Biggest Diamond in More Than a Century Unearthed in Botswana | Hacker News Reader

Biggest Diamond in More Than a Century Unearthed in Botswana

bloomberg.com

26 pointsocjo42 comments

Yay, this will bring so much wealth to the people of Botswana!

Right you are...

The people of Botswana don't even rate a mention in the article, they're likely not going to see a single dime of the proceeds which will be in the many tens of millions of US$.

I think he was sarcastic :)

I think I got that.

The Botswana Government will get a 10% royalty.

How generous.

Its about what corporate taxes are many places. Why would it be different there?

Because it is value extracted, not value added, and because the receivers of the majority of that value are in a position to extract that value by virtue of having historically exploited Botswana. So the larger part of the value will be removed from the country rather than that it will become part of the local economy it will become part of our economy.

That could be, but for the jobs, transportation, development and taxes they pay, right? The benefit to Botswana is somewhat diminished by having the diamond shipped overseas. But lets be honest: there is no real industrial/commercial value to this diamond at all; it is simply a trophy.

Diamond mining is highly mechanized. There definitely are local workers but fortunately it is no longer as labor intensive as it used to be (that's bad because fewer jobs, but it is also good because those jobs were super dangerous and very low pay anyway).

Agreed that it is mostly a trophy.

Corporate taxes are separate. 10% is the royalty the Botswanan government charges for precious stones. Any taxes are on top of that.

Sounds about right for mineral rights. Oil and gas leases for the US pay a 12.5% royalty.

The BBC article about this, mentions that the diamond industry has transformed Botswana into a 'middle-income' country.

http://www.bbc.co.uk/news/world-africa-34867929

Botswana is an upper-middle-income economy with a freer press and lower corruption than a number of European countries. Their level of corruption is slightly worse than that of France, and way better than most South or East European country (source: https://www.transparency.org/country/#BWA ; http://www.heritage.org/index/country/botswana).

Also, they are one of the largest producers of rough diamonds in the world, so a single stone may be a big deal for the company extracting it, but it means hardly anything to the country.

Africa has some insane level of corruption and poverty, but there are some exceptions (namely, Botswana and Mauritius).

Thank you for that information, that totally changed my view on the situation in Botswana. Reading up on Africa from time to time and I completely missed this.

That is great to hear, thank you for educating my stupid sarcastic ass.

three African governments get together and discuss what they embezzled from different projects

leader 1: see that bridge right there, I got 2 million in my pocket

leader 2: see that road, I got 4 million in my pocket

leader 3: with a smudge on his face, see that building? leader 1 & 2 look at him with amazement and go, "what building" & he goes, EXACTLY!

& for the record I really live in Africa (Ethiopia)

We have reached levels of unfathomable wealth.

>Last week, Hong Kong billionaire Joseph Lau paid 48.6 million Swiss francs ($48.4 million) at Sotheby’s in Geneva for a 12.03-carat blue diamond, the most spent on a jewel at auction. A day earlier, he paid 28.7 million francs for a 16.08-carat pink diamond. Both purchases were for his 7 year-old daughter, his office said.

I hope she gets to play with them.

i think this is meagre compared to the kings and monarchs of past ages (think egyptian pharos etc, or ancient emperors).

That's nothing. Another guy from Hong Kong is offering more than twice that to anyone who can convince his daughter to be with a man.

Which, bigoted and misguided though it may be, offers a much better ROI than shiny rocks for a child.

Seems like the hip thing for a multi-billionaire to do would be to buy the whole stone and leave it uncut, just so they could have the largest diamond in the world.

Since the main difference between coal and diamonds is some expensive processing (currently it's usually done by natural processes but that detail can be changed)

So diamonds might have a fair price of, to be generous, 1000 * times the cost of coal. So diamonds cost the ballpark of $50 per kilogram.

Obviously they don't right now, but it gets you thinking about the intrinsic value of diamond and how that price might move in the future.

I wonder about the intrinsic value of dollar notes.

Caloric value of paper or textile?

Interesting. Caloric value as the way to compare value of things rather than fiat money. That's how it used to work right? Maybe we fall back to that after society falls?

> That's how it used to work right?

When?

http://insiderzim.com/biti-says-we-can-even-use-firewood-as-...

http://www.investmentpostcards.com/2008/04/02/currency-notes...

Same as it is for coal - how long it takes to burn it. Which is a lot quicker.

On the other hand, flags, religious symbols, and monuments don't have a ton of intrinsic value either, but humans are funny that way, with their social contrivances.

Unlike coal or religious symbols, diamonds aren't just useful for fuel. The properties of diamond (e.g. transparent, very hard) make it a useful material. More so if the price comes down.

Industrial diamond use is not limited to burning (in fact burning isn't really an industrial use of diamond as far as I know, there's plenty of cheap ways to heat stuff). Diamonds (mostly synthetic) are used for cutting, piercing (drill bits), abrading[0], anvils in very high-pressure context and electronics heat sinks.

Most of the mined diamond production and the vast, vast majority of synthetic diamonds are not gemstone-grade and are used industrially.

[0] for all three mostly as diamond coating on tools, though there are monocrystalline diamond edges and blades, mostly for surgical use and microtomy: https://en.wikipedia.org/wiki/Diamond_knife

I wonder about the intrinsic value of intrinsic value.

Since the main difference between sand and Intel processors is some expensive processing, processors might have a fair price of, to be generous, 1000 times the cost of sand. So processors cost the ballpark of $10 per kilogram.

Obviously they don't right now, but it gets you thinking about the intrinsic value of processors and how that price might move in the future.

Quite right: it is indeed moving that way and it's worth thinking about.

See for instance http://www.antipope.org/charlie/blog-static/2012/08/how-low-...

So diamonds cost the ballpark of $50 per kilogram.

Close. Current prices for industrial diamonds seem to be more like $100-400 pr. kilogram depending on exactly what you want. Of course those diamonds aren't exactly the type you put into jewelry.

> Current prices for industrial diamonds are more like $100-400 pr. kilogram

IIRC the price was closer to 20 times that for diamond dust, did something change very recently?

No idea. I just googled a bit and pulled some numbers from a few different bulk suppliers I found (all in China). Perhaps competition from china has had a dramatic effect on prices?

Or they're bullshit suppliers advertising ridiculous prices and wares, like the company advertising kilograms of stuff only made on milligram-scales since it was discovered (don't remember where I saw that, probably the comments of a "things I won't work with" entry)

It won't because the main value of dug diamonds is rarity, which makes them perfect goods to display your wealth and status. Many of these goods are stored in vaults (some in freeports, areas of an airport carved out for fiscally optimized storage), and the only sign of a change of ownership is an extra name on a registry... but the whole point is to leave your mark on that registry.

So, the demand for these diamonds is not driven by their diamond-ness, just as the James Bond set Astons fetch higher value at auction than the same model sold at retail.

You can already see a version of this by heading to any jewelry shop and comparing lab diamond prices to the stuff sold by Tiffany's etc. Or just asking any young, not yet married lady in the street if she'd be OK with a synthetic.

If you say "synthetic diamond" to most people (I suspect) they would imagine you mean cubic zirconia or something similar.

A "synthetic" diamond is 100% a genuine diamond, made from the same stuff as mined diamonds.

Intrinsic value is not relevant to gem-grade anything, they're status symbols not industrial commodities.

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