What's Happening?
The diamond market is facing a prolonged downturn, with demand affected by global economic uncertainty and the rise of lab-grown stones. Oded Mansori, co-founder of Belgian gem trader HB Antwerp, has criticized the current diamond selling processes, which rely on tenders and auctions. These methods are seen as opaque and inefficient, resembling a casino, and leave producers vulnerable during periods of softened demand. Mansori advocates for a profit-sharing model tied to the polished value of diamonds, which could increase producer revenues by up to 40%.
Why It's Important?
The inefficiencies in diamond selling processes have significant implications for producer countries and mining companies. As demand for natural diamonds declines, producers face financial challenges, leading to layoffs and reduced revenues. Revamping the selling processes could provide more stability and profitability for producers, helping them navigate the current market crisis. The shift towards more transparent and value-based selling models could reshape the diamond industry and improve economic outcomes for stakeholders.
What's Next?
Industry leaders and stakeholders may explore alternative selling models to enhance transparency and efficiency. The adoption of profit-sharing models could gain traction as producers seek to maximize revenues and adapt to changing market conditions. Collaboration between traders and mining companies may be necessary to implement new strategies and address the challenges posed by the downturn.
