INVESTMENTS
THE WORLDS FINEST DIAMONDS LONDON DIAMOND INVESTMENTS
“There hasn’t been any new big mines discovered during the past 20 years and the current mines are all ageing. So when we look at the next 10 years, there’s no doubt demand is going to outweigh supply” Varda Shine, CEO of Diamond Trading Company
02
WWW.LDI.DIAMONDS
Contents Overview
05
Loose Diamonds
06
Rough Diamonds
09
Grading 17
LDI DIAMOND GUIDE
The LDI Difference
23
LDI’s Diamond Process
24
A Final Note
29
Contact Us
30
03
“It is not the strongest or the most intelligent who will survive but those who can best manage change! � Charles Dawin 04
WWW.LDI.DIAMONDS
OVERVIEW LDIs focus is to provide diamonds to end user via its easy to use online sales platform. All of LDIs diamonds are high in quality, certificated by GIA & large percentages cheaper than found in diamond retailers. The business model is to simplify the diamond sales pipeline from mine to consumer - eliminating profits added on by re-sellers, cutters, brokers and retailers amounting to billions in profit each year.
In this Diamond Guide we aim to provide you with a basic understanding on diamond grading & how to value diamonds. If you have any questions that go unanswered don’t hesitate to contact us.
Today, investors are turning to diamonds for their long-term value, as well as their aesthetic qualities. Returns for the gems beat those of equities for much of the past 15 years” Financial Times
LDI’s initial business model was to offer clients only diamonds for investment purposes with storage solutions. After clients requesting if they could take delivery of our diamonds to use in jewellery due to the low prices, we soon adjusted and started offering loose cut diamonds on our sales platform.
LDI DIAMOND GUIDE
05
LOOSE DIAMONDS Our loose diamonds are listed on the online sales platform and are readily available to browse through. Just click on “LOOSE DIAMONDS’.
storage facilities for auditing and then finally entered
Purchasing one of our loose cut diamonds is simple, the
LDI’s focus is to offer only the finest quality diamonds.
online store works like most other online stores.
Each and every diamond we stock must fit a strict
onto our sales platform ready to view, bypassing the lengthy diamond sales pipeline and eliminating high end diamond retailers profitable mark ups.
criteria which suits high quality jewellery or as a physical store or wealth.
LDI’s diamonds are sourced ethically with KPCS (Kimberley Process Certification Scheme) certificates, cut & polished, graded by GIA, sent to our secure
06
BROWSE
PURCHASE
DELIVERY
Browse our online inventory
Complete your purchase
After payment is made,
of GIA graded polished
on our quick and easy
Your diamond(s) will be
diamonds
online platform
delivered to you promptly
WWW.LDI.DIAMONDS
LDI DIAMOND GUIDE
07
08
WWW.LDI.DIAMONDS
ROUGH DIAMONDS Rough ‘investment grade’ diamonds can also be purchased online through LDI sales platform. Just click on the tab ‘ROUGH’. Our purchasing & grading team work globally to source diamonds at the earliest stage right between exploration / mining & diamond cutting ensuring true trade prices. LDI combines its close to source supply of rough diamonds, innovative diamond scanning software & VAT free storage creating a competitive priced, highly stable & condensed store of wealth.
diamond which can be achieved from the rough. On completing your purchase, please note you will only be able to select the store and insure option, subject to availability this will be available cost free for 12 months. The key is in the name, rough investment diamonds, our storage option will be VAT free insuring your store of wealth is maximised. During that 12 month period all stones can be managed by logging into your account. If you wish to physically own a rough diamond, due to the nature of logistics of rough diamonds they can only
Each rough diamond will be accompanied with a Sarine diamond scan showing the exact quality of
be collected in person on presenting your identification after all relevant duties and taxes are paid
INVEST
CREATE ACCOUNT
CHOOSE
To view our rough stock
Add the ideal diamonds
All of our rough diamonds
create a free account
to your bag
come with 12 months free
which takes just minutes
Further on in the guide you will read our opinion on why diamonds make the ideal medium to long term safe investment. If you choose to take advantage of our store and insure option whether your storing polished or rough diamonds, you
LDI DIAMOND GUIDE
STORE & INSURE
‘store & insure’
can request at any time a current market value, request to take delivery, or request to re-list your diamond back onto our online platform to exit your asset.
