmanship used to

shape the stone. The colour. White diamonds

are most common but as Jason-Paul Hirsh

of London jewellers Hirsh points out, other

natural colours such as pink, blue and yellow

are rarer and can be extremely valuable.

Clarity is the third C and refers to whether

there are blemishes within the stone. Fourth is

carat, the weight of the stone. One carat equals

0.2 grammes. While it is generally true that

the bigger the stone the higher the price, there

are certain key price points. A one-carat stoneis likely to cost signicantly more than one

weighing fractionally less than one-carat.

Hirsh goes on to say that diamonds are

not like any other commodity; the market

has characteristics that do not commend it

for investment. There is a massive stock

of diamonds that is not being released. In

other words it is being held to keep the

price inated. The control of the market is

largely in the hands of the Diamond Trading

Corporation, formerly De Beers, which has

agreements in place with producer countries

such as Russia, Canada and Australia. The

second reason is that diamonds have been

articially made since the 1960s and the

manufacturers are getting better at it. This

will also have an effect on the market that no

one can really predict. He adds however, that

those rarer pink and other natural coloured

diamonds can produce good investment

returns as supply cannot meet demand.

The investor still needs to square his or her

ethical concerns. A jeweller with a specialist,

ethical approach is Ingle & Rhode, based

in Londons West End. This firm uses fair

trade gold and buys its diamonds direct from

producers rather than through wholesalers.

David Rhode points out that the greatest

investment returns are likely to come from

diamonds that form part of highly collectable

pieces of jewellery. Such pieces might be

from a well-known designer such as Cartier

and may have been owned by celebrities in

the past. Such jewellery fetches high prices

at auction.

Investing in diamonds is highly subjective and

requires a lot of background knowledge and

good advice. Diamonds do not pay interest

and need to be securely stored and insured,

both of which cost money. But they can be

passed from generation to generation and

they are also easily transported. This explains

why refugees have often taken their stones

and jewellery with them and left their more

cumbersome possessions behind. Diamonds

have many appealing features and are an

asset class that many treasure, despite

the uncertainty of their origin and of the

investment returns they may produce.

world. If human rights, health and safety, the

environment and local political regimes are

issues we care about, then we would need to

examine our conscience before engaging with

any of these substances, that are woven into the

fabric of most lifestyles across the globe.

Investment

Diamonds remain objects of desire and perhaps

also worthwhile investments. As Michael

Wainwright one of the latest generation of

the family that owns Boodles, the 200 year-

old London based jeweller puts it, Items of

diamond set jewellery are beautiful things to

own and wear and may turn out to be not a bad

investment. He adds that no rate of return can

be placed upon such investments though the

better the colour and the quality the better they

fare. That is consistent with other collectable

investments such as art, wine and furniture.

There is evidence, published by Antwerp

diamond dealers Ajediam that over a period of

50 years the price of wholesale diamonds has

consistently risen and produced quite reasonable

Right: Signature Raindance

ring - this has gone into the V&A

permanent jewellery collection

as an example o leading British

contemporary jewellery design.

Below: Raindance celebratorycollection (to celebrate 10 years

o Raindance) coloured bracelet

(aquamarines, star sapphires, mint

green tourmalines and diamonds).

Both created by Boodles.

An extremely rare 14.23-carat ancy intense pinkdiamond (pictured) is to be auctioned at Christies in Hong

Kong on 29 November 2010.

With a pre-sale estimate o $14-$19 million, the aptly-

named Perect Pink is said to be a paragon o

perection in terms o colour, clarity and cut.

Fancy intense pink diamonds are both naturally and

commercially very rare. Only 18 diamonds over 10 carats

showing a distinct pure pink colour have ever appeared

or sale at auction.

O these, all exhibited a lighter shade and saturation than the

intense pink seen in the Perect Pink, according to Christies.

Gem connoisseurs have long considered pink diamonds

to be among the most beautiul o gemstones since they

were frst discovered in the ancient mines o India.

Fewer than 10% o pink diamonds weigh more than 0.20

carats. Larger varieties rarely come up or auction. According

to Christies, large polished pink diamonds o this description

are virtually unheard o.

While most pink diamonds exhibit a colour modifer such

as purple, orange or grey, the Perect Pink is said to show

absolutely no trace o a secondary colour.

In addition, says Christies, the classic rectangular shape a

cut generally reserved or white diamonds suggests no

additional acets were required to intensiy its tone.

At the end o 2009, Christies Hong Kong set a world auction

record when it sold a cushion-cut ancy vivid pink fve-carat

diamond or $10.7 million around $2.15 million per carat.

It became both the highest per-carat price ever paid or any

diamond or gemstone as well as the highest price paid or apink diamond.

The Perect Pink will be on view in Geneva, Taipei and Hong

Kong prior to the sale.

Pc Pk avc Pv

Geneva: 14-16 November, Four Seasons, Hotel des

Bergues. Taipei: 20-21 November, Fubon Lie Assurance

Building. Hong Kong: 25-29 November, Hong Kong

Convention & Exhibition Centre

For more inormation, visit www.christies.com

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Rare pink diamondexpected to attractrecord price at ChristiesBy Michele Martensen