Will Synthetic Diamonds Cause a Crisis of Confidence?

We have gotten tons of feedback on yesterday’s story on synthetic diamonds appearing on the market undisclosed. While the International Gemological Institute’s lab alert has certainly caused plenty of alarm, it is important that people not panic. Synthetic diamonds are still available in only small numbers when compared to naturals. 

Even so, this is a serious problem, with huge implications for consumer confidence. People who sell synthetic diamonds as natural are committing fraud, and should be treated as such. Gemesis’ lab-grown gems sell for about 20 to 30 percent less than naturals; depending on the supplier, the price differential might be even bigger than that.  

In the IGI instance, the lab knows the name of the dealer who sent them the stones, and presumably the name of the person he bought them from. If we can identify the guilty party, that person’s name needs to be reported to law enforcement, to industry organizations, and to the various labs. Companies who commit this kind of mispresentation have no place in our industry. (One thought: the IGI alert was a welcome example of intra-lab cooperation. Could the labs set up a system where a person who is banned from one lab—for trying to misrepresent/bribe/what have you—then be banned from all of them? After all, why should someone who pulls a fraud at one lab then be free to do it at another one?)

If any aspect of this should make us happy, it’s this: The system worked. The diamonds were submitted for certification, and IGI caught them. If you are a jeweler who wants to avoid these stones, the best move may be to send as many stones as possible to labs, although this is not always cost-effective for smaller stones. And indeed, it looks like melee may be the big problem here. Gemesis has already said it won’t inscribe melee. At last year’s GIA Symposium, Martin Rapaport said he strongly suspected that jewelry sold by a leading retailer contained yellow side stones that weren’t natural. GIA has even looked into developing a synthetic melee detector—but we have no assurance one will ever be developed.

So what to do? The ultimate solution is a “black box” that would let retailers distinguish a synthetic from a natural. De Beers has such a device, but for the time being it’s too expensive and complex to be used by most jewelers. It’s possible one may be developed in the future. But we are not there yet.

In the meantime, jewelers should only buy from trustworthy sources. (This episode may give a boost to chain-of-custody schemes like the Responsible Jewellery Council’s, even though they weren’t really set up for this issue.) They need to be wary of deals that appear to be too good to be true. And everyone needs to study the latest gemology. It’s very difficult for jewelers and dealers to identify these stones, but there are features that can indicate the need for further evaluation. We hope to cover them in the next few days.

There is nothing wrong with lab-grown gems. Indeed, it’s quite likely some consumers will prefer them to the natural. The key is, as always, that they must be properly identified. So far, most of the companies selling these gems have publicly committed to disclosure. But De Beers’ alert to the trade last week seemed to point the finger at Gemesis, noting “the combination of characteristics [seen in the IGI stones] is strikingly similar to that reported by the GIA for 16 CVD synthetics received from Gemesis Corporation.”

Gemesis has, in turn, strongly denied it is the source of the gems in question. Says a statement from CEO Stephen Lux:

There are several other companies that are practicing the CVD technology, with some scale as to have capability for the few hundred diamonds that most unfortunately have been sold inappropriately.  The recent two-carat lab-created submission to GIA India (also not from Gemesis) is evidence of others’ capabilities. Gemesis can assure the industry with 100 percent certainty it has not been involved in selling its diamonds as mined, and the undisclosed diamonds referenced in the DTC and IGI alerts are not Gemesis diamonds.   

Lux’s statement indicates what should be obvious: It is in everyone’s interest—including the makers of lab-grown diamonds—for them to be sold properly. Clearly, someone along the chain thought they could violate the rules and make a quick buck. Fortunately, this time, they don’t seem to have gotten away with it. We all need to be on high alert to make sure they never do. 

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JCK News Director

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