Diamond traders buy and sell diamonds for profit, negotiating prices with mining companies and selling to jewelers or investment firms. They may work for mining or diamond distribution companies, or as independent brokers. Laws regulate their activities to prevent the sale of conflict diamonds.
Diamond traders buy and sell quantities of diamonds with the intention of generating profit from the trade. Many traders are employed by mining companies and diamond distribution companies. In some countries these traders are called brokers and some of these individuals are employed by investment companies rather than companies involved in the diamond industry.
Large mining companies and smaller independents compete to find rough or rough diamonds and other types of gemstones in mines located around the world. Diamond dealers buy rough diamonds directly from minors and try to negotiate deals to sell these gems to jewelers, investment companies or individuals. Traders must negotiate prices with mining companies and these prices, like those of most commodities, depend in part on factors such as supply and demand. Additionally, smaller ones often charge a premium price for particularly large diamonds, as these stones can fetch a high price on the international market.
Having purchased rough diamonds, traders sell the stones to companies that finish the diamonds. Some dealers are employed by companies that cut and finish diamonds and these individuals are usually salaried employees. Other dealers work independently of the diamond companies and these dealers usually receive a commission. In some cases, diamond wholesalers hire independent traders to broker deals with mining companies and individual minors.
In addition to buying rough diamonds, traders also buy finished diamonds and sell these gems to jewelry stores and investment companies. Merchants can agree to buy large amounts of diamonds that can be used to make earrings, engagement rings, and other types of jewelry. In other cases, a dealer may be hired to locate a specific diamond that meets the requirements of a particular individual, such as a wealthy person who wants to purchase an extremely large diamond as a gift or status symbol.
Like other commodities, diamonds are bought and sold by investment firms concerned with profiting from deals rather than taking ownership of the stones. Investment companies, unlike gem companies, do not have storage facilities to hold diamonds. Consequently, diamond traders employed by investment firms sometimes have to take a loss in diamond trading if they cannot find a buyer willing to pay a premium for the stone. As with other investment company brokers, diamond traders typically receive paid commissions rather than salaries.
In many countries there are laws to regulate the activities of diamond traders. These laws are designed to ensure that traders do not buy and sell so-called conflict diamonds originating from war-torn areas. In the past, proceeds from diamond sales were used to fund military expenses associated with civil wars and other conflicts. Consequently, traders in many parts of the world need to keep detailed records that they purchase their diamonds from reputable sources.
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