#300 | Ari Berkovich; Diamond importer talks about engagement rings and jewelry

About this episode

Ari Berkovich, a 20-year diamond wholesaler (Cherry Pick Diamonds) originally from Israel, walks Vance through the full lifecycle of a diamond: from De Beers and Alrosa (Russian state-controlled) siteholder contracts that dominate rough supply, through mining methods (Kimberlite surfacing in South Africa vs. deep open-pit mining in Siberia visible from satellite), conflict/blood diamonds and their parallel to cobalt/lithium mining for EVs, cutting and faceting (sawing, "brooding," polishing on a moula wheel, laser scanning to maximize carat yield), to the wholesale trade itself — consignment relationships built on handshakes, thin margins (8-12% gross), and the financing risk of carrying accounts receivable. A major thread is natural vs. lab-grown diamonds: chemically and structurally near-identical, distinguishable mainly by laser inscription or trace elements (nitrogen/boron vs. metallic inclusions), with lab-grown offering younger buyers accessible price points ($3k vs $60k for comparable natural stones) amid genuine natural-diamond scarcity in fancy shapes. The conversation threads into engagement-ring psychology and tradition (the "three months' salary" DeBeers-era myth, ring-as-legal-contract nuances by state, engagement as a "testing period"), the emotional/narrative nature of value (comparing diamonds to art and even Vance's choice of a sapphire for his own wife), and closes on personal notes — Ari's move from Israel to St. Louis, the Midwest's social friendliness vs. the East Coast, and how he met his wife through a local bartender/connector.

“The beers as, as a mining company, they still have a large stake. They probably control closer to like 30% of, of the diamond rough in the world... So the beers taking siteholders and if you're a site holder, you have a contract with the beers for X amount of years and once a month you're getting a box with those crystals... if you refuse that box, basically that license... is taken away from you.”

“Every cutter's goal is number one, what is the biggest rock I can get out of that crystal?... The scanner basically tells you out of this like eight or nine or 10 karat rock, you can get a two karat pear shape, a half a karat round, a one karat emerald cut.”

“Diamonds are just not an investment... there's always gonna be a markup behind the scene that you can't get back... it's the same thing with diamonds. It's always gonna be a markup behind the scene that you can't get back.”

Key moments

• Cold open teaser on lab-grown vs. natural diamond production timelines (millions of years vs. 2-3 weeks in a reactor).
• The "two-and-a-half months' salary" engagement ring rule traced to a 1950s De Beers ad campaign, now eroded by job mobility and retail competition.
• Explanation of engagement rings as legal "conditional gifts" with state-by-state return rules if a marriage doesn't happen.
• De Beers siteholder system and Alrosa's ~20%+ share of world rough supply; sanctions on Russian diamonds since the Ukraine war.
• Conflict/blood diamonds in Angola, Sierra Leone, Botswana, and Ari's direct comparison to cobalt/lithium mining for EV batteries as an equally "not very kosher" extraction chain.
• Cutting process detail — Sarine 3D scanning, sawing (only a diamond can cut a diamond, 3-5 days to separate two pieces), faceting to optimize light return per Snell's law.
• Natural vs. lab-grown diamond identification via laser girdle inscriptions and trace-element testing (nitrogen/boron vs. metallic inclusions); lab-grown driven partly by natural fancy-shape scarcity and social-media-driven demand for larger stones.
• Wholesale trade economics — consignment on a handshake, thin 8-12% margins, and the financing/accounts-receivable risk of carrying inventory for jewelers.
• Personal story of moving from DC/Israel to St. Louis, the "small talk in the elevator" culture shock, and meeting his wife through a bartender/social connector at Cafe Napoli.

Notable quotes

“The only difference between a natural diamond and a lab grade diamond is where the rough was created... they shortcut it for about two, three weeks.”

“If you refuse that box, basically that license... is taken away from you.”

“The way we use energy for electric cars today is mined in a very similar way [as blood diamonds].”

“I can literally like leave something on consignment with my jewelers on a handshake... it's their word and it's my word and that's it.”