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Once symbols of wealth, diamonds are now--as this cheery wrap-up makes plain--prime investments in their own right. But to keep the prices of the stones going up-up-up, they must be kept in short supply. Enter DeBeers Consolidated Mines, Ltd., of South Africa--a monopoly that makes OPEC look like a kiddie cartel. Here, Green (The World of Gold, etc.) has obviously done some digging. Though its own fields account for only 15 percent of the world output, he notes, DeBeers exercises marketing control over approximately 85 percent of the total supply of rough, or uncut, stones--via purchasing arrangements with diamond-producing countries as distant (and dissimilar) as Botswana and the USSR. The unprocessed gems are shipped to London where a wholly-owned subsidiary, the Central Selling Organization, takes over; every five weeks or so, the CSO holds by-invitation-only ""sights,"" or sales, for a select group of fewer than 300 dealers based in Antwerp, Bombay, Tel Aviv, New York, and other diamond centers. DeBeers has pledged itself to maintain and increase the price of diamonds to keep quotes ahead of currency devaluations as well as inflation. True scarcity furthers this policy. As Green points out, only 10 million carats are mined annually, and less than half that amount (around one ton) winds up in jewelry stores, owing to losses during cutting and polishing. DeBeers also takes pains to promote its wares, figuring that ""diamonds in jewelry are a genuine long-term offtake from the market."" (On the other hand, the recent investment vogue for loose stones is viewed as ""a dangerous overhang that might one day be dumped back in the market's laps at short notice."") For a zesty close-up of the trade, see Murray Schumach's The Diamond People (p. 126); for the big picture, this is informed, unawed, and often amusing.

Pub Date: April 27th, 1981
Publisher: Morrow