Millennium Stones a Success

De Beers says it’s pleased with sales of its limited-edition Millennium diamonds, its first “branded” product marketed internationally.

“It created premiums and good margins for those involved in the distribution,” reports Derek Palmer, De Beers marketing director. While some dealers told JCK the stones sold better in Asia and Europe than in the United States, Palmer maintains that sales were solid in all regions. “We weren’t sure if they were going to celebrate the millennium in Japan, but the market there is driven by brands, and they took to it quite strongly,” he says.

Still, there were snags—mainly delays in delivering marketing materials and packaging. “This was all a learning process,” Palmer says. “When we started the project, we had a modest packaging concept. Then we got a little more ambitious and would have liked more time. As it was, we got the packaging out by August, which was something of a miracle.”

De Beers rejected some diamonds because the stones weren’t cut to exact “Millennium” specifications. “We had a high standard for cut, and perhaps it took a little while for sightholders to see that,” Palmer says.

Sightholders had less enthusiasm for De Beers’ other millennium product, its “time capsule,” meant to hold loose stones (non-branded) for future generations. Some grumbled they bought it only to please De Beers. But Palmer says, “From our standpoint, the capsule was hugely successful. We sold 100,000 to sightholders. They were very satisfied with it.”

So what’s next for branding? A pilot program to test sales of non-millennium De Beers branded diamonds continues at several English retailers, but there are no plans yet to expand the effort. “We’re taking a breather to see what the next step might be,” Palmer says.—Rob Bates

De Beers’ rough diamond sales set a record in 1999, topping $5 billion for the first time. The overall tally, $5.2 billion, represented a 57% increase over 1998’s $3.3 billion, an 11-year low. Sales for the second half of 1999 showed a staggering 70% jump.

“It’s been a pretty extraordinary year,” managing director Gary Ralfe said at a London news conference. “The market is so changed from the near despair of last year.”

De Beers credited the healthy results in part to continued strength of the American market, which now consumes 46% of the world’s diamonds. U.S. diamond jewelry sales figures for the first 10 months of 1999 were 10% higher than 1998’s numbers.

Lower prices—mostly on high-clarity diamonds popular in Asia and some fancy shapes—also helped boost sales. “Given the weak state of the market a year ago, we discounted prices in order to get the boxes moving again and to ensure there was an attractive margin of profit for our clients,” Ralfe says. But De Beers says there’s no need to worry about a continued drop in prices. “It’s important for the consumer to know that [over the long term] diamond prices go up,” Ralfe says. “We don’t want to harm the reputation of diamonds as a store of value.”—Rob Bates

GIA Lab Again Hits Christmas Snag

A substantial backlog at the Gemological Institute of America’s grading lab once again put a crimp in dealers’ holiday seasons. Dealers say the delays were the worst in two years and exacerbated the Christmas season’s shortage of better-quality diamonds. “It’s terrible,” says one dealer. “You have goods tied up, and it’s money going to waste.”

Gem Trade Lab CEO Tom Yonelunas says the delay “depended on the services. It ranged from two to three weeks on most things, and on some odd items perhaps longer.” He attributes the delays to the “growth of the Diamond Dossier, the inscription service, the millennium opportunity, and increased demand for our services. The combination of these factors placed a great burden on us.” Yonelunas says the lab hired 18 extra graders and worked around the clock to catch up.—Rob Bates

All the News That’s Not Fit to Print

Nearly every daily newspaper belongs to the Associated Press wire service, so when AP sends out a story about diamonds, you should know about it. Particularly, you should pay attention when the story seems sure to cause confusion.

Such was the case with a recent article entitled “Some Tips for Jewelry Shoppers,” in which writer Joyce Rosenberg tries unsuccessfully to educate readers about diamonds. “You could be paying a lot of money for a piece of jewelry without knowing much about it,” she warns.

Rosenberg should have heeded her own advice and learned more about her subject. “While many people prize a diamond for its size,” she notes, “a stone’s value is also determined by its color and clarity.” Partly right, but where is the most important C, the one for cut? She completely overlooks it.

