A few months ago I had the pleasure of attending a tech/kiteboarding networking event called Mai Tai in Cabarete, Dominican Republic. If there were ever an event designed almost specifically to appeal to me, this is it: kiteboarding, technology, startups, add in a few dashes of Burning Man / Robot Heart parties, and you have “me” encapsulated.
I met a rather idealistic, optimistic, wild-eyed and fascinating young lady who, after telling her of my odd interest in diamonds, quickly interrupted me to tell me a bit about Diamond Foundry, confidently boisting of how they were going to blow the diamond industry apart, completely uninterested and even a bit flippantly dismissive in what I had to say about the DDI or ForeverMark or Botswana.
“There have already been a few companies attempting such with lab-made diamonds. They never can quite get the color up there, can they? Mostly H-L colored stones, and most of them max out at about a carat.” I retorted.
“No, but they’ve figured it out and they’re perfect diamonds now”
I told her about the DDI and the good work they do in the field, helping artisanal miners in Sierra Leone, Angola, DRC, Côte d’Ivoire how to do their risky work, yet also minimizing the chances of death by drowning, cave-ins, geological prospecting and rough diamond valuation, and mitigation of environmental impact.
“I wonder if that’s actually even a good thing”, she posited, as I about gasped. “The people of Sierra Leone need to all become programmers.”
I’ll leave judgement of the wisdom, feasibility and maturity of that statement to my readers. “How could it be that, with no other economic options available to them at all, saving them from drowning or death by cave-in is somehow a bad thing?” I thought.
This week, Diamond Foundry came out of stealth mode with their billionaire and celebrity backers, and I’m trying to gather my thoughts. The goods listed on the rather tiny inventory on their site seem near identical to what has been offered by Gemesis / Natural Grown Diamonds for years, with colors mostly in the H-L range, and most stones under a carat. Maybe the better goods are forthcoming; They certainly have the hype. Furthermore, the stones are apparently not graded by a trusted 3rd party, but by a GIA-trained gemologist. Not to infer that those stones are incorrectly graded, but is there not a conflict of interest when the grading is done by the same party as the one doing the selling?
DF has already announced that they won’t be competing on price. Rather, they may price their goods at higher prices than competitors. With colors mostly in the H-L range, they certainly aren’t competing in quality either, it seems. What then are they competing with?
Assurance of origin. Diamonds born in California, from renewable energy, in a sustainable process. A 100%, nerve-soothing guarantee.
How is this better than assurance of diamonds being “responsibly sourced” by ForeverMark? Does this not seek to capitalize off of a common thinking that all of “Africa” is straw huts and AK-47’s, unsuitable for “ethical” consumers? Does this not do the same that CanadaMark may do, with assurance of Canadian origin, and allowing consumers to draw whatever conclusions they like (no matter how correct) from there?
Undoubtedly, DF’s customers will pay the premium for equal or lesser goods, and walk away from the jewelry counter thinking they’ve done something “ethical” and “good”. But what if they pick DF because of their opinions on De Beers being the “monopoly” that they no longer are? What if they pick DF because of fears of “conflict diamonds” that mostly don’t exist any more, or disappearing Marange diamonds that probably can’t be found in US stores anyway? What would be the “ethics” of collapsing national economies and livelihoods because of mutable and incorrectly-placed stigma? Will DF make diamond customers out of people that otherwise wouldn’t be?
Or maybe they choose DF because they’ve read of issues I’ve discussed on this humble blog: they’ve seen an antagonistic Peter Meeus speech and want nothing to do with him or the Mugabes or the Dos Santos clan? What if they’ve read about the problems at the KP that won’t ever be addressed because all decisions require unanimity? What if they read about under-invoicing and transfer pricing and want nothing to do with that problem, either? Wouldn’t the diamond industry, with almost no good news coming all this year and a gloomy forecast, then outright deserve to be “disrupted”?