09
UNDERSTANDING DIAMONDS The rarity and exceptional character of diamonds - how
its hiding place by nature or by man. It’s then sorted
they are formed, their physical properties, their age,
by the big diamond companies and mines, sold onto
beauty and scarcity - have always inspired fascination
rough diamond dealers, then will be cleaved, cut and
and evoked power.
polished. Not even at this stage will anyone outside of the diamond industry be able to get his or her hands
An extremely stable price compared to currency, other
on this valuable asset. Once the rough diamond is then
investments and protected from the manipulations of
turned into its polished form, it will pass through various
the financial system, diamonds are an ideal medium to
dealers and brokers around the globe before reaching
long-term safe investment.
the retailer where it will be offered to the general public for sale.
A diamond has a long journey before reaching a jewellers display case. Most are between 1 billion and
According to the Bain & Co Report - The Global
3.5 billion years old. It forms deep in the earth - at
Diamond Industry along this journey $15 billion of
depths of 150 to 250 kilometres - under extreme heat
rough diamonds becomes $24 billion of polished
and pressure. It’s then ejected upwards until it arrives
diamonds, which then goes into diamond jewellery with
at or near the earth’s surface. It’s then forced from
a retail value of $71 billion.
DIAMOND SUPPLY CHAIN
££
£££
Exploration
Rough Diamond
Cutting &
Polished Diamond
Diamond
& Mining
Sales
Polishing
Brokers & Re-Sellers
Retail Sales
The Reach of LDI
10
WWW.LDI.DIAMONDS
LDI aims to give our clients a chance to fit into the
Mines Limited 22 years later in 1888. By 1900 De
supply chain never before offered to people outside
Beers through its mines in South Africa controlled an
the diamond industry - making our mission of supplying
estimated 90 percent of the worlds production of rough
below trade price diamonds to our clients.
diamonds. The story of Cecil Rhodes really is one worth reading.
The name diamond derived from the ancient Greek ‘adámas’ - ‘proper”. “unaltered’ or ‘unbreakable’.
Not all diamonds mined are fit for jewellery or
Diamonds are thought to have been first recognised
investment purposes. Around only 20% of diamonds
and mined in India, where significant alluvial deposits
mined are used for jewellery, the rest is not suitable
of the stone could be found many centuries ago along
or just too low in quality and are used for industrial
various rivers. Diamonds have been known in India for
purposes. Out of that top 20% only the top 2-3%
at least 3,000 years but most likely 6,000 years. India is
is suitable for investment / high quality jewellery
where the worlds love of diamonds started, they were
purposes.
gathered from rivers and streams, the yielded limited
In the first century AD, the Roman naturalist wealthy classes. Gradually, though, this changed. India’s Pliny stated: “Diamond is the most valuable, not only of precious stones, but of all things in this diamonds found their way - along with other exotic merchandise - to Western Europe in the caravans that’s world” quantities suited the equally limited market: India’s very
traveled to Venice’s medieval markets. By the 1400’s, diamonds were becoming fashionable accessories for Europe’s elite. The story of the modern diamond market really begins on the African continent, with the 1866 discovery of diamonds in Kimberley, South Africa. Entrepreneur Cecil Rhodes established De Beers Consolidated
LDI DIAMOND GUIDE
11
12
WWW.LDI.DIAMONDS
DIAMONDS AS AN INVESTMENT Diamonds have been internationally recognised as a method of payment for thousands of years and
5 REASONS WHY DIAMONDS MAKE A GREAT INVESTMENT
are becoming an increasingly popular alternative investment. Savvy investors in the past have not
Portability Diamonds are easily portable unlike most
regarded diamonds as a sole investment but as an add
other assets
on to their portfolio to hedge against political turmoil and the ills of inflation.
Durability Diamond is the hardest substance on the Mohs Hardness Scale an asset that truly passes the test
THE THREE FACTORS EFFECT DIAMOND PRICES:
of time - physically & economically
1. Diamond quality features
of your hand
2. Global economics 3. Supply demand The power of diamonds - In Belgium, Europe, sits Antwerp’s diamond centre which is a modest square mile. In this square miles alone over $54 billion of diamonds turnover annually. Christies auction house recently auctioned 225 lots of diamond jewellery which fetched $144.9 million, with one article alone fetching
Dense value - Millions in value can be held in the palm
Worldwide currency Diamonds have been a source of wealth accepted around the globe for thousands of years Off grid - Diamonds are one of the rare assets that are physical and fully in your control, no third party fees or lead times. An asset effected minimally by inflations or recessions.
$33.7 million.
LDI DIAMOND GUIDE
13
Diamond investment doesn’t suit everyone. It should be
De Beers reported new explorations and finds - if
noted that diamonds are not considered a short term
any - will occur in tougher places that involve political
trading vehicle.
