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Diamond producers pool their resources
The world’s largest diamond mining companies have formed an association to buoy demand for mined diamonds, but won’t be doing generic marketing on the scale that De Beers once did.
Las Vegas--The world’s largest diamond mining companies have formed an association to buoy demand among consumers, particularly millennials, for mined diamonds.
Called the Diamond Producers Association (DPA), the organization rose “from the ashes” of the International Diamond Board, the industry’s last attempt at pooling resources to create a generic marketing campaign for diamonds.
However, its focus is more targeted--and its budget is too small--for a generic marketing campaign on the scale of what De Beers used to do in halcyon days gone by.
Alrosa, De Beers, Rio Tinto and four smaller mining companies--Dominion Diamond Corp., Lucara Diamond Corp., Gem Diamonds and Petra Diamonds--are the seven founding members of the association and have pledged a combined total of $18 million over the next three years to start its functions, with the larger mining companies paying in more.
That is much less than the hundreds of millions of dollars De Beers used to pour into its advertising campaigns each year.
“Everyone’s asked about generic marketing and we put it out there, the first budget we are aiming at is around $6 million (a year), and I wish anybody luck trying to do generic marketing for $6 million,” Jim Pounds, an executive vice president with Dominion, said in an interview with National Jeweler at JCK Las Vegas.
“What the focus of the DPA … will be (is) to maintain the desire for diamonds, and I think that’s very important … the young millennial generation, the next round of people going out to buy diamonds, we want them to have a desire for natural diamonds and to maintain that.”
In other words: the companies that mine diamonds want to protect their product as the interest in, and quantity of, lab-grown gem-quality diamonds increases.
Pounds said they also want to protect consumer confidence in diamonds, which have been hit with a number of disclosure scandals as of late.
There have been several discoveries of undisclosed lab-grown diamonds--including the 145 man-made diamonds submitted to IGI in Antwerp as natural stones a few years back--and the recent issue with the undisclosed, and still undefined, color treatment discovered by the Gemological Institute of America in Israel.
“No,” Pounds answered quickly when asked if he sees non-disclosure as an issue. “But there are isolated cases that you read in the press. We don’t see as a problem. But … we don’t want it to become a problem.”
While more specifics will come later in the year after the DPA hires an executive director, the press release announcing its formation lists maintaining and enhancing consumer demand for and confidence in diamonds, providing a reliable source of trade and consumer research, and acting as the unified voice of the diamond producers among its mandates.
The association also seems open to collaboration with other industry organizations. Forevermark CEO Stephen Lussier said at the Rapaport breakfast held Sunday in Las Vegas that the DPA is not going to do generic marketing on its own but will collaborate with others, and that “idea leadership” is needed.
The DPA will be incorporated in London but based in New York and will operate in compliance with all applicable competition and antitrust laws.
Pounds said they aim to have selected an executive director, which will be a full-time, salaried position, by the third quarter.
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