There are three major diamond trading markets in the world today. These are Antwerp, Tel Aviv and Dubai. Manufacturing centres or more specialised markets include Mumbai, Hong Kong, Shanghai, New York, Johannesburg but according the industry figures, 84% of all rough trading and 50% of all polished trading is conducted through Antwerp.

Simplistically, rough diamonds are mined all around the globe and then sold to manufacturers to polish. The polished is then put in to jewellery and sold.

The diamond market is a very dynamic market and mostly interdependent. Many deals conducted in the industry are done so on the shake of a hand (mazal) to seal a deal and an understanding and good faith that the buyer will pay. Many outside the industry view diamonds as a commodity, but it doesn’t behave as one.

Rough diamonds are very subjective in value and as such, it becomes a challenge to truly understand the intrinsic value of a rough diamond as it is different for each cutter. Every manufacturer will have his own demand and gaps in his inventories and as such will try to fill these gaps first whilst also trying to maximise the potential of each rough gem.

Due to the challenges of subjective valuations, different miners and diggers have adopted different approaches to sell their rough diamond productions. The larger and more dominant companies use a guaranteed supply model to a set customer base and test prices through market tenders or auctions from time to time. Smaller miners or diggers prefer to sell on tender or auction in the market place or occasionally selling directly to a known buyer, depending on cash flow positions.

Antwerp is one of the major trading markets and is located in the Flanders region of Belgium, 55km north of the capital Brussels. It has been at the centre of the diamond industry for the last 500 years as it was the major cutting and polishing centre for centuries.

These days only a few specialised cutters remain, but the city has the infrastructure for much of the rough trade today. With over 1500 registered diamond companies in Antwerp it has been part of the World Federation of Diamond Bourses (WFDB) and boasts four of the major diamond exchanges around the globe (2 rough exchanges and 2 polished). Only members are allowed to trade in these exchanges and a strict criterion applies to all members. It is the only centre around the world to have permanent representation from all the big global mining companies, De Beers, Alrosa, Rio Tinto, Dominion, Grib and Gem diamonds all have offices there.

Today, the diamond exchange consists of 5 interconnecting buildings and is considered as the most technologically advanced bourse around the world. With over 3000 companies registered across all buildings, there is a niche market for bespoke polishing and polished trading. With exports more than $4billion in 2017 the contribution to the economy of Israel can not be understated.

Dubai is the youngest of all the major diamond trading centres having only been established this millennium. The attraction of a centre in a tax-free zone coupled with unclear tax structures in Belgium, allowed for many companies to re-structure themselves and have Dubai as a base whilst maintaining their Antwerp companies. Whilst there are many sales are conducted in Dubai through existing sources and customers, there is little inter-company trading activity, as there in Antwerp or Tel Aviv.

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