At the start of the third Israel Rough Conference, speakers noted the industry could not have had such a conference 10 years ago.

But, as the event’s moderator later pointed out, Israel did have a rough conference 10 years ago. Yet it seems as if it was about an altogether different industry. At that time, De Beers was the unquestioned big cheese, and attendees debated whether small producers should join the then cartel.

Ten years later, there are a lot more cheeses in the house, as World Federation of Diamond Bourses president Ernie Blom noted: “Rough diamonds [today] can be bought in London, Antwerp, Ramat Gan, Johannesburg, Moscow, New York, Dubai, and Mumbai, as well as in cyberspace on the Internet.”

Ironically, as most of the industry consolidates, the production side is mushrooming, thanks in part to technological improvements that have made it possible to mine previously uneconomical deposits. The conference featured a parade of well-coiffed, new-generation executives like Clifford Elphick, formerly Harry Oppenheimer’s personal assistant. Out of nowhere, Elphick is now chief executive officer of Gem Diamonds, a small but significant producer with output in four countries and a $1 billion market capitalization.

It was also the most diverse diamond conference in memory; about half the speakers were African, including government officials such as the vice president of Sierra Leone. As one speaker from Namibia put it: “Usually I go to these conferences, and I see myself alone. But I am happy to see a strong Namibian delegation.”

As speaker after speaker acknowledged, diamond miners are in the catbird seat today. With emerging markets like China and India on the brink of exploding, and no major new mines on the horizon, the big concern is having enough supply to match demand. “One of the greatest challenges for my colleagues in the room is where we find new mines,” noted De Beers managing director Gareth Penny.

But even so, diamond mining does present certain challenges, particularly deciding what should happen to the diamonds once they are found. Among the main topics:

Who markets diamonds? When three people, separately, bring up a seemingly new idea, the industry may be watching the beginning of a trend. Today, De Beers controls approximately 40 percent of the market, and it’s clearly rethinking the millions it devotes to generic marketing. It has cut back its promotion budget in the United States and is devoting more resources to its proprietary Forevermark. “De Beers has carried the diamond industry in terms of marketing,” Penny noted at the conference. “It is time for us to say we can’t do it all alone.”

The question of who should do it depends on whom you ask. At the conference’s opening, Israeli Diamond Institute chairman Moti Ganz called on “every rough producer” to carry the burden of advertising diamonds generically.

But Penny proposed something broader—a promotional effort that would encompass every part of the pipeline. He compared it to the Kimberley Process and the World Diamond Council, “an industrywide effort.” “We don’t have any objection to working with other producers to drive demand,” he said. “We have to spend less time thinking the competition is inside this room and more time realizing the competition is outside of it.”

Days later, the International Diamond Manufacturers Association resolved to take a “leadership role” in developing a new marketing agenda for the industry. “General diamond promotion will dry up if it does not receive broader support,” noted IDMA president Jeffrey Fischer. “Diamonds do not sell themselves.”

Will there be a Platinum Guild for diamonds, supported by the entire industry? And will any generic marketing campaign be run by JWT, the agency that has traditionally advertised diamonds? For now, these issues are still in the talking stage, but this topic is expected to be front and center at the World Diamond Congress in Shanghai. “There are countless examples of other industries banding together to promote their common products,” Fischer noted. “Our industry may or may not be smaller in size, but we cannot afford to be small in thinking.”

Love the tender? When people picture rough diamonds being sold, they think of De Beers’ fabled sight system, where diamonds are carefully parceled out to the industry’s elite. But more smaller producers sell rough by auctions, otherwise known as tenders. Advocates call it a transparent process where the producer gets the most for its diamonds and there can be no allegations of favoritism.

It hasn’t escaped attention that even De Beers recently experimented with tenders, when subsidiary Diamdel auctioned rough over the Internet, although Penny noted that auction used “only a very small percentage of stones from the last sight.”

Still, not everyone is a fan of the concept. Critics say they prevent diamond companies from forming relationships in which each participant looks after the others’ needs. Among the skeptics is Israeli manufacturer/producer Lev Leviev, who bluntly said manufacturers that “pay crazy prices at tenders [are] suckers.”

Ganz agreed that tenders “hurt manufacturers,” because they lose the ability to plan ahead. “For me to want the rough you produce, I must receive it on a regular basis, according to periodic, fixed sortings,” he said. “Only under these conditions can I commit to chains and stores and adhere to a plan.”

He added that forming a relationship helps producers, too. “What will you do tomorrow when prices decline?” he asked. “Who will be there? Who will be committed to you?”

Beneficiation. Today, of course, diamond producers want more than just money for their products. Many African countries are now demanding cutting and polishing jobs as well, in a process called beneficiation.

The most noteworthy beneficiator is De Beers, which has pledged to support factories in Namibia and Botswana. Yet, it was significant that even the smaller producers talked about setting up factories and supporting local employment.

This policy could come at a cost—to traditional centers. Mooketsi Jongman, chief minerals officer of Botswana’s Ministry of Energy and Minerals, sought to allay fears that African beneficiation would lead to job losses elsewhere. “Botswana is only seeking to produce a tiny amount” of the diamonds it mines, he remarked. “It is far from our intention to kill the industry in other areas.”

Yet, as Ganz observed, the arithmetic is off. Noting how sometimes diamond manufacturers keep factories open even when it goes against their economic self-interest, he said: “If the diamond-producing countries are now polishing $800 million of diamonds, we should be closing down factories around the world that polish that amount—$800 million. However, factories are not closing.”

Others worried that polishing in high-cost African countries won’t be economical. “Governments must be extremely careful not to use their regulatory power to eliminate the competitive distribution of diamonds, or they will lose their diamond business,” argued the session’s final speaker, publisher Martin Rapaport.

Still, most were sympathetic to the desire of these countries to get the most from their resources. Reminded conference moderator Chaim Even-Zohar: “Never forget one thing: The mineral wealth of producing countries belongs to the people of those countries.”