Gem Diamonds has negotiated a sparkling price hike for its ‘fancy’ yellow diamonds with key customer Tiffany & Co.
Rough yellow diamonds; image by Gem Diamonds
The London-listed diamond mining company this week announced that it has struck a deal with international jewellery brand Tiffany & Co in which the parties agreed to a 25% price increase for their exclusive assortment of rare fancy yellow diamonds from Kimberley’s Ellendale mine in Western Australia.
The price increase comes into effect on 1 October 2010.
Diamonds come in all sorts of shades and colours, with ‘white’ diamonds being the mainstream choice, and the whiter they are the better.
Hence D,E,F colours (actually ‘colourless’ diamonds) are generally more expensive than G,H,I,J colours (‘near colourless’), which in turn are generally more expensive than K,L,M colours (‘faint’), and so on.
The relative expense of colourless diamonds is down to their scarcity in nature – they are simply more rare (although fashion/convention plays a part too, but this is still driven by the underlying scarcity).
But further down the colour spectrum of diamonds colours become rare again, and beyond a certain point – where a tint has become a distinctive colour – diamonds are described as having a ‘fancy colour’.
The rarest (and most expensive) of these natural colours are the reds, pinks, and blues.
But fancy yellows are also in demand and in recent years they have become more fashionable, often set alongside white diamonds which can accentuate their canary yellow colour, with ‘intense yellows’ and ‘vivid yellows’ being especially sought after.
And it’s this demand which is driving up the price of the best of the fancy yellow diamonds from the Ellendale mine in Australia, a mine which Gem Diamonds claims is the world’s single largest producer of rare fancy yellow diamonds.
As well as the underlying demand for such diamonds, there’s another good reason why Gem Diamonds can ask 25% more for these diamonds & the customer is prepared to pay more – that reason is the customer, and the needs of this particular customer.
Tiffany & Co needs no introduction: it’s one of the world’s great diamond & jewellery brands, and as such it can command premium prices for its beautifully-designed and manufactured jewellery product.
But it’s likely that Tiffany are also willing to pay more for these diamonds because of their impeccable source in a ‘first world’ country where consumers will have confidence that first world standards in place in terms of social, environmental, and ethical practices.
Tiffany & Co understands the importance of responsible sourcing (they refer pointedly to ‘Tiffany’s Higher Standards‘) and they know this is an issue which will become increasingly important to their customers around the world: if it’s not important to them already then Tiffany know that it will be.
So sourcing diamonds in this way is a smart move for Tiffany, and if they have to pay a bit more to secure long-term diamond production from a specialist source like the Ellendale mine in Australia, then so be it.
And of course every rare diamond which Tiffany can secure for itself is a diamond denied to its competition…
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