The diamond industry may be beginning to recover, according to De Beers executives who spoke at the Diamond Town Hall Meeting at the Antwerp World Diamond Centre earlier this month.

Gareth Penny, De Beers managing director, said “diamond inventories have fallen to levels which have justified increasing the mining production of the De Beers mines after it had been reduced by some 90 percent in the first quarter of the year.” He also said “The demand for De Beers rough diamonds is picking up,” and that “De Beers production is increasing to keep pace with demand. Retail sales have also shown an improvement.”

He noted that in the period from 1970 to 2009 there were four major recessions in the US, and in the five year period following each, rough prices rose sharply. Penny expects the same to happen this time. I do hope he’s right, and that demand truly is rising. It would be all too easy for him to just tell the crowd at the town hall (including sightholders) things they want to hear.

Photo by Hamza Hydri

Now this is interesting–a new online diamond exchange called DODAQ is launching soon. Its goal is to transform the trading of polished diamonds, from trades based on existing weekly price sheets to a real time, automated pricing mechanism. Such a system will give people a lot more data–they’ll have benchmarks to compare their trades with and will be better able to tell whether they’re getting a good deal.

DODAQ’s success will largely depend on whether people are willing to use it, and how well the company can prove that it has created a trustworthy marketplace. While many traders may welcome the greater transparency inherent in an online exchange, others who are established in their ways may be less willing to adopt.

The DODAQ exchange hasn’t launched yet, but they do currently have a simulator running so people can get a feel for the service.