My Secret Diamond MineJuly 01, 10
Conventional wisdom holds that we are suffering from a shortage in rough diamonds. Rough traders in
In many ways, it's hiding in plain sight. Proof of its existence is that the country where this mine exists, exports more rough than it imports. Oddly, while many of us in the industry have visited this country, none of us visited the mine.
Here are some more details, for the benefit of the entire diamond industry: The goods are low cost, and the mine is not very rich, but cost of production is close to zero. The profit margins should be huge. According to the latest figures supplied by that country's government, in the first four months of 2010, net exports totaled 171,468 carats, at an average value of about $278 per carat – a small stream of $47.7 million worth of goods.
In 2009, the country exported, on average, a net of 19,214.40 carats of rough every month at an average value of $310.58 p/c – nearly $6 million worth of rough every month, about $72 million for the year.
According to (yet to be published) Kimberley Process documents,
One last fact about the country: Its KP certification policies are so lax that NGOs around the world are surely losing sleep over this rogue country. In fact, one must wonder how KP is letting this happen right under their nose, without sending a review mission to investigate this covert supply to the market.
Earlier this month, I took four flights over this country, and searched intently for this mine. It was hidden well and we were unable to spot it from above. I do, however, trust the strict documentation as proof to the mine's existence – how else could a country export more than it imports?
This clandestine mine lives and breaths not in
The existence of the mine is not a bona fide fact, but a conclusion. How else can the
Maybe the answer is not a diamond mine or existing stocks. At one of the recent KP/Zimbabwe sessions,
The sad conclusion is that, based on official Department of Commerce and KP figures, many goods must be smuggled into the
Basically, anyone can bring goods into the
If we don't find that elusive mine in the U.S., maybe we should look for ways to close a loophole in our most important consumer market and save us from the embarrassment that comes from a front page article in the New York Times or the Wall Street Journal.