Sierra Leone: Jewelers Going Straight to Miners as Diamonds Wane: Commodities

Dec 18, 2014 | Thomas Biesheuvel, Bloomberg
View Original

Jewelers who fill up Christmas stockings with diamonds are increasingly doing so by investing in or securing supply deals directly from individual mines, avoiding the industry’s middlemen.

With most of the diamonds near the Earth’s surface having already been dug up, and few new mines sprouting, Tiffany & Co. (TIF) and Chow Tai Fook Jewellery Group Ltd. (1929) are sharing an ever smaller pie. That’s driving them to be more creative in reaching out to mine operators that range from the Canadian Arctic to the Kalahari Desert.

In the past, big retailers were largely forced to depend on Anglo American Plc (AAL)’s De Beers unit, which at one point held a virtual monopoly on the diamond trade and still handles 37 percent of all rough stones. Now, Hong Kong-based Chow Tai Fook, the world’s largest listed jeweler, is following an early lead by New York-based Tiffany in exploring investments in individual mines in Canada and elsewhere.