In fact, Rosenberg thinks only color affects a diamond’s quality. “The highest quality diamonds are colorless,” she claims. True enough for color, but for highest quality, one has to consider clarity and cut, too. And here is how she tells consumers about the Gemological Institute of America’s color-grading scale: “Colorless diamonds are given a grade of D. Diamonds with more color are graded E and so on through the alphabet.”

Rosenberg’s explanation of clarity could have used some of its own. “Clarity is graded on a different kind of letter scale than color, with diamonds of lesser clarity given ratings beginning with I, and those with higher quality given ratings beginning with VVS. In between are diamonds rated VS.” Rosenberg’s failure to explain what the letters mean is bound to confuse her readers, especially if they compare these grades with the alphabetical color scale. And what happened to Flawless, Internally Flawless, and the entire SI range? Rosenberg ignores them all.

You can’t control what the AP prints, but it might be wise to pen a more helpful article for your local newspaper. That way your customers could actually learn something.—Gary Roskin, G.G., FGA

Pegasus Mentioned In a Second Newspaper Article

For the second time in as many months, a major New York newspaper has written about the Pegasus process.

The article, “Diamond Buyers Wonder: Is it Real or Treated? And Does It Matter?,” appeared in the business section of the Sunday New York Times in December. The Sunday Times has a nationwide circulation.

The lengthy article said there’s no sure way to tell if a stone has been GE-treated but added, “GE and its partner, Lazare Kaplan, say they make sure that stones are properly marked, described, and sold.” (The writer didn’t mention that the markings can be—and have been—removed.) The piece noted that the stones are being test-marketed as “Monarch” diamonds and included an interview with Susan Jacques, head of Borsheim’s in Omaha, Neb., the first store to sell Pegasus diamonds.

The Times also discussed fracture filling, laser-drilling, and the issue of colored gemstone treatments. Gemologist-author Antoinette Matlins recommended that consumers ask their jeweler if a stone has been treated and then back that up with an independent appraisal.

In November, the New York Post became the first non-trade publication to report on the Pegasus process.—Rob Bates

Treated Green Diamonds—Who Saw Them First?

As we reported last month, Novatek, the newest player in the diamond technology arena, can transform brown “champagne” diamonds into intense yellow-green fancies. The company, based in Provo, Utah, uses high temperature and pressure in a process similar to the one General Electric uses for Lazare Kaplan’s Pegasus diamonds. Members of the New York-based European Gemological Laboratory recently held a press conference to discuss the Novatek diamonds they’d examined—and to introduce the jewelry industry to Novatek.

For more than a decade, Novatek has been treating industrial diamonds, both natural and synthetic, with heat and pressure to create a better product. Production of the new fancies represents a continuation of the work of Dr. H. Tracy Hall, chairman of Novatek, who invented the process that makes diamond from carbon while he was working for General Electric in 1954. Hall built the high-pressure/hightemperature equipment to manufacture synthetic diamond, polycrystalline diamond, and other “super materials.”

Hall left GE in 1955 to become a professor of chemistry and the director of research at Brigham Young University in Salt Lake City. It was around this time that he invented a new tetrahedral and cubic press, allowing him to continue his work in the emerging super materials industry.

Novatek was founded in 1985 as a consulting company specializing in super materials applications, including use of synthetic diamond. In 1980, it began producing synthetic diamond products, such as diamond-enhanced drill bits and diamond bearings.

H. Tracy Hall’s son David founded Novatek and now is chairman and CEO. He’s focusing on improving the high-pressure technology his father created. David’s brother Tracy Jr., also with Novatek, has more than 16 years’ experience with high-temperature/high-pressure technology. Novatek, under the name NovaDiamond, uses the same equipment to change the color of natural diamonds.

The Gemological Institute of America’s Gem Trade Laboratory (GTL) boasts it can identify NovaDiamond stones. Says GIA president William Boyajian, “These treated yellow-green diamonds are usually straightforward to identify by a combination of their gemological properties and spectroscopic features.” Boyajian says GTL spotted similarly treated diamonds, assumed to be produced by Russian laboratories, as long ago as 1966.

But according to C.R. “Cap” Beesley, president of the American Gemological Laboratories in New York, “Considerable work will be necessary to definitively address all the potential variations on this emerging treatment technology.” Beesley has been working closely with a Russian research facility that uses high temperatures and pressure to change brownish yellow/orange synthetic diamonds to fancy intense colors, greatly diminishing the brown component. “We’ve determined that a significant population of diamonds can be radically altered in color by using existing HTP [high-temperature and – pressure] techniques,” Beesley says.

