Silence Over Synthetics is Good!
By Russell Shor

Remember way back in March of 1999, when the news of HPHT-treated diamonds caused such a firestorm of outrage and prophesies of doom in the diamond industry?

Nearly five years later, in September of this year, Wired magazine published an article titled, “The Diamond Wars,” which detailed efforts by two synthetic diamond producers – Gemesis of Sarasota, Florida, and Apollo Diamonds of Boston, Massachusetts – to enter the gem market. The article detailed how these companies planned to introduce their goods into the market and the niches they wanted to fill with their products.

The press picked up on the story and, in some cases repeated Wired’s sensationalized headline ($5 a carat? – come on!). For the most part, the trade’s reaction to these reports has been muted. Unlike the pre-millennial meltdown of criticism that marked the introduction of HPHT-treated goods, the diamond industry has been relatively silent – albeit curious – about these synthetics.

Why? The reason is clear. General Electric and Lazare Kaplan International (LKI), in introducing HPHT-treated diamonds almost five years ago, announced that the (then-secret) process for improving the color of certain types of diamonds was undetectable.

Further, GE and LKI announced that there would be no disclosure of HPHT stones, other than the invoice from the special subsidiary LKI had created to market them. The furor that met this announcement left what is, in fact, a highly attractive product, stigmatized to this day.

Carter Clarke, founder of Gemesis, and Bryant Linares, president of Apollo Diamonds, on the other hand, have both pledged not only to disclose their products fully, but to work with the diamond trade to ensure that consumer confidence in the natural product is maintained. They’ve gone out of their way to cooperate, including providing samples to GIA.

“We want to become respected members of the diamond industry,” Clarke told attendees at the Rapaport International Diamond Conference in October. “We want disclosure of our products all the way down the line.”

He said his company would laser inscribe every Gemesis synthetic diamond and might also put additional identifying features on them.

Linares delivered much the same message at the conference: “We will protect prices of mined diamonds through full disclosure.”

Both believe there is a strong, competitive niche for their products.

Gemesis synthetic diamonds are predominantly fancy-color yellows manufactured by the traditional HPHT growth process, similar to that used to form diamonds in nature.  Apollo produces near-colorless to brown synthetic diamonds by the chemical vapor deposition (CVD) method, which requires much less heat and pressure.

Clarke said he’s aiming to make colored diamonds more accessible to the average consumer by pricing his goods similarly to G-VS natural goods of comparable size. He said he has research to back up his claims that consumers will accept synthetics, to the effect that 71 percent of consumers surveyed said they’d buy a synthetic diamond if they thought it was attractive.

“Basically, consumers told the polling company, CNBC, that a diamond is a diamond,” he said.

Linares, who told me he is considering pricing Apollo synthetic diamonds about 30 percent below comparable natural diamonds, believes his product is more of an add-on than a direct competitor to mined diamonds.

“There are a lot of people who can’t afford a good-quality diamond and don’t want something that’s small. We can fill that niche,” he said.

He admitted that pricing is a difficult issue yet to be finalized: “If we make them too inexpensive, consumers may get the wrong impression. These diamonds are difficult to grow. They don’t come out of a salt shaker. Also, we are very conscious that we have a responsibility to the diamond market.”

Stephen Lussier, who heads the Consumer Marketing division of the De Beers Diamond Trading Company, said his company is not concerned about the new players in the market, as long as they compete by informing consumers of exactly what they are buying.

“Our campaigns (for natural diamonds) will focus on their symbolism. People pay so much for them, they want to believe they are a treasure,” he said. “Our challenge in the future will be to ensure that diamonds retain that attribute. This will differentiate naturals from synthetics.”

Lussier’s comments imply that there is a place in our industry for attractive, well-disclosed synthetic diamonds that earn the trust of consumers, while keeping their faith in the natural material.

Apollo and Gemesis have fortunately heeded the hard lesson – that to do otherwise diminishes both sides of the market and causes consumers to simply opt out.