& physical difficulty, which are complex and costly to
As with any other investment, money can be lost as well
operate meaning increased diamond prices.
as gained. Looking back on historical diamond prices it can be clearly established sharp price changes are highly The graph below published by Bain & Co shows several unlikely making diamonds well suited for a highly stable mines that are expected to be depleted, causing a medium to long term vehicle.
decline in rough diamond supply.
De Beers reported global consumer demand for
The demand for investment diamonds is due to their
diamond jewellery grew to an all-time record of $82
high value per unit weight, which makes them easy to
billion in 2017 amid a strong US market and a recovery
store and transport. A high grade diamond weighing
in greater China.
as little as 5 grams could be worth around the same as over 150 kilo bars of gold or well over 10,000 kilo bars
As the known global diamond reserves continue to
of silver. This extremely condensed value and portability
be mined and depleted while demand continues’ to
does bestow diamonds as a form of emergency funding.
increase, a demand-supply gap is expected to develop in
People and populations displaced by war or extreme
the coming years meaning a steady increase in diamond
upheaval have used this portable asset successfully.
prices.
Forecast of depleting mines 35
Millions of carats
30 25 20 15 10
Victor
De Beers
Botuobinskaya
ALROSA
Argyle
Rio Tinto
Voorspoed
De Beers
Koffiefontein
Petra
Diavik
Rio Tinto
Sable, Pigeon , Lynx,
Dominion Diamond
Misery and Koala (Ekati)
5 0
2016
2017
Not to scale
14
2018
2019
2020
2021
2022
2023
2024
2025
Year
WWW.LDI.DIAMONDS
This graph also published by Bain & Co shows a steady forecasted rise in demand. Diamond jewellery markets in the US, China and India should remain major drivers of the rough diamond demand. Diamond jewelry demand, 5 billion 2010-2030 optimistic scenario
Forcast
Diamond jewelry demand, 5 billion 2010-2030 base scenario CAGE (2018-2030) -4%
100 80 60
100 Other -4% India -7% China -4%
40 20
Forcast
US
0 2010 2014 2018 2022 2026 2030
-4%
CAGE (2018-2030) -1%
Base scenario is based on conservative assumptions on the regions macroeconomic indicators
80 Other -1% 60 40
India -3% China -2%
20
US
-1%
0 2010 2014 2018 2022 2026 2030
“People around the world are spending more on diamond jewellery than ever before� De Beers CEO Bruce Cleaver
LDI DIAMOND GUIDE
15
16
WWW.LDI.DIAMONDS
GRADING As diamond sales and diamond investment grew, there
could be communicated in a universal language, and
needed to be a structured grading system put into place. diamond customers could now know exactly what they The Gemological Institute Of America (GIA) introduced
were about to purchase. Why Is grading so important?
the International Diamond Grading System and the 4
Without having some idea on a diamonds quality, it
C’s. The 4 C’s - Carat, Colour, Clarity & Cut - all have an
is impossible to price. We will go over how to value
effect on the diamond’s price.
a diamond in the next chapter but understanding a diamond’s quality must be first established before any
Today, the 4Cs of Diamond Quality is the universal
pricing can be done. You can determine a diamonds
method for assessing the quality of any diamond,
grade by an accompanying diamond certificate or by
anywhere in the world. The creation of the Diamond
leveraging an experienced & trusted diamond traders
4Cs meant two very important things: diamond quality
knowledge.
CARAT A diamond carat (also referred to as ‘ct’) weight is the
Keeping the cut, clarity and colour consistent, the higher
measurement of how much a diamond weighs. A metric
the carat weight, the higher will be the value of the
‘carat’ is defined as 200 milligrams or 0.2 grams.
diamond.
0.50 ct.
0.75 ct.
1.00 ct.
2.00 ct.
5.00 ct.
*Not to scale
COLOUR Colours range from D - Z, D being colourless or the
Colours below Z are classed as Fancy Colours and
rarest colour. The colours draw more yellow as they go
are far less common. These fancy colours follow less
down the scale towards Z.
structure and are therefore much more difficult to accurately price.
D D
E
H F
COLOURLESS
LDI DIAMOND GUIDE
G
H
L I
J
NEAR COLOURLESS
K
L FAINT YELLOW
P M
Z
N O P Q R S T U VWX Y Z VERY LIGHT YELLOW
LIGHT YELLOW
17
GRADING CLARITY Most diamonds have a variety of internal characteristics Clarity grades, in order from highest to lowest: called ‘inclusions’ and external characteristics called
(FL) Flawless
‘blemishes.’
(IF) Internally flawless Evaluating diamond clarity involves determining the number, size, relief, nature, and position of these characteristics, as well as how these affect the overall appearance of the stone. While no diamond is perfectly pure, the closer it comes, the higher its value.