Initial experiments for Beesley in Russia early in 1999 produced fancy greenish yellow colors from 90% of the brown diamonds processed. “The next wave of investigation will involve the generation of pinks, reds, and blues, based on modifications to existing treatment techniques,” says Beesley.

According to Boyajian, GE researchers have shown GIA yellow-green diamonds treated by a process that may be similar to the one used by Novatek and reported by EGL. “We are currently studying these Novatek diamonds and believe, on the basis of observations to date, they’ll be readily identifiable,” he says.

But so far, no identification characteristics have been disclosed. Beesley says his lab has offered to share information with GIA, but it’s been “unresponsive.” Beesley believes that “the complexity of current gemological challenges is beyond the capacity of any single research organization.” GIA had no comment.

Is there a chance that the GE and Novatek treatments will be confused? Not according to GIA. “At first there was confusion,” writes GIA in its electronic newsletter, GIA Insider. “It is our understanding, however, that diamonds that undergo the GE de-colorization process are almost exclusively Type IIa. The rough used by Novatek that we have observed is mostly Type Ia natural brown diamond material.”

The knowledge of such a treatment goes back to at least 1984, when Gemstone Enhancement was published by Kurt Nassau, a renowned gemologist and former research scientist for Bell Laboratories. In the book, Nassau wrote, “Heating under high pressure for just a minute or so to temperatures near 2000C has been shown to change type Ia diamonds to a bright yellow.” Nassau added, “The possible commercial significance of these experiments regarding the decolorization of natural or synthetic yellow diamonds is not yet clear.” That significance has since become much clearer.

The science of diamond color may revolve around the issue of which came first, colorless or colored. Has nature “treated” colorless diamonds all along? According to Hall, “It may be that all diamond starts out with color centers and then over time the color gets annealed out. Color may be the original state and whiteness just a result of annealing over time.” While NovaDiamond has agreed to use the word “enhanced” to describe the coloring process, Hall states that the word “is not a good description of what we have observed. The more we experiment with this process, the more we are realizing that all diamond was probably golden-green at one time and became white due to loss of color centers over time.”—Gary Roskin, G.G., FGA

EGL USA and NovaDiamond Announce New Cert

The European Gemological Laboratory USA has developed a new diamond grading certificate specifically for NovaDiamond’s fancies (see item above).

The EGL Colored Diamond Analysis Report will provide disclosure along with grading information. NovaDiamond color grades will be described with currently accepted nomenclature for fancy colored diamonds and substantiated by a color photograph as well as a photomicrograph showing a unique laser-inscribed number with the NovaDiamond name and EGL USA report number on the girdle.

Reports will include a spectrophotometer graph indicating the absence of radiation treatment. All NovaDiamonds will be analyzed by EGL through a custom-built SAS 2000 spectrophotometer along with an FTIR infrared spectrophotometer. EGL gemologists Branko Deljanin and Gregory Sherman will conduct seminars about the process this year, beginning in Tucson. For information, call (212) 730-7380, Ext. 214.—Gary Roskin, G.G., FGA

Mayor Giuliani Visits Diamond Dealers Club

New York City mayor Rudolph W. Giuliani recently visited the New York Diamond Dealers Club, where he asked members for support in his run for the U.S. Senate. Giuliani said he wants to assist the diamond industry but wanted a better understanding of what its needs are. DDC board members asked him about ways to increase New York manufacturing, De Beers’ awkward antitrust situation, and pending legislation in Congress that would require country-of-origin certificates for diamonds. Giuliani said he didn’t know enough about any of the subjects to comment.—Rob Bates

DPS Launches Trade Web Site

The Diamond Promotion Service, the retail education arm of the De Beers account at J. Walter Thompson, has launched a trade Web site (www.dps.org) featuring news about De Beers’ advertising campaigns and product design initiatives. The site includes a list of manufacturers listed in De Beers ads, media schedules for De Beers advertising, and glimpses of De Beers’ current campaigns. The trade-only site is password protected using the Trade Lock system.