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Romancing the stone

Observations on South Africa

What’s in a name? Well, £6.2m if the sale price of a rare blue diamond sold at auction on 12 May at Sotheby’s Geneva is anything to go by. The stone, about the size of a penny, internally flawless and cut with a unique 58 facets, was the record-breaking centrepiece of a 370-strong lot of “magnificent jewels”. The lucky (unidentified) buyer gets to name the gem. I hope his wife’s name is Gertrude.

Those in the know think £6.2m is a small price to pay for the privilege. Before its sale the stone was shown off in New York, Hong Kong and London to those hungry for some sparkle amid the gloom. “In the past, in times of crisis, jewellery has been seen as attractive to that type of buyer,” David Bennett, the chairman of jewellery at Sotheby’s, told me before the sale. “It will most likely be bought by collectors, by admirers of earth’s treasures, people who want something nobody else has. It’s a really magical stone.”

Admittedly, it does look nice. Light issues from its 7.03 carat interior, shimmering as I hover to take a photo amid the big lenses at Sotheby’s. The joys of light refraction aside, I don’t know if it is obviously worth the £5.8m, that the mining company Petra Diamonds, the world’s largest independent diamond producer, wanted for it, after digging it out of South Africa’s Cullinan mine.

It’s all a demonstration of the odd things on which we put a value. Certainly, blue gems are rare. But that wasn’t enough for Evalyn Walsh McLean, a rich US socialite who back in 1910 bought the 45.52-carat Hope Diamond, the most famous of the blues. No, she needed mystique, so the wily diamond sellers – Pierre Cartier among them – cooked up a legend for her, and suddenly the high price became agreeable. The Hope Diamond is thus rumoured to have been stolen from a Hindu idol in the 17th century, later worn by Marie Antoinette, stolen by George IV’s lover, and to curse all who touch it. And on such mystique hangs hundreds of thousands of jobs worldwide.

The September crash came just ahead of what is traditionally diamond-buying season: most rocks are bought as presents in the last quarter of the year. Demand tumbled by 30 per cent and tens of thousands of Africans lost their jobs as diamond mines stalled or closed down in Botswana and Angola, and exploration slowed in Sierra Leone and elsewhere. Hundreds of thousands of Indian diamond polishers were laid off, and the global diamond giant de Beers sacked a quarter of its UK workforce. It even added to its slogan, “A diamond is for ever”, more austere phrases: “Fewer, better things,” “Here’s to less”.

Global diamond production this year is set to be less than the usual 160 million carats. “We’ll be lucky to get to 90 million,” says Adonis Pouroulis, chairman of Petra.

Despite the slowdown, the company is not giving up. Instead, Pouroulis says, it’s expanding and looking east to China and India, whose wealthy don’t yet realise that they will soon have to spend three months’ wages on a ring for their wives-to-be if they are to be considered half-decent husband material. Petra says about three million people have historically been cut out of this market. Asia is but a marketing campaign away.

This article first appeared in the 18 May 2009 issue of the New Statesman, Rock bottom