In 2003, Wired magazine heralded “the new diamond age,” noting that factories now can produce diamonds that are chemically identical to those produced in nature. It crowed that the stones soon would be as cheap as $5 per carat. “If you give a woman a choice between a 2.00 ct. stone and a 1.00 ct. stone and everything else is the same, including the price, what’s she gonna choose?” asked Gemesis Cultured Diamonds founder Car-ter Clarke in that article. “Does she care if it’s synthetic or not? Is anybody at a party going to walk up to her and ask, ‘Is that synthetic?’ There’s no way in hell. So I’ll bite your ass if she chooses the smaller one.”
To people in what now must be referred to as the mined industry, those were frightening words. And in the four years since, there have been many more articles along the same lines and a number of headline-making moves, including the hiring by Gemesis of De Beers veteran Joan Parker and the Gemological Institute of America’s decision to grade synthetic stones.
Yet, the lab-grown-diamond industry remains in its infancy, and many believe its threat has been greatly exaggerated. “Yes, there is more [synthetic] production,” De Beers executive director of external and corporate affairs Stephen Lussier told JCK. “But I don’t think it has impacted the diamond market in any way. Nothing has really changed. If anything, I’m more relaxed about it.”
Whatever the future holds for lab-grown stones (see sidebar, p. 79), as 2008 dawns, the threat from them is minimal. Here’s why:
They’re detectable. A recent article in Idex warned that certain stones from Boston’s Apollo Diamond Corp. had “escaped detection” from GIA and some “could not be detected.” GIA begged to differ. “Synthetics are grown in an entirely different environment than natural diamonds,” noted lab director Tom Moses. “That fundamental difference in growth allows those who have expertise in detection to exploit those growth differences. … I feel good about GIA’s ability to identify synthetics. We have not seen any synthetics that we have been unable to detect, even when that has been stated to be the case.”
Of course, detectable by GIA does not mean detectable by most jewelers. The stones are chemically identical to natural stones, which means visually identical. While there are visual clues that differentiate them from naturals, they generally require De Beers’ DiamondSure and DiamondView machines for a definitive identification.
Lussier says the ability to differentiate is the most important consideration: “If you look at the colored stones categories where synthetics have been around, the crucial issue is consumer confidence. The stronger the confidence, the stronger the business will be.”
They’re fancy colored. Almost all synthetic stones now in production are fancy colors. Gemesis produces yellow diamonds and next year will start manufacturing pinks and blues. Chatham Created Gems, whose diamonds are produced by an Asian partner, manufactures mostly pinks as well as some blues and yellows. Only Apollo, which uses a different process—chemical vapor deposition, as opposed to high pressure and temperature—is regularly producing colorless stones, mostly in the F—G/VS range and weighing about 0.33 to 0.50 cts. It, too, is branching into fancy colors.
Both Gemesis and Chatham say they can produce colorless stones, but at high price points, meaning they are not necessarily economical to produce. “They are too close [in price] to what you can buy from a natural-diamond wholesaler,” says Tom Chatham, president and chief executive officer of Chatham Created Gems. “We have such a demand for the pinks and blues, there is no sense in trying to buck the natural market in whites.”
Gemesis does plan to go into colorless stones “within a three- to five-year time frame,” executives say, but the company will produce only bigger stones, in the 4.00 to 10.00 ct. range in rough, sizes likely to be in short supply. But they won’t be “significantly cheaper” than naturals. The big problem, says Gemesis chief operating officer Clark McEwen, is that growing colorless stones requires eliminating nitrogen. But “nitrogen does all sorts of good things for the growth process,” he says. And when you remove it, diamonds grow smaller and slower.
They’re available in limited numbers. The day when a consumer will have Clarke’s choice between a natural and a synthetic remains far away. Certainly, all the producers are ramping up production. None will release production figures, but Chatham gets “up to” 1,000 cts. per month. Gemesis produces in “the tens of thousands” of carats annually and hopes to double production over the next few years. At present the company has “over 200” machines operating; a recent expansion will make room for hundreds more. Apollo produces “thousands of carats” annually and hopes to increase it to “tens of thousands,” says Bryant Linares, president and CEO of Apollo’s gemstone unit.
Those numbers are minuscule compared with mining production. “I don’t think we will ever catch up with the natural industry,” Chatham says. “That’s a billion carats a year.”
The most optimistic projection comes from Linares, who thinks Apollo can build “a mine-size capacity of a million carats of rough on an annual basis” in “less than a decade.”
They aren’t cheap. With production limited and costs high, prices are far steeper than originally predicted (never mind $5 per carat). Apollo originally said its colorless diamonds would sell for one-third less than natural diamonds. Now they sell for about 15 percent less.
The fancy colored stones being produced are significantly cheaper than natural fancy colored stones, whose prices can be astronomical. (On a tour of his factory, McEwen points to a red: “If that was a natural stone, it would be worth over a million dollars.”) But Gemesis sells yellow stones for only slightly less than the price of a comparable natural colorless stone. The pinks and blues will sell for slightly more.
