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Un-Natural Threat?
Are synthetic diamond-makers manufacturing a growing problem for natural diamond industry?
By: Diamond World News Service
Jun 14 2013 5:36PM
Reference: 7891  

To some extent, the global diamond industry has closed its eyes to the threat of synthetic or man-made diamonds. The industry has, in a sense, hoped that they would almost disappear on their own. But some analysts suggest that hundreds of millions of dollars of polished synthetics are entering the pipeline every year, and that new technology means the threat is growing, not receding. Albert Robinson and Kunjal Karaniya spoke to few industry leaders around the globe to know more in detail about this growing danger for the natural diamond industry.

How big a threat to the 'natural' diamond industry is the manufacture of synthetic diamonds? Until recent years, most industry leaders have been satisfied with a standard reply along the lines that as long as the stones are clearly disclosed there is no problem. But what if the diamonds are not disclosed – as has been the case on several occasions in the past year alone? Meanwhile, other global diamond industry leaders say that it is unlikely that a woman is going to be happy wearing an engagement or wedding ring that she knows is set with a synthetic stone. "Can you imagine a man proposing marriage and offering a ring set with a diamond that is not natural?" asks a former senior Gems and Jewellery Export Promotion Council officer. But if diamond prices rise sharply, as is forecast to be the case according to a range of industry predictions, due to flat or declining supply and rising demand from Asian markets in the coming five years, what effect will that have on consumer choices? "The industry does not really like to look too deeply at this problem," said a former World Federation of Diamond Bourses president. "But if the prices of natural diamonds rise due to strong Asian demand and insufficient supply, will there be an opportunity for synthetics to make a splash? I am afraid that this could, indeed, happen in the not too distant future. "This relates to diamonds that are disclosed and sold as such. But what happens if synthetic diamonds enter the pipeline undisclosed and are set in jewelry and only discovered to be non-natural by consumers who have bought the jewelry? That could be a big blow to consumer confidence. Diamond jewelry sales are already struggling in the battle against consumer goods, from smartphones and tablets to designer label clothes and accessories and luxury holidays. Undisclosed synthetics would be a terrible blow," he added. To this, Varda Shine, Executive Vice-President, De Beers Global Sightholder Sales expressed, “I do not think so that synthetic diamonds are any threat. The diamond is a symbol of love and consumers believe in natural love; thus, they will maintain buying natural diamonds. Second, synthetic diamonds are manufactured based on a technology which gets outdated after a specific period of time. A natural diamond is forever.” DTC does not view the synthetic diamonds as a threat to natural diamonds, but emphasised that the detection and proper disclosure of synthetic diamonds are necessary for these products to become accepted among the gemstones that are for sale on the market. She further added, “If they are correctly positioned in the market for example Swarovski did, they can build their position, but they can never replace real diamonds. But unethical behavior is a problem; hence industry needs to make sure that the purity is maintained.”

Industry leaders spotlight rising dangers of synthetics
The danger posed by synthetic diamonds has come under the spotlight in recent weeks. Tom Moses, senior vice-president of the Gemological Institute of America, says that synthetic diamonds are increasingly penetrating the trade in natural diamonds. "Just a few months ago, we saw an attempted fraud on a large scale using synthetic stones," he said. Synthetic diamonds have been around since the 1950s in different industries as well as for research purposes, he explained. The machinery used to make synthetic stones had not changed a great deal in the past several decades and is based on the same technology that has been in place since the 1970s, he added. "The most worrying aspect is color treatment of synthetics. There is now a separate market dealing in blue synthetic diamonds. Synthetic diamond manufacturers manage to create color diamonds relatively easily and through an extra process after they have been made it create difficulties in identifying them." He said that mixing natural and synthetic diamonds in the same parcels created a challenge for the GIA's labs around the world. Moses explained about the latest ways of identifying synthetics, the type of such stones available on the market, and the cooperation between the GIA and De Beers on the issue. "De Beers is a strong partner of ours and we have been working together for many years. They have built up a huge knowledge base on synthetics that is shared with us." There are three types of synthetics, he explained. There is High Pressure-High Temperature (HPHT) created stones made in a process that replicates the conditions in the ground when natural diamonds are formed. There are Chemical Vapor Deposition (CVD), and the relatively new NPD process which makes synthetics via nanotechnology and has been developed in Japan for industry and research purposes. CVD-created diamonds have been undergoing considerable improvements in recent years, Moses said. However there are problems in the layer process of making them that cannot yet be dealt with by the manufacturers and that provide signs of their origin. "CVD diamonds are identifiable due to their recognizable patterns of growth," he said.

Although recognizing the dangers, Moses is nonetheless relatively optimistic on the issue of synthetics: "The GIA was founded in order to ensure consumer confidence since customers spend significant sums on diamonds. Our methods of identifying synthetics are continuously becoming more sophisticated. There are permanent characteristics in all the different kinds of synthetics stones, and our labs do great work to ensure consumer confidence is not affected." He added that the GIA is working on an identification kit for diamond companies regarding synthetics that will be available for diamond firms around the world and available for purchase during the next two years.

$500 million of synthetic polished diamonds in 2012
Meanwhile, Diamond Intelligence Briefs publisher Chaim Even-Zohar estimates that around $500 million of polished synthetic diamonds entered the diamond pipeline in 2012 out of a total of $22 billion of polished goods. Even-Zohar, who also publishes a well-known annual diamond pipeline chart, included synthetics for the first time in his recently published chart for 2012. "You have not heard about this because nobody is telling you about it," he said. "The synthetic diamond manufacturers have substantially increased their production with the use of hundreds of diamond-growing machines.

He said a "perfect" system has been developed where diamonds are produced using the Chemical Vapor Deposition (CVD) and then the color is improved using the High Pressure-High Temperature (HPHT) system. "According to estimates, in Surat, 5-7 percent of diamonds produced that weigh less than one point are synthetics."

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