We receive calls on a near daily basis, from clients who have a strong desire to get into the rough diamond business. Many people join so-called diamond and gold groups on LinkedIn or similar sites. Here they learn about manifests, NCND’s, MFPA’s, SBLC’s, 103’s, CIF, Kimberly Certificates, export documents, export taxes, broker agreements, fees. and other relevant documentation. In a short time, they gain knowledge of the correct verbiage of these agreements, and are not easily fooled by poorly written documents.
They gain knowledge of table top meetings in Geneva, Dubai, New York and other locations where there is a Brink’s or Malca-Amit office. They discover most buyers want D-H VVS-VS rough from 5.00 ct. plus. They find out these parcels belong in a price range often quoted on the manifest from $1800- $2800 per ct.
With further inquiry, they find out the diamonds are coming from South Africa, Botswana, DRC, Angola, Sierra Leone, Guinea, Namibia and several other diamond producing countries. They even hear of parcels coming out of Ghana and Kenya.
Getting to this point in their education, they rightfully feel they have learned a great deal. It is a task learning this part of the diamond business. People who master this area of the business often feel they know a great deal about the rough diamond business. When we talk to people who have reached this level of understanding, they speak with pride in having come this far. They are rightfully proud of their knowledge.
Many of these well-informed people establish themselves with contacts they have made who are, or who have, “direct” access to sources of rough in Africa, Russia or Brazil. These contacts mostly come to them through LinkedIn or other internet sites. Robert believed he had made valuable connections.
Usually, these ‘valuable’ connections send manifests with great prices and wonderful promises. They assure their potential clients they can supply large quantities of rough at super competitive pricing.
At this point, many buyers put deals together with MFPA’s, NCND”s and all the other relevant documents and procedures. Buyers, often with expensive gemologists in tow, fly to Geneva, Dubai, New York and other locations where there is a Brink’s or Malca-Amit office. As they attempt to close transaction after transaction, they are met with rare success, and constant, expensive failures. After a few failures, most realize the obstacles to success are extremely difficult and expensive to overcome. It is usually not long before buyers come to the conclusion that in order to buy rough at the right price, and to have a consistent supply, they will have to buy directly in Africa.
Most people who work with rough diamonds, are a tenacious group. In a short time, they seek out African sources and develop close, over-the-phone relationships with the very friendly suppliers in Africa. The suppliers will assure the buyers of the ease of doing business with them, as well as guaranteeing the buyer will find abundant supply and great pricing, Buyers, believing they have studiously completed their due diligence, hop on a plane to Africa.
It pains me to hear of their tales of loss when they go to Africa. As we have said, we have made every mistake you can make and have lost a great deal of money working in the diamond business. we also have made a lot of money, but losses are difficult to recover. Aspirants, are intelligent, and are often successful in their fields. As we said, they do their best to educate themselves. Unfortunately, there are few avenues to prepare one for working in Africa. Without the right contacts, local knowledge, extensive experience and education, it is rare to succeed in the rough diamond business.
When we ask these people if we could be successful in their fields of endeavor without great contacts, local knowledge, experience and education, they laugh out loud. Yet, these same people come into the rough diamond business with limited experience, education and contacts and cannot understand why they have lost their money. To those people, we have to ask: What were you thinking?
We have been in the diamond business for more than 30 years. We am still learning! For those of you who are considering entering into the rough diamond business, or wanting to buy rough diamonds in Africa, we can help.