When a Diamond is not Just a Diamond


The bloody, brutal war in Ukraine caused the US government and its allies to ban the import of Russian diamonds. The jewelry industry fully supports this measure, but the sanction levied by the United States is porous because most Russian diamond material is sent to India for cutting and India is very friendly with the Russians.

Once diamonds are cut and released into the market, it becomes rather impossible to know their geographical origin. One large trading platform is suggesting the following:. “Buyers wishing to avoid polished diamonds sourced from Russian rough are encouraged to request the following statement on all invoices: “The polished diamonds herein invoiced are cut from rough mined in [country].” Alternatively, for polished of unknown rough sources: “To the best of our knowledge, the polished diamonds herein invoiced do not originate from Russian rough diamonds exported after April 1, 2022.”

That puts the responsibility back onto the dealer at the time of transaction but it’s a weak solution requiring trust and transparency all the way back down the chain. It’s a real problem. I’m going to try and source Canadian diamonds until the industry gets a better handle on this.

I attended a seminar about this last week. According to a report written by Hans Merket for the International Peace Information Service, “Alrosa is the largest diamond producing company in the world by volume. In 2021 it sold 45.5 million carats of diamonds worth USD 4.2 billion. Alrosa accounts for over 90% of Russia’s diamond production. Russia is the world’s largest diamond producing country, accounting for approximately one third of global supply. Alrosa’s main mining operations are located in the Republic of Sakha (Yakutia) and the Arkhangelsk region in the northwestern part of Russia. In addition, Alrosa has important activities in Africa, especially in Angola, the world’s fourth largest producer…”

Alrosa has three major shareholders, two of which are the Russian government. The third share is thought to be owned by a mix of oligarchs and close associates of Vladimir Putin. Money from diamond sales finances military equipment and operations among other things so it’s easy to see why Alrosa should be punished. There is a suspicion that Alrosa’s mining extends to uranium for nuclear warheads.

The implications for the jewelry industry are complex because we are a tight, international weave with buying and trading platforms in far-flung places, including Belgium, Israel, the UAE, India and China. Historically, Belgium is a major diamond hub and India is using the opportunity to muscle into first place by assuring Russia of continued business dealings.

There is much more to this story which I’d be happy to discuss further with any of you on this list of beloved clients. We have shared many joyous occasions together through the jewelry you buy from me. You’ve trusted me to source gemstones from responsible mining communities and I have.

Now, 23 years later into my career, the stakes for geographical origin are higher than ever. The way forward is still opaque but the industry is working towards new accountability measures.

Sending best wishes for health and peace in your own homes.

Diana

An Alrosa diamond mine in Minry, Russia. Alexander Ryumin\TASS via Getty Images

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