Market NewsCommentA Fake Jerome and real diamonds?

A Fake Jerome and real diamonds?

Mining Weekly reports that the Diamond Producers Association is lobbying for its advertising fund to be raised tenfold from $6 million to $60 million.  

The article refers to the fact that overtime De Beers had cut its marketing budget in half to $100 million before effectively stopping generic advertising, all one of the disastrous consequences of their Supplier of Choice strategy in 2001.

My understanding is that De Beers no longer owns the ‘Diamonds are Forever’ slogan, which they transferred into De Beers LV or the jewellery business, instead we have got the Coke muse, about ‘Real’… who wants dreams to be real?

In the FT it has been reported that Sotheby’s is suing to reclaim the proceeds of the sale for a painting of Saint Jerome that has subsequently proved to be a fraud.

Lastly, I read this headline in Vogue, “This is your new source for conflict free ethical (and gorgeous) engagement rings”.

It does not take a genius to guess that they are referring to Lab grown diamonds, or as the trade likes to use the pejorative term, synthetic diamonds. 

To me these three bits of news or information, which I presume bypass the fashion for fake information, though it is difficult to comprehend how anyone thinks raising advertising spend to $60 million, given the absence of coordinated generic advertising for so long, can make much difference.

But, I suppose that at least it presumably would have more of an impact than the current budget of $6 million, though tens times of nothing still makes nothing; and I for one will not be holding my breath.

Regarding Sotheby’s problem, it does raise a smile that all these experts can be so wrong.

I am surprised that their assessors do not go and get jobs as polling pundits. 

A ‘synthetic’ diamond is not a fake, like the above-mentioned painting of St Jerome. 

These as I would refer to, cultured diamonds, are 100% diamond but happen not to be natural.

The industry has made such a complete hash handling this issue, as always hiding behind obfuscation and bullying tactics when they went hell bent to prevent the use of the word ‘cultured’, and now it is seriously turning around to bite them.

Since the real (forgive the pun) possibility of cultured diamonds being produced economically in volume started to become apparent, the industry has reacted with a completely closed mind.  

As Lawrence Krauss in ‘A universe from nothing’, subtitled, ‘why there is something rather than nothing’, says, ‘A truly open mind means forcing our imaginations to conform to the evidence of reality, and not vice versa, whether or not we like the implications.’

Our industry’s mind is and has been so firmly shut or eschewed reality for such a long time on a variety of issues, to make me wonder if it can ever be opened. 

Even a few years ago the idea of say the high end watch industry using cultured was unthinkable, that is unthinkable to the watch industry, and, that is no longer the case.  The attitude is much more of ‘Why not?’ or even ‘Of course, in time…’

Diamond jewellery and simply jewellery has to face intense competition from the world of ‘gadgets’ and also the world of expanding ‘experiences’.

You can hardly call wondering down Hatton Garden looking at diamonds being displayed with less empathy than the cabbages in Waitrose, an emotional experience, or certainly not a good one.

As is so often the case, the consequences of actions or inactions can take much longer than anticipated to work through the system, but there is often an unpleasant rapidity in those unwanted consequences when finally they arrive.

As I argued years ago, cultured diamonds could have been a means of growing the market, instead it has become a means, for some in the trade, for cheating, not only selling cultured as natural in polished but also in rough.

The good news is that the woeful performance of polished diamonds is at least forcing some people to think, but thinking in the same old box is not going to do much good.

Nothing is being aggressively promoted by the industry about what are the enormous benefits for the vast majority of natural diamond mining, the jobs and wealth it creates in often very impoverished areas of the world.

These throw away lines about the mining foot print used to mislead and denigrate the natural product, such as ‘draining lakes’ in the Vogue article, are not challenged and put into a meaningful context. 

If anyone has flown over the North West Territories they might have observed that the one thing that there is absolutely no shortage in any sense of the word are lakes, hundreds of thousands of them as far as the eye can see.

If De Beers was spending $200 million at the turn of the millennium how much does anyone think should be spent nowadays to grab the attention of the oft quoted millennials who are being lured away.

Who knows, but as sure as hell the figure is not $60 million even if spent properly and every year, these millennials are not that cheap, and as in everything it is never just a question of money. 

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