Rapaport Magazine
Cover Stories

Embracing Accountability

By Amber Michelle

Zoltan David Dreamcatcher earrings from the “Diamonds with a Story” collection.
As U.S. consumers become increasingly concerned with corporate accountability, some are asking where the diamonds in the jewelry they are buying were mined. To address those issues, Rio Tinto has developed a Chain of Warranty program in conjunction with a unique marketing plan to appeal to consumers’ sense of social responsibility. In an exclusive interview with Rapaport Magazine, Bruno Sane, general manager of marketing, Rio Tinto Diamonds, explains.

Rapaport Magazine: Define Chain of Warranty.
Bruno Sane: Chain of Warranty is a mine-of-origin program. It is about having a series of checkpoints in place that guarantee the tracked journey of the diamond throughout the supply chain, from the mine to the jewelry manufacturer and, finally, to the store. From mine to store, we provide proof of a segregated supply chain — in the form of a Chain of Warranty (COW) certificate— so that ultimately the end-consumer can rest assured that the diamond in the piece of jewelry he or she has purchased comes from a specific mine and country of origin. This requires a rigorous tracking system put in place by an independent third party — a consulting company that specializes in supply chain tracking. This third-party company knows the diamond industry and spent 18 months developing a system specifically for Rio Tinto. To give you an example from a different industry, our program could be compared to the certified supply chain monitoring of Fair Trade products.

RM: Does Chain of Warranty apply to diamonds from all Rio Tinto mines or just Argyle?
BS: Rio Tinto is one of the mining companies that has always sold its productions by country and mine of origin. Our diamond supply is segregated and we never mix the goods that come from our different mines. Therefore, Rio Tinto is able to preserve the national identity of our diamonds. In the U.S. market, the chain of warranty applies to both the Argyle production from Australia and the Diavik production from Canada.

RM: What happens when the diamond comes out of the ground?
BS: After the goods have been mined at the different mining sites, they come directly to Antwerp, where all sorting, valuation and quality assurance takes place. Rio Tinto has a system in place that records and tracks all diamond movements from the time of their arrival in Antwerp to their final sale.

RM: Are the diamonds offered only to Rio Tinto’s core customers, its Select Diamantaires, or also to other firms? How are they chosen?
BS: It is important to understand that Rio Tinto has a demand-driven philosophy — we respond to the demands of our partners. We work with retailers and jewelry manufacturers to set up tracked programs and we work together on design directions based on trends, consumer insights and preferences. Once we have defined the jewelry product that will work with a particular partner in a particular market, we select the rough diamonds that will provide the desired polished outcome. We start from the jewelry and the marketing concept, and work back from there.
   Our strong partnership philosophy is a key element of our market development initiatives. Our partnership approach is best exemplified by the Argyle Diamond Network, which is a network of our partners that includes both our Select Diamantaires and selected jewelry manufacturers. We even have a pool of designers and specialized marketing agencies. It is a full network of competencies engaged with the same goal — to add value. Together, we offer a package of support and service solutions from mine to market to ensure that the entire supply chain is organized to supply the right goods. This is our value proposition to our retail partners so that they, in turn, can focus on retail and distribution. All partners in our network are capable of delivering full marketing support for all initiatives under our “Diamonds with a Story” platform.

RM: What is the “Diamonds with a Story” platform?
BS: “Diamonds with a Story” is a concept we have developed and built upon to address the consumer’s need to know the back story to their diamond — where it comes from, how it was recovered from the earth, what determines its color, what forces shaped it, where it was cut and polished and so on. Increasingly, consumers are asking these questions and we are working across all markets with tailor-made programs. What is required in China, for example, is very different than in the U.S., which is different than India.

RM: Once the manufacturer has the diamonds, what are its responsibilities?
BS: Once the manufacturer has received the rough diamonds into its office, the goods that are identified for the Chain of Warranty program are given a unique numeric and visual code to ensure traceability throughout the different steps in the manufacturing process. Again, this is monitored and verified by an independent third party.

RM: What kind of paperwork follows the diamonds?
BS: Parcels of diamonds containing the Chain of Warranty always carry a unique ID code, which enables easy identification between locations. At every stage of the manufacturing process, the necessary paperwork containing the traceability information accompanies the diamonds.

RM: Are diamonds distributed to designers? If so, through what channels?
BS: Rio Tinto has a fully integrated partnership from the mine to retailer because we want to provide assurance to the end-consumers that their diamonds are guaranteed to come from a specific origin. This requires a rigorous record of the journey of the diamond. Designers who are able to put such a system in place in their own distribution systems are welcome to participate.

RM: What kind of assurances does a retailer get from Rio Tinto when selling jewelry with Chain of Warranty (COW) diamonds?
BS: Each piece of jewelry is accompanied by a Certificate of Origin that identifies the diamonds from a Rio Tinto mine. This is passed onto the consumer at the point of sale.

RM: Are the diamonds sold only to specific retailers, or can any retailer participate?
BS: The program is open to those retailers who are willing to put the required traceability system in place in their own distribution network. Together with our Select Diamantaires and jewelry manufacturing partners, we develop customized programs that are meeting the needs of each retailer’s own consumer profile.

RM: How is COW used to market the jewelry?
BS: Rio Tinto currently has a project under development in Europe for diamonds of Australian origin. The mine-of-origin angle is a very powerful story that resonates with consumers; it adds a new dimension and differentiates the jewelry piece. It gives peace of mind to a growing number of consumers who are conscious of wanting to know where their diamond comes from. We have an all-encompassing approach — even the designs are inspired by Australia and its unique heritage and landscapes. The story is not only used to differentiate the product and designs; it is completely fused with the marketing.
   A full marketing package is provided, including, but not limited to, themed displays, point-of-sale materials, packaging, artwork, brochures, etc. It is truly one coherent and captivating experience for the end-consumer.
   The retailers who are able to give this experience to the consumer will leave an indelible memory in the consumer’s mind. 

Article from the Rapaport Magazine - June 2014. To subscribe click here.

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