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A young couple passes an elderly one on a walking path, as an acoustic guitar plays the melody to “Stand By Me.”
The younger woman turns around and smiles. Her fiancé closes his hand around hers, which sparkles with a whopping diamond ring. They look at each other and smile again. “There are two things in the world that last longer than time,” says a voiceover. “Love is one of them. A diamond is forever.”
Just over a week ago, Canada’s Lucara Diamond Corp. announced that it had discovered an 1,111 carat gem-quality diamond in Botswana, the second-largest ever recovered. And like the ad says, the diamond had been there forever, or close to it, since natural diamonds are formed out of compressed carbon in the earth’s mantel over billions of years.
The diamond has sparked a frenzy of interest. Lucara has already rejected a $40 million offer for it, with chief executive William Lamb saying he’s holding out for more than $60 million.
The forces of diamond economics, however, can be fickle. Historic diamond discoveries are one thing. But the day-to-day operations in the industry have undergone huge changes over the past two decades.
For one thing, De Beers SA, the company that once dominated the industry – and made that ad featuring the happy engaged couple – has lost some of its lustre: In 2011, it settled an antitrust lawsuit that alleged it had fixed the price of diamonds in the U.S., agreeing to pay US$295 million to retailers and consumers.
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