Six diamond dealers meet to bargain over $1.5-million worth of uncut stones. They are not in Tel Aviv or Antwerp. They are in the cloud.

In an online trading room that resembles an eBay auction, deals worth millions of dollars are sealed with a click. The button is marked ‘mazal’, Hebrew for luck, and a holdover from the old ways. But the other practices that defined the trade for generations – the handshakes, phone calls and furtive negotiations – are being challenged.

The launch last year of the Bluedax website marked the first time the $18-billion-a-year trade ventured onto the Internet. Each month, the site lists as much as $50-million worth of the gems for sale at fixed prices, and it will start auctions in November. Anyone registered can see the results, giving them real-time price data they can use as a reference for deals.

It is this transparency that sets Bluedax apart. From shabby shopfronts on Manhattan’s 47th street to the invitation-only sights at the Botswana offices of industry giant De Beers, the prices diamonds command are a closely guarded secret. Traders rely on experience, intuition and gossip to fix values for one of the best-performing commodities of the last five years. What a gem is really worth can be anybody’s guess.

“The industry needs more pricing data from producers and other parties,” says Jeremy Wrathall, head of global natural resources at investment bank Investec, in London. “We need to see better clarity, and shareholders need to see what they’re investing in.”

The impact of price clarity has the potential to spread outside the close-knit industry. Investors, bankers and even governments have found diamond pricing impenetrable, making it hard to evaluate projects, estimate returns and calculate tax receipts.

Anglo American’s De Beers, the biggest producer, does not disclose how much it sells diamonds for, or which of its mines produce the most valuable stones. While WWW International Diamond Consultants provides an index for rough diamond prices and Rapaport lists asking prices, it is a long way from the live spot prices for other commodities, such as gold, copper and even maize.

“It’s another guide for outsiders to see what’s happening in the diamond industry,” says Guy Harari, cofounder of Bluedax and a former ‘rough trader’ with Rubin Steinmetz & Sons and Graff Diamonds. “For the investment community, it gives a very good indicator of what is happening in our industry. It is the last frontier in the diamond business that is in the dark.”

Rough diamond prices have gained about 75% in the last five years as the US recovered from the financial crisis and Chinese demand increased. Prices have gained about 7.5% this year, according to WWW International Diamond Consultants, the best guide available.

Gains have been underpinned by declining output at many of the biggest mines as supplies of accessible gems near the surface are depleted. The richest mines are now decades old – De Beers opened the Orapa mine, in Botswana, in 1971 and its Jwaneng project, the largest diamond mine, in 1982.

From a mine in Southern Africa to a fiancée’s finger in Shanghai, diamonds take a tortuous path. The uncut stones are sorted into parcels based on their size, shape, quality and colour: De Beers has more than 15 000 categories. The stones are then sold on, often crisscrossing trading hubs in Antwerp, Mumbai, New York and Tel Aviv multiple times before finding a buyer.

A large share of those stones start their journey at the sights held ten times a year by De Beers. About 37% of all rough diamonds are sold by the miner, and the bulk is marketed at sales, open to about 80 buyers, at its offices in Gaborone, the capital of Botswana.

Each participant is given a box containing plastic bags filled with stones. The buyer has been invited to place an order in advance, but all he knows for sure before he opens the box is the price, a fixed sum, often in the tens of millions.

Whatever the buyer finds, it is take it or leave it. If he takes the deal, he can sell the gems on down a long line of middlemen, commanding a premium as one of the privileged sightholders who get a first bite at the apple. If he walks away, he risks losing his spot.

A De Beers spokesperson in London says the company is aware of the Bluedax trading platform and declines to comment further.

Bluedax aims to capture traders selling De Beers sight boxes and parcels from De Beers’ rivals, including Russian producer OAO Alrosa. The website, which was launched by Harari with his brother David last year, will open trading rooms to selected clients after De Beers’ diamond sale next month. It currently has about 1 000 clients registered to buy and sell, and plans to increase that number in the coming months. Prospective users must demonstrate they are financially sound and agree to pay a flat commission of 0.5% per trade.

For Bluedax, the biggest obstacle may be the industry’s ties to tradition. Between miner and jewellery retailer, the industry is impenetrable to outsiders and has been dominated by family-run firms that do business based on personal relationships.

“The mentality of the diamond business – it is 100 years old – it maybe needs more time than other industries to adapt to new ideas like this,” says Harari. “We believe that the new generation will bring this change to our industry.”