(VVS1) Very, very slightly included / (VVS2) Very, very slightly included (VS1) Very slightly included / (VS2) Very slightly included (SI1) Slightly included / (SI2) Slightly included (I1) Included / (I2) Included / (I3) Included
GRADE FL
IF
VVS1, VVS2
VS1, VS2
FLAWLESS
INTERNALLY FLAWLESS
VERY VERY SLIGHTLY INCLUDED
VERY SLIGHTLY INCLUDED
SI1
SI2
SLIGHTLY INCLUDED
I1, I2
I3
INCLUDED
CATAGORY
No two diamonds are the same, although they may
‘characteristic free’. Think of every clarity characteristic
be given the same grade I.e VS1 - the number, size,
as a diamonds unique fingerprint. Inclusions should
relief, nature and position of the characteristic(s) will
not be visible to the naked eye throughout the top 4-5
vary. Clarity characteristics are not a negative thing,
clarity grades.
a very small percentage of gem quality diamonds are
18
WWW.LDI.DIAMONDS
CUT In 1919 Marcel Tolkowsky invented the Ideal Cut
Cut grades from highest to lowest
diamond for a round brilliant cut, a precise set of
Excellent, Very good, Good, Fair, Poor
proportions that maximise the 3 elements of light in the diamond - Sparkle, fire and brilliance. Amazingly
As mentioned cut is sometimes mistaken for shape. The
this same cut has stood the test of time and is still used shape of a diamond is determined by owner and polisher today.
Light
100% 50% 34.5 °
16.2% 59.3%
40.75°
43.1% Too Shallow
Ideal
Too Deep
Tolkowsky Ideal Cut
Diamonds are renowned for their ability to transmit
when the rough diamond goes through the process
light and sparkle so intensely. We often think of a
of cutting and polishing. It makes economic sense to
diamond’s cut as shape (round, emerald, pear), but a
produce the highest monetary value from a rough
diamond’s cut grade is really about how well a diamond’s diamond although sometimes requests are made for facets interact with light.
specific shapes.
The quality of cut is crucial to the diamond’s final beauty See some various diamond shapes below and value. And of all the 4Cs, it is the most complex and technically difficult to analyse.
Round
Princess
Emerald
Oval
Marquise
Pear
Asscher
Radient
Heart
Cushion
Baguette
Trillion
LDI DIAMOND GUIDE
19
20
WWW.LDI.DIAMONDS
GRADING LDI’S CHOSEN 4 C’S
THE 5TH C - CERTIFICATION
Our preferred selection of diamonds
A diamond certificate is an added layer of assurance of a diamonds true quality.
Diamonds supplied by LDI are natural, high grade, certified & are from professional conflict free sources.
LDIs loose cut diamonds carry as standard a GIA
Our diamonds are generally:
certificate which can be looked up on the GIA online platform. Founded in 1931 as a non-profit independent
Carat weight - 0.50ct - 5.00ct+ Colour - D, E, F, G, H, I & J Clarity - FL, IF, VVS & VS Origin - Followed the Kimberley Process. Laser engraved on polished
institute dedicated to education in the field of gemmology, GIA has been the industry standard for diamond grading for well over 50 years. Rapaport Investment Diamond Certificate (RDC™) are available on some stones. RDC is the industry’s most stringent standard for diamond quality. Obtained only by highest quality diamonds, the RDC separates premium quality from other high quality diamonds. By certifying top quality diamonds the Investment Diamond Certificate provides absolute confidence and assurance of quality and added value.
LDI DIAMOND GUIDE
21
22
WWW.LDI.DIAMONDS
THE LDI DIFFERENCE ETHICAL DIAMONDS; THE KIMBERLEY PROCESS Supporting ethical streams of diamond importation is imperative to LDI’s business model, we strictly follow the Kimberley Process Certification Scheme. The Kimberley Process Certification Scheme (KPCS) imposes extensive requirements on its members to enable them to certify shipments of diamonds as ‘conflict-free’ and prevent conflict diamonds from entering the legitimate trade. Under the terms of the KPCS, participating states must meet ‘minimum requirements’ and must put in place national legislation and institutions; export, import and internal controls; and also commit to transparency and the exchange of statistical data. LDI is proud to support the KPCS & guarantees every rough diamonds imported by LDI will be accompanied by a Kimberly Certificate.
