Why do diamonds cost so much?
Diamonds prices are governed by international diamond trade prices (like international gold or coffee prices) based on demand and supply. Ultimately, the reason that diamonds are luxury goods and hence expensive is that their supply is limited to what is found in nature. Only 15% of all diamonds that are mined are suitable for use in jewellery, the rest are used in industry for cutting tools, for semiconductors,.. etc. On average 50% of the rough diamond is lost when cutting a polished gem hence, diamond prices increase rapidly with carat weight. In other words, one needs to have found a good quality 2 carat rough diamond in order to end up with a final 1 carat diamond.
Approximately 250 tons of ore must be mined and processed in order to produce a single, one-carat, polished, gem-quality diamond.
Millions of years in the making. What many people don’t know about diamonds is that they were formed under immense heat and pressure hundreds of miles below sea level. After 100 million years of formation, volcanic explosions forced them upward, exposing their natural beauty to the world. Diamonds were formed more than 70 million years ago when diamond-bearing ore was brought to the surface through volcanic eruption. After the magma cooled, it solidified into blue ground, or kimberlite, where the precious rough is still found today. Rated 10 on the Mohs scale of hardness, diamonds are the hardest substances on earth, but their appeal goes far beyond durability.
By contrast, cubic zirconia are relatively inexpensive as they are man-made and you can have as many as you like i.e. their supply is not limited.
For further information see Diamonds Glossary.
