With more and more companies producing colorless diamonds, synthetic diamond manufacturers hope their industry is entering a new phase.
Since 1993, the industry has heard periodic announcements about synthetic diamonds coming to the market and rocking the business to its core. But two decades later, precious few of those predictions have come to fruition.
Now, however, yet another announcement about the coming wave of synthetics suggests this time may be different.
In November 2010, the Gemesis Diamond Co. announced it was planning to sell lab-grown colorless diamonds, produced by the chemical vapor deposition (CVD) method, over the Internet. As has been the pattern, launching the product took longer than expected. In February the company finally went online at Gemesis.com, offering both yellow and colorless lab-grown gems for sale to the public.
And while Gemesis throwing open its doors is indeed something of a milestone, these gems are no threat to the natural stone market—at least when judged by volume. Millions of carats of gem diamonds are produced by mines each year, in all ranges, colors, and sizes. By contrast, Gemesis’ inventory consists of 3,235 colorless diamonds and 832 fancy yellows.
Most of the listed stones are less than 1 ct.; the company’s largest listed colorless diamond is 1.20 cts. (CVD stones tend to grow flat, making it difficult to create large ones.) Most of the clarity grades are VS and above, and the colors tend to fall in the G to I range. Still, Gemesis CEO Stephen Lux tells JCK people shouldn’t underestimate his company’s achievement.
“The color is a vast improvement,” he says. “And having 3,000 colorless diamonds and almost 1,000 yellow diamonds is a pretty good start.” Future production, he adds, “depends on demand.”
And while the Gemesis stones do cost less than naturals—in fact, they’re priced more aggressively than other diamond dealers were expecting—the differential isn’t huge, and hardly the kind of thing that could crash the market. Gemesis’ biggest stone, a 1.20 ct. J VVS2 round with very good cut and an International Gemological Institute report, retails for $5,538.96. A similar Gemological Institute of America-certed stone was listed on JamesAllen.com for $6,916. The price difference: 25 percent.
Most of the colorless diamonds Gemesis is producing are type IIa diamonds, which are typically brown—raising the possibility that, in addition to being CVD-manufactured, the diamonds have been treated by the high-pressure high-temperature (HPHT) method. Lux, who has moved production from Sarasota, Fla., to a variety of places including Malaysia, declined comment, citing his proprietary technology.
But GIA West Coast director of identification services Shane McClure says CVD-grown stones “are typically darker than” the ones grown by HPHT, and therefore could require additional treatment.
(All of which raises an interesting question: If a diamond is CVD-grown and HPHT-treated, does the HPHT treatment need to be disclosed, as it does for natural stones? Jewelers Vigilance Committee president and CEO Cecilia Gardner says the Federal Trade Commission’s Guides for the Jewelry Industry do not address the issue. “I do think it is something that ought to be disclosed, however, since the treatment would probably have an effect on value,” she adds.)
Courtesy of Gemesis Diamond Company
Drop diamond earrings in 18k white gold with 1.41 cts. t.w. lab-created diamonds; $2,724.25; Gemesis, Sarasota, Fla.;
Another potential point of contention with members of the traditional diamond industry: Gemesis’ website plays up the stones’ “socially and ecologically responsible point of origin.”
“We are just saying that if this issue is important to you, we are the people to come to,” Lux says.
Lux says that while the company is now selling to the public online, it still hopes to wholesale as well, and that its gems are now offered at the Southern California chain Robbins Brothers. (The company tells JCK it’s too early to comment on sales.)
Meanwhile, the other companies in this space say they, too, are boosting their production of colorless stones. Eric Franklin, president of Greenville, S.C.–based D.NEA, which recently set up the world’s first synthetic diamond retail store, says the company has produced “40 to 50 whites and has a lot more coming,” although for now most of his inventory remains blue. He says his colorless stones are all produced with the HPHT method and are untreated, with sizes ranging from 10 points to about three-quarters of a carat, and colors in the D to H range. “Right now the majority of what we are producing is whites,” he says. “Whites have always been the holy grail.”
Courtesy of Gemesis Diamond Company
Gemesis vintage-style three-stone wedding ring in 18k white gold with 0.20 cts. t.w. lab-created diamonds; $1,643.15 (setting only)
Another synthetic contender is publicly listed Scio Diamond, also based in Greenville (though it is has no connection to D.NEA). CEO Joseph Lancia says his company just received 10 diamond-growing machines and hopes to begin producing gems soon, mostly “light colorless” stones and “bubblegum pinks.”
“I won’t give you the exact amount, but it’s north of 500,” says Lancia, adding that his is the only company that continues to produce diamonds in the United States. He admits Scio is still getting started, and hasn’t really thought about how the gems will be marketed. (As with Apollo, the Boston-based company whose assets Scio purchased, Scio sees greater potential in producing diamonds for industrial purposes.)
Tom Chatham, president and CEO of San Francisco–based Chatham Created Gems & Diamonds, adds that a lot of diamond creation is happening under the radar. “There have always been a lot of people in Russia growing diamonds, and those presses are still around,” he says. “They work on LinkedIn, they work on Facebook, they don’t have websites of their own.”
The sector’s biggest problem, Chatham says, remains the high cost of production. “It’s a multimillion dollar a year business,” he says. “It’s just very expensive to be in. We have sold millions of dollars of product, but it’s cost us millions as well.”
Still, Chatham, whose company pioneered lab-grown colored stones, remains sanguine about the future of the synthetic diamond market. “People are talking about shortages of the naturals in the next 30 years,” he says. “I think eventually the right people will get together with the right capital and make it into a real business.”