CLOSE TO SOURCE; A lot of factors are needed to obtain diamonds at trade prices. Firstly a wealth of knowledge is required. Tons of worthless synthetics are bought every year being believed to have been diamond. It takes years of intense study and hands on experience to be confident in diamond trading. Note that a 1.00ct polished diamond is only 6.5mm In diameter, every mm means thousands in value - fractions of a mm count in this business and there is no room for error when measuring & purchasing diamonds. LDI’s purchasing team are trained by the two global leaders in diamond grading GIA & IGI in both polished & rough.
LDI DIAMOND GUIDE
The early stages of diamond mining and rough diamond suppliers sit behind closed doors. Its almost impossible to trade with these miners & suppliers if you do not meet the strict criteria of having an existing respected diamond trading company. The diamond industry relies on trust. On top of knowledge and trade contacts, large sums are needed to invest in diamond parcels big enough to enable true wholesale prices. Usually a diamond will go on its long journey passing many hands before reaching the display cabinet of a jewellery store or online retailer. LDI opens the door to its clients at the earliest stage of the diamond supply chain.
STORAGE ADVANTAGE; LDI offers its clients VAT free storage. Its simple, secure & free for 12 months. Taking advantage of this option means you’ll be getting more carat weight for your money. All diamonds are stored In the highest level of secure storage that is frequently audited and fully insured. The client will have full control, being able to extend storage at the agreed price after 12 months or taking delivery of their goods subject to local taxes and duties. One huge advantage of our storage solution is the goods can be sold In Bond (IB). Selling goods IB attracts investors as the asset is packaged up and ready to go, secure, wholesale price & vat free.
23
LDI’S DIAMOND PROCESS
MINING The diamonds are mined by the mining companies and sorted ready for viewing by LDI.
PURCHASE
Our purchasing team will view the stones and select the
Browse through our
higher quality diamonds.
diamond stock online
IMPORT The diamonds selected for purchase are then imported with an accompanying KPC and fully audited once they reach our secure vaults. The diamonds are then sorted and uploaded onto LDI’s sales platform.
24
WWW.LDI.DIAMONDS
LOOSE DIAMONDS
BROWSE SUPPORT
Browse through our lists of polished diamonds online, all polished diamonds
Our team is on hand to help you with
are of the highest quality & are graded by
any questions along the way. We can
the most stringent gemological institutes
also help with jewellery design if your
and include high definition images and
looking to use your diamond in a
videos so you know exactly what
ring or piece of jewellery.
your buying.
DELIVERY After making payment, your diamond will be delivered to you promptly.
LDI DIAMOND GUIDE
25
Victorian Jewellers Polishing Diamonds, 1890s 26
WWW.LDI.DIAMONDS
ROUGH DIAMONDS
BROWSE If your looking for rough diamonds as a store of wealth, you’ll have to create an account which is fast & free. Once accepted you can browse through our rough diamonds
STORE & INSURE
subject to availability. If purchase of a rough diamond is made, it will be stored in our VAT free secure vault which is cost free for 12 months. You are not investing in shares or a ‘non-physical’ asset, once purchased the diamonds are owned by the client, not LDI.
MANAGE You’ll receive reports on your diamonds in storage so you can monitor their performance. At any time you can request a live trade value, extend the store and insure option or request to receive your diamonds
EXIT
subject to local taxes and duties.
If you wish at any stage to exit your diamonds, there are many options. We offer a re-list scheme where your diamonds will be re-listed on our website. You also have the option of selling your diamond yourself to the diamond industry, auction or privately, over $80 billion worth of diamonds are sold each year.
LDI DIAMOND GUIDE
27
28
WWW.LDI.DIAMONDS
A FINAL NOTE “Having worked with the worlds leading names in diamond mining, trading & education, i’m inviting you to leverage this wealth of experience through LDI’s guides, events & 1-1 consultations. It’s become a personal mission to simplify diamond sales, providing fair wholesale priced diamonds to our clients, eliminating the lengthy diamond supply chain that generates billions in profit each year.
Me & the whole team at LDI want to hear from you, we’re keen on building relationships, feel free to contact us with any questions you have. I hope you have benefited from reading this guide”
Nico Coleby
Nico Coleby
Director of LDI From the first diamond I ever sold to selling thousands of diamonds well over a decade the focus has stayed the same - provide a solution. We have focused on selling in larger quantities and keeping business simple, this enables us to have lower prices benefiting our clients whether they are looking for a diamond to take delivery of and use in a piece of jewellery or store this asset for a rainy day.
LDI DIAMOND GUIDE
29
LONDON DIAMOND INVESTMENTS
THE WORLDS FINEST DIAMONDS LONDON DIAMOND INVESTMENTS
CONTACT US info@ldi.diamonds +44 (0)207 12345 77 LDI 19-21 Hatton Garden London EC1N 8BA
02
WWW.LDI.DIAMONDS