When Richard Burton bought a 69 carat, pear-shaped diamond in 1969 to please his beautiful and spoiled film star wife Elizabeth Taylor, the jewel was put on public display at the Cartier shop in New York City. Some 6,000 people mobbed the store each day to catch a glimpse of the Taylor-Burton diamond, a token of romance between the most famous couple on the planet. The New York Times, however, was sniffy.
"Peasants are lining up outside Cartier this week to gawk at a diamond as big as the Ritz that cost well over a million dollars," one report said. Future historians may look back at the event as one of the high water marks of diamond mania that swept the world because this week De Beers claimed that global supplies of new diamonds were running out as mines were being depleted. Diamonds may not be forever despite De Beers' best marketing efforts because, if no new sources are discovered, the world's supply of the precious gems will run out of in about 20 years.
"Diamonds are a treasure of nature that should be properly protected, because there will be fewer to sell," Gareth Penny, managing director of De Beers, told the Financial Times. "The reality is that supply cannot keep up, and that will become very accentuated over the next 15 years." As a preventative measure De Beers, the biggest diamond mining company in the world, will scale back production next year to 40 million carats a year, a decrease from the current 48 million.
That may well be the deciding factor for jewellery lovers contemplating whether they should splash out on the white and yellow diamond pavé panther bracelet on sale at Cartier in the Dubai Mall. Only five are available in the world, after all. Working mines in Botswana, South Africa, Namibia and Canada are being stripped of stones to keep up with rising demand in the Middle East, Asia and China, which account for 38 per cent of global diamond sales which total approximately US$64 billion.
The global recession hit the market badly last year but overall demand is still growing. In Dubai alone, the diamond jewellery business was worth $408 million in 2008. Although many of the buyers are tourists, nearly half of the baubles were sold to Dubai residents, according to the Diamond Intelligence Briefs, a trade magazine. The trouble is no new mines yielding quality gems have been found in the past 20 years, said Chaim Even-Zohar, a renowned diamond consultant, speaking from Botswana where the economy is driven by the gems.
"The discovery systems have become sophisticated with airplanes, magnetic things and satellites so the fact that they haven't found new mines in the last 20 years is not very encouraging. Botswana for example may run out of diamonds by 2029. The management of the resource has become extremely important and extending the life of the mines is crucial to the domestic economy." Mr Even-Zohar said he did not believe De Beers, which has a 50/50 partnership with the government of the African country to mine for diamonds, was cutting back production to increase prices.
"It is not about keeping diamonds in the ground to drive the prices, it is keeping diamonds in the ground in this instance for this desire in Botswana to extract the benefit for a longer period." Does it mean everyone should rush to Harry Winston with credit cards to buy the jewels as investments because of future shortages? "As a general rule there will be less production. Does that necessarily translate into shortages depends on your take on the demand. I do think we can expect some significant growth in places such as the Gulf, like India, and probably China which is starting from a low base. But there are other markets which may decline or not grow as much and one will even out the other. It's very hard to say."
It is perhaps ironic that De Beers is safeguarding a natural resource from becoming a victim of its own success because it was the company which used brilliant and strategic marketing after the Second World War to turn carbon crystals that have no other use into sought after symbols of luxury, romance and glamour for the masses. Before that, only a few of the great merchants in Antwerp cut and polished the stones for Europe's monarchs.
De Beers launched one of the most successful marketing campaigns in history when, in 1947, a New York advertising agency came up with the slogan "A diamond is forever" written on the bottom of a picture of young lovers on honeymoon. After that no American man could consider uttering the words, "Will you marry me?" without a solitaire to slip on to his would-be bride's finger. With the US market conquered, De Beers moved on to Asia. In Japan, a ring has long replaced the ancient ceremony of bride and groom drinking rice wine from the same wooden bowl; and in China - which is fast replacing Japan as a top consumer of diamonds - young couples increasingly prefer the sparkling gem to the more traditional jade and gold.
The obsession may have started with Marilyn Monroe twirling about in a pink gown coquettishly winking and singing "diamonds are a girl's best friend" in the 1953 film Gentlemen Prefer Blondes, but it was Elizabeth Taylor, whose love of jewels has outlasted all eight of her marriages, who perhaps forged the lasting link between glamour and diamonds. Richard Burton's first gift to her was the 33-carat Krupp diamond ring. "When it came up for auction in the late 1960s, I thought how perfect it would be if a nice Jewish girl like me were to own it," she once said.
The hype may have been too successful. Prospectors are being forced to search increasingly remote corners of the Earth for high quality diamond pipes, kimberlite volcanic rock in which the rough stones are embedded. The last important discovery was the Diavik mines, 300 kilometres north of Yellowknife, in the Northwest Territories of Canada, in the late 1990s. But Diavik is drying up after years of open-pit excavations.
Last month its owners announced the start of an underground dig in a bid to extend the mines' life to 2020. "We've already had the T-bone steak and we've already had the prime rib roast of this particular animal. We now have to move on to the hamburger and the chuck steak," said Bob Gannicott, chairman and chief executive officer of Harry Winston Diamond Corp, which owns a 40 per cent stake of Diavik.
Prospectors are eyeing up Zimbabwe as the next hotspot. "I believe Zimbabwe has a tremendous potential for cheap diamonds, not expensive diamonds," said Mr Even-Zohar. "Zimbabwe may produce anywhere from 20 million to 40 million carats if developed properly and that would change the whole forecast. But Zimbabwe is of course a very problematic country at the moment. As soon as you have responsible, decent and well-organised mining with transparency and good governance, it will be very important."
Diamonds are formed 140 to 190 kilometres below the Earth's surface and can take up to four billion years to be created. They are brought up near to the surface through volcanic eruptions of hot magma which cools into kimberlite. The days of diamonds being washed up on the river banks of South Africa are over, but that does not mean there will not be major new discoveries in the future, said Harry Levy, a London-based diamond dealer.
"Ten or 15 years ago there was a massive flood in Angola and when the floods settled down it brought up a lot of diamonds. There was a huge amount of nice quality diamonds that emerged on to the surface and who is to say a similar flood will not bring up another load somewhere in Africa?" Diamond lovers may have to wait for another gesture of goodwill from Mother Nature to send her sparkling stones up from their hidden depths.