“People pay $6,000 to $7,000 for our stones,” admits Gemesis president and CEO Stephen D. Lux. “They are not a cheap proposition, but they are a good value.”
Nomenclature and Other Issues
If pricing and other aspects haven’t met early expectations, it’s because the technology is still being fine-tuned. The notion of factory-produced diamonds may conjure images of an assembly line spitting them out like widgets, but manufacturers stress how unreliable their production is. “This is a natural growth process,” notes McEwen. “Just like when you grow tomatoes, they are not all the same. The qualities we produce are different, the shapes are different, just like in nature.”
“We are up against certain hurdles that the natural stone doesn’t have,” notes Chatham. “People expect us to dial in a bubble-gum pink stone and we can’t. We must have 100 shades of pink.” He adds, “We don’t make stones. We make an environment, and nature grows the crystal. It is a semi-controlled environment, but there is a lot going on that we don’t know.”
So, with the nightmare scenario of bucketsful of undetectable lab-grown discount diamonds not likely to unfold anytime soon, is the diamond industry ready to embrace this new category?
Chatham, who has fought his share of battles over his created gemstones, says he’s finding far more acceptance this time around. “The resistance is totally different than it was from ruby, emerald, or sapphire,” he says. “People totally understand what this is.”
Lux says GIA’s decision to issue reports for the stones gave the product “the biggest boost” it ever had. “We look at it as a watershed event,” he says. “It took a lot of resistance out of the trade. When the respected GIA came out and classified it as a diamond, it told the story for us.”
Even so, tension remains between the mined and created sectors. The mined sector isn’t happy that almost every article about synthetics refers to them as an “ethical alternative” to natural diamonds, since they avoid the blood diamond and environmental issues—even though no established human rights or environmental group has endorsed that position.
The diamond growers insist that this talk isn’t coming from them. Gemesis has even contractually forbidden its customers from discussing those topics (though designer Taryn Rose, who uses Gemesis stones in her new jewelry line, has brought them up numerous times). The Cultured Diamond Foundation, which Gemesis helped found, puts similar requirements on its members. “We want to take the high road, talking about the positives of our product and not the negatives of someone else’s,” says Lux.
The other two producers also say they’re not promoting these issues but admit they are driving much of their sales. “It’s not something we like to take advantage of, but there are companies that we sell to that do it on the premise that it’s a green product,” Chatham says. “I can’t say anything personally, because every chemical we use comes out of the ground. I tell that to them, but they still think it’s better than these big holes in Africa. We just go along with it.”
Then there is the seemingly endless debate over nomenclature. The mined industry opposes the word cultured, and Jewelers Vigilance Committee recently filed a petition—endorsed by other diamond and jewelry associations—with the Federal Trade Commission to prevent its use. It has even hired a top lobbying firm to press its case.
The diamond growers say they are not worried about the FTC’s decision, noting they use both cultured and other FTC-approved words such as lab-grown and man-made. “We would prefer to use the word cultured, but it’s not essential to our business,” says Lux.
Chatham says his father long ago signed a cease-and-desist order concerning the word cultured, so he doesn’t use it. “I have already put millions into the word created,” he says. But he calls the JVC petition “protectionism for the natural diamond industry.” He adds, “Why doesn’t the JVC go after all of these cubic zirconia sellers selling their product as synthetic?”
Meanwhile, those in the lab-grown camp have their own nomenclature issues. They are irritated that the “natural” industry keeps referring to their stones as synthetic—a phrase they think consumers hear as fake. There was a time when the diamond associations wanted to make the word mandatory, and GIA’s original synthetic reports used that term only. Both plans have been dropped, but the word still rankles. “Synthetic is so ridiculous,” says Linares. “My son’s got a football. It says synthetic leather. It’s vinyl. It’s purposely misleading.”
They also dislike De Beers’ statements, such as the one it recently sent to JCK, which compared lab-grown diamonds to “cubic zirconia and moissanite.”
Whatever the hard feelings, the producers say they shouldn’t be viewed as antagonists, and Gemesis notes that its jewelry often uses natural stones as accents. “We have no interest in bringing out something that will undercut the natural market,” says McEwen. “If it goes down, we go down. We have been careful to be part of this industry, and not adversarial to it.”
He, like other commentators, thinks synthetics production will supplement natural during expected shortages in the future. “The Argyle Mine has only 10 years left,” McEwen notes. “After that, a majority of pinks will be gone.”
So, can the two sectors learn to live together—like the lab-grown and natural diamonds in a Gemesis ring? “We consider ourselves part of the diamond industry,” says Lux. “Not the cultured diamond industry—the diamond industry.”
|
The FutureMan-made diamonds may not pose a threat now, but will they in the future?
At some point, mass-produced machine-manufactured diamonds will come on the market. But no one knows when. Some predict five years. Some think decades.
