The diamond pipeline is the chain of businesses that moves a diamond from the ground to a jewelry store. It runs through mining, rough sorting and sales, cutting and polishing, polished trading, jewelry manufacturing and retail. A single stone can pass through several countries and many owners along the way. Each stage adds cost, and each has its own trading customs.
Stage one: mining
Diamonds come from kimberlite and lamproite pipes, alluvial gravels and marine deposits off the coast of southern Africa. Mining companies range from large groups running open pits and underground mines to small artisanal diggers working riverbeds. The diamond mining page covers the methods, and diamond mines of the world covers the major deposits.
After recovery, rough diamonds are cleaned and graded at the mine or at a central sorting facility. Only part of mined production is gem quality. The rest goes to industrial uses such as drilling and grinding, though synthetic diamond now supplies most industrial demand.
Stage two: sorting and valuing rough
Rough diamonds are sorted into thousands of categories by size, shape, color and quality. Sorting decides how a parcel will be priced and who will want it. A cutter in Surat may want small, low-color rough suited to quick cutting, while a large-stone manufacturer in Antwerp wants big, clean crystals.
Some producer countries require valuation by a government office before export, to set royalties and taxes. Botswana, Namibia and others built local sorting and valuing facilities as part of agreements with mining companies.
Stage three: rough sales
Rough reaches the market through a few main channels.
Sights
De Beers sells much of its rough through sights, a system that dates to the 1930s. Approved buyers, long called sightholders, receive boxes of rough at set intervals during the year. The system used to be largely take-it-or-leave-it. Since the 2000s it has become more flexible, with buyers stating their needs in advance. De Beers moved its sorting and sales operation from London to Gaborone, Botswana, in the early 2010s.
Tenders and auctions
Many producers sell rough by tender, a sealed-bid sale where buyers inspect parcels and submit offers. The highest bid wins each lot. Large single stones often go to special tenders. Online auctions have also become common for rough.
Contracts and open market
Some producers sell under longer contracts to set buyers. A dealer market lets traders resell rough after the first sale, splitting and recombining parcels to suit cutters.
Stage four: cutting and polishing
Cutters turn rough into polished stones by planning, sawing, bruting and polishing (see how diamonds are cut). The trade has a few main cutting centers, each with its own focus.
| Center | Typical work |
|---|---|
| Surat and Mumbai, India | Most small and medium stones; large-scale factories |
| Antwerp, Belgium | Large and high-value stones; rough and polished trading |
| Tel Aviv (Ramat Gan), Israel | Medium to large stones; trading |
| New York, United States | Large and important stones; trading hub for the US market |
| China, Thailand and others | Mixed production, often for regional markets |
India became the dominant cutting country from the 1970s onward, and Surat in Gujarat grew into the largest center by volume. The Gujarat and Surat diamond cutting page covers that growth. Antwerp's long role is told on the Antwerp as a cutting center page.
Manufacturers often send finished stones to grading labs at this stage. A report from a well-known lab makes a stone easier to trade, especially above about half a carat. See diamond grading labs.
Stage five: polished trading
Polished diamonds are traded through dealer networks, bourses and online platforms. A bourse is a members-only trading floor with its own rules, where deals are closed by handshake and a traditional phrase. The Antwerp diamond bourses page describes the customs. Bourses also exist in Ramat Gan, Mumbai, New York, Dubai and other cities, linked through the World Federation of Diamond Bourses.
Dealers often price polished stones against published price lists and negotiate discounts. See how diamonds are priced. Stones may change hands several times before reaching a jewelry maker. Dealers also lend stones "on memo," letting a buyer hold a stone for a period to show clients and return it unsold.
Stage six: jewelry manufacturing
Jewelry manufacturers buy polished stones and set them into rings, earrings, pendants and bracelets. Large manufacturers mass-produce designs using casting and machine setting. Small workshops make custom and high-end pieces by hand. The how jewelry is made page covers the processes.
Stage seven: retail
Retail sales happen in independent jewelers, chain stores, department stores, luxury brands and online sellers. Some retailers buy stones outright. Others list stones held by suppliers and order them only after a customer buys. Retail adds the largest share of markup in the pipeline, covering stores, staff, marketing, insurance and inventory.
Controls on the pipeline
The Kimberley Process, launched in 2003, requires certificates for rough diamond shipments between member countries to keep conflict diamonds out of legitimate trade. It covers rough only, not polished stones or jewelry. Industry groups have also published codes of conduct covering labor, environment and disclosure.
Disclosure rules apply at every stage. Treatments must be disclosed, and lab-grown stones must be clearly identified. The US Federal Trade Commission's Jewelry Guides, revised in 2018, set rules for describing lab-grown diamonds in US sales. See lab-grown diamonds.
Lab-grown diamonds in the pipeline
Lab-grown diamonds follow a shorter route. Growers produce rough in reactors, mainly in China and India by the 2020s, and many growers either cut their own rough or sell directly to cutters in India. The stones then join the same polished trading, grading, manufacturing and retail channels as natural diamonds, with separate reports and disclosure.
Frequently asked questions
What is a diamond sightholder?
A sightholder is a company approved to buy rough diamonds directly from De Beers at its regular sales, called sights.
Where are most diamonds cut?
Since the late 20th century, India, especially Surat, has cut most of the world's diamonds by number of stones. Antwerp, Tel Aviv and New York handle more large and high-value stones.
How many times does a diamond change hands?
It varies. A stone can pass through a miner, rough dealer, cutter, one or more polished dealers, a jewelry maker and a retailer before reaching a buyer.
Does the Kimberley Process cover polished diamonds?
No. It certifies rough diamond shipments between member countries. Polished stones and finished jewelry fall outside its certificates.