There’s no doubt about it. Diamonds are expensive. Diamonds cost more than gold or platinum. A lot more. So why are diamonds so expensive? I know there are a lot of blog posts out there saying that it’s all a conspiracy by big bad De Beers and jewelers who mark up diamonds 200%. I hate to break it to you but neither one of those things are true.

A nice quality diamond is $5000 a carat. That’s $777,587 per ounce! They aren’t the most expensive substance on earth (that would be antimatter, which costs roughly $500 million per carat) but they are in the top five.

De Beers mines less than 50% of diamonds today and doesn’t control anything about diamond prices. And the retail mark-up on diamonds today is generally just 5-10% not 200%. (Have looked at how amazing RockHer’s diamond prices are? Thank you internet!)

The diamond conspiracy-theory bloggers are quoting one book by David Jay Epstein from 1982, which may have been only slightly exaggerated then but is ridiculously out of date 36 years later, like harvest gold refrigerators and leg warmers.

It’s time to set the record straight. Here are the six real reasons why diamonds are expensive.

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If Diamonds Aren’t That Rare, Why Do They Cost so Much? An Investigation

PUBLISHED Jan. 2 2024, 4:32 p.m. ET

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Despite their widespread popularity and cultural significance, it turns out this popular engagement gem isn't as rare as we may think. So, why are diamonds so expensive?

Several factors contribute to their high price. Let's unpack each of them to see if it's worth shelling out a small fortune for these precious stones or if we should seek an alternative.

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Gem-quality diamonds are actually quite rare.

While diamonds might not be the rarest minerals on the planet, the specific type of diamond used in jewelry isn't that easy to come by. Formed deep within the Earth's mantle billions of years ago, only a small amount makes it to the surface. According to Info Diamond, only about 20 percent of rough diamonds are suitable for gem purposes.

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The Four Cs and precise cutting also push the price up.

Beyond mere scarcity, the value of a diamond is deeply intertwined with its characteristics. GIA says the Four Cs (cut, clarity, color, and carat weight) are the universally accepted method of assessment.

Achieving an optimal cut that maximizes brilliance and sparkle requires meticulous craftsmanship and specialized tools. These factors significantly impact the price, with flawless, colorless, larger stones reaching astronomical heights.

Never underestimate the power of a good marketing campaign.

The diamond mining giant De Beers famously employed targeted marketing campaigns in the 20th century to associate diamonds with romance, commitment, and everlasting love.

This carefully crafted image and their control over a significant portion of the diamond market helped drive demand and solidify diamonds as the stone for engagement rings and other sentimental jewelry. It was such a successful campaign that Hubspot (the marketing gurus) wrote an article about it.

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Diamond mining is an intense and costly process.

Extracting these precious stones is a complex and expensive endeavor. Diamond mines can be kilometers deep, requiring heavy machinery and skilled labor. Environmental regulations and ethical mining practices also add to the cost.

Responsible sourcing initiatives like the Kimberley Process Certification Scheme aim to combat conflict diamonds, but their efforts mean higher operational expenses.

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The market forces of supply and demand are hard at work.

While the diamond industry is often accused of operating on a controlled supply system, Better Than Diamond says it’s no longer true that diamond prices are artificially controlled.

They claim that lab-grown or otherwise, the price and value of diamonds are set purely by market forces of supply and demand, which Investopedia does an excellent job explaining.

Diamond mining has a dark side.

Sadly, there’s also a dark side to diamond mining. More commonly known as "blood diamonds," Britannica describes conflict diamonds as diamonds mined in war-torn regions to fund armed conflicts, perpetuating violence and human rights abuses.

While initiatives like the Kimberley Process Certification Scheme aim to reduce conflict diamonds, Brilliant Earth says the issue remains prevalent. As consumers, it’s up to us to make informed purchase decisions that contribute to the development of a more ethical and sustainable diamond industry.