When the day comes, De Beers executives predict, the price will decline rapidly, since that’s what the price of new technology (like iPods) tends to do. “That’s the crucial issue,” says De Beers director of external and corporate affairs Stephen Lussier. “One product [the naturals] has long-term value, the other doesn’t.”
But people on the lab-grown side say they don’t expect the price to fall—nor do they want it to. “The machinery involved is very expensive and very big,” notes Tom Chatham, president and chief executive officer of Chatham Created Gems.
That machinery could change. Recently the Carnegie Institution announced a way to grow diamonds through microwave technology, which it claims can produce diamonds “in days.” But the current producers say they’ve investigated the alternative processes and are sticking with what they have.
Then there’s De Beers. The company’s Gem Defensive laboratories have been researching—and producing—synthetics for decades. It owns a major producer of industrial synthetics, Element Six. Journalist Chaim Even-Zohar has suggested that De Beers will start including lab-grown rough in its sightboxes by 2011—something De Beers has denied in the past.
What keeps this field dynamic is that industrial synthetic diamonds have widespread technical applications, so there is significant financial incentive in developing cheaper and better methods. Even Apollo is focused more on the industrial market than the gem market. “The gem market is just the tip of the iceberg,” says Chuck Meyer, president of Cultured Diamond Co., a consultant to the industry, a board advisor at Apollo, and a former vice president at Gemesis.
He is more certain than others that big changes are coming. “In a technologically driven area, things don’t mature arithmetically,” Meyer notes. “They grow exponentially.”
Adds Bryant Linares, president and CEO of Apollo’s gemstone unit: “There is a desire to crack this code. We are not the only smart people. Someone is going to figure out how to do it.” |
The Reaction at RetailThe media are fascinated by lab-grown diamonds, and so, apparently, are customers. JCK spoke to numerous retailers carrying the stones, and their verdict was generally positive. Among their observations:
People often search specifically for synthetic diamonds. Bostonian Jewelers, Boston, is the only store in the world selling Apollo’s colorless lab-grown diamonds, and a lot of people find their store through the Internet, says store manager Alexandria Matossian. “We have people that fly in just to see them before they make their purchase,” she says.
Social issues matter. Even though the synthetics companies insist they are not promoting social or environmental issues, retailers say it’s a big reason customers are buying the stones. “A lot of people just feel more comfortable knowing it can’t be a blood diamond,” says Tania Qovadis, owner of Qovadis Jewelry in Los Angeles.
People love the technology. Ronnie Heller, president of Barons, a three-store California chain, notes, “The technology is fascinating to people—how it is grown with a seed, yet it’s still a diamond and does everything you want it to do.”
That angle is especially big in Boston, a high-tech hub. “When someone is in the semiconductor field, they know the technology,” says Matossian. “They love to see diamonds made with the technology they’ve been working with.”
They do best with colored diamond fans. “If someone is predisposed to yellow diamonds, they are very receptive to the whole idea,” notes Matt Meis, a San Diego designer who bills himself as The Wandering Jeweler, and sells jewelry from Pintura. “My clients who want a lab-grown intense yellow don’t have $15,000 to $20,000 to spend on the naturals.”
Price is not a huge factor. Monteca Confer-Beisel, manager of Confer’s Jewelers in Bellefonte, Pa., says the product’s look is a far bigger selling point. But when she tells customers the pink Chatham stone they are looking at “would go for $100,000 as a natural, they love that—particularly the women. Because who’s to know?”
Nevertheless, the stones cost more than most people expect. “Since it’s man-made, they think that this stuff should be really cheap,” Meis says.
One enduring problem is the Wired article from 2003, whose cover proclaimed the diamonds would be as cheap as $5 a carat. “That keeps popping up every time someone does a search,” says Matossian.
There is very little consumer resistance to them. Larry Blauweiss, of Fifth Avenue Designs, in Denver, “can’t say he never” had people shy away from created stones, but he says the overall response is positive. “When we explain to them it is a real diamond, it’s just grown in a lab, the acceptance is very strong.” He adds that having GIA reports “gives a lot of credibility to the product.”
Confers-Beisel likewise has received far fewer objections than she expected. “Nobody cares that they are created,” she says. “Some people don’t even ask what it means.”
Because they’re mostly fancy colors, they are primarily used in fashion pieces. “We wouldn’t sell it in an engagement ring,” says Confers-Beisel. “Men usually buy those, and they don’t like to buy created anything. It takes the romance out of it for guys. It’s like with moissanite—guys never want to touch it, but women will buy it for themselves.”
Despite occasional media coverage, some retailers feel consumers are not educated about the product, and hope for more publicity. That’s beginning to happen—Gemesis will have a 10-page spread in Town & Country this month.
Even so, the most frequent comment from retailers is that they want more stones, in bigger sizes, and in more familiar colors. “If the product was available in white stones,” says Blauweiss, “I have no doubt it would be going through the roof.” |
Totul despre diamante 