Diamond dealers shrug off "new" Russian mine

File picture taken 17 September 2006 shows a mine of Russian Alrosa company for extraction of diamond ore outside the town of Mirny.

This week, Russian state media announced the existence of a 62-mile-wide diamond deposit in Eastern Siberia. Russian scientists say the diamonds are at the bottom of 35 million-year-old meteor crater.

But the big players in the diamond business aren't all that impressed.

Yossi Malka works for the Tel Aviv Diamond Company in Portland, Oregon. Most of the inventory he works with is kept in a white plastic bucket, and a single diamond he holds could be worth over $45,000.

But Malka says he doesn't expect the news out of Siberia to deflate the price of the stones in his safe. "It's nothing new," he says. "The Russians have been mining diamonds for a long time."

In fact, this newly-discovered deposit isn't new at all: The Russians have known about it since the 1970's.  And although it was considered a state secret, it wasn't a very well kept one.

"The fact that it hadn't been made particularly public was because it wasn't that important," says Des Kilalea, a London-based analyst with the Royal Bank of Canada.

Kilalea says he's talked to nearly a dozen people who've been to the site, including geologists formerly with the South African diamond company De Beers. All of them told him same thing: the crater is filled with the type of diamonds that are used to cut and machine materials, not the kind you make earrings out of. While those gemstones cost a few thousand dollars a carat, an industrial diamond of the same size will cost you just few bucks.

Still, in boom times the demand for industrial diamonds can be enormous. Kilalea says right now the global economy isn't booming. And that might be one reason why all those diamonds are still buried in a hole in Siberia.

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