"Recycled" diamonds come back to haunt industry
By Julie Gordon
TORONTO (Reuters) - Sabrina Thompson, a 30-something restaurant manager from Toronto, says she turned to Craigslist to sell her diamond engagement ring after her relationship ended.
An embittered Thompson, who wants C$1,800 ($1,800) for the half-carat ring, says the cash will help her move on with her life.
"He said I could keep it, but I wouldn't have given it back anyways," she told Reuters. "If it doesn't sell in the next month, I'm probably just going to go to a pawnshop."
Experts say a growing cadre of people, especially in North America, are thinking along the same lines. Rather than hanging on to memories of a failed relationship or departed relative, they are opting to "recycle" their diamonds.
"You have no money to pay your medical insurance, you have no money for your mortgage," said Chaim Even-Zohar, a consultant with Israel's Tacy Ltd. "So you take your jewelry and your diamonds to the pawn shop."
It's a trend that is sending ripples through the gem industry at a time when high-quality rough diamonds have become more difficult to find, and more expensive to mine.
The growing influx of "used" gems means prices could stagnate over the long term despite the supply restraints, Even-Zohar said during a presentation at PDAC, the huge mining industry convention held last week in Toronto.
To be sure, analysts were already expected a short-term dip in prices as a weak global economy cuts disposable income in Europe and North America. But the forecast by Even-Zohar, a respected expert, seemed to confirm a nagging fear that recycling could hurt explorers and miners for years. Continued...