Almost all the stones found in Africa's mines and rivers are packed into parcels and shipped thousands of miles north. Uncut, they are known in the business as "rough diamonds." The capital of the rough diamond trade is the port city of Antwerp in Northern Belgium. There, diamond dealers from around the world throng its diamond district to buy and sell.
A vast river of diamonds flows through Antwerp25 billion dollars worth annually. It's the equivalent of the gross domestic product of Alaska, or enough stones to fill three stretch limos. Some are from legitimate sources, some not so legitimate. Belgian police acknowledge as much as fifty percent of the trade may be on the parallel market. The city is now at the center of the human rights campaign over "conflict diamonds" from Africa.
Walking onto the trading floor in one of Antwerp's rough diamond exchanges is like entering the prism of a diamond. A slanted wall of floor-to-ceiling glass captures north-facing light the best for viewing gemstones. Traders in dark suits sit at long, narrow tables. Most are men…who look determined, even grim, as they sift through handfuls of stones, inspecting each one with magnifying glasses and punching figures into calculators.
Michael Vaughn, is a British-born diamond broker. He wears a yarmulke and a well-tailored black suit. Standing at respectful distance, he gives a play-by-play of a buyer contemplating a deal:
"Here on the trading floor, you have the client being shown a parcel of diamonds. The first thing he has to decide is whether he needs the item", says Vaughn. "Then the question is 'How much?' Then begins the negotiation. If at a certain stage the prospective dealer or broker feels that he can accept the offer, he will take that parcel, put it in the envelope, seal the envelope, on the seal put his initials, and inside the envelope will be the terms of payment. That is called a cachette. It is the bit in our industry that is holy."
The cachette is holy because the diamond business is traditionally a gentleman's gamea discreet, honor-bound profession. A handshake can secure a deal worth a fortune.
Next: A Portable, Easily Convertible Form of Wealth