A global product: diamonds

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Classe(s) : Tle ES - Tle L - Tle S | Thème(s) : The process of globalization
Corpus Corpus 1
A global product: diamonds




Commercial production of diamonds started in South Africa in 1870 and had expanded to four continents by the early 2000s. How has this symbol of luxury become a global product?

1 An elaborated product involving many countries

A A valuable product

 The diamond industry value chain consists of eight stages: exploration, mining, rough* diamond sales, cutting, polishing, polished diamond sales, jewellery manufacturing and finally retail* sales. The highest revenues are collected at either end of this value chain – at the beginning in diamond mining and at the end in retail.

 In 1900, rough diamonds were only mined in South Africa. During the 1960s, new mines began operating in Russia and Botswana. Today, the production is highly concentrated among a few places around the world – Africa, Russia, Australia and Canada.

B Asian competition

 For centuries, Antwerp was the traditional centre of diamond cutting and polishing. In the 1970s, Indian companies began cutting very small diamonds for export. Today, India has become the world’s largest diamond cutting centre because it costs more than $100 per carat to cut a diamond in Europe, compared with just $10 in India. Since 2010, Asian (China, Thailand and Sri Lanka) and African countries have been gaining market shares in cutting and polishing.

London and Antwerp remain the main centres for the purchase of rough diamonds. Most of the polished gem* sales also take place in Antwerp, but many companies open regional offices in India and China to be closer to manufacturers. At the top end of the retail market, diamond jewellery falls into two categories: branded and unbranded. The major brands* are American (Tiffany) or European (Bulgari).

2 Different actors to value the product

A A few major companies

 By the beginning of the 20th century, De Beers, a South African-based company, was the diamond powerhouse, accounting for 90% of the world’s rough diamond production and distribution.

 Today, 3 major groups with headquarters in England own more than 50% of the diamond production, estimated at $6.5 billion. Rio Tinto, BHP Billiton and Anglo-American are transnational corporations based on diversified mining resources.

 Some governments are important actors: the Russian government owns 51% of Alrosa, the main diamond company in the world.

B International organizations regulating the market

Under the auspices of the United Nations, the Kimberley process, established in 2002, ensures that only conflict-free diamonds can be traded on the market. The aim is to eliminate “blood diamonds”, mined in a war zone and sold to finance war efforts.

3 A worldwide market for different uses

A Jewellery

 Diamonds rank second in terms of value in the luxury goods market. The retail value of diamond jewellery today amounts to about $60 billion a year.

 The USA remains the largest market for diamond jewellery sales, but most of the new growth comes from China, India and the Persian Gulf states.

B Industry

 The second source of demand for diamonds comes from the industrial sector. They serve as an abrasive in many industries.

 They also play an important role in the production of construction and mining equipment, and in the aerospace industry.

  • rough = brut
  • retail = au détail
  • a gem = une pierre précieuse
  • a brand = une marque


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