During the recent Basel Fair, I was asked to participate in a panel discussion sponsored by HRD on Diamond Grading reports: their history and use, prospects for the future, coordination with other laboratories, and challenges before us. The following represents my prepared remarks on the subject, which I thought might be of interest to our readers.

GIA began teaching its new diamond grading system nearly half a century ago, in 1953. The system gave the Institute’s students, especially retailers, the means to consistently and reliably assess quality in diamonds and to evaluate the goods of various suppliers. To ensure that they were grading accurately, students began to request that GIA instructors check their work in the field. This led to the need – and the opportunity – to develop a diamond grading report that would verify grading done by students and alumni and, ultimately, serve the trade at large. Thus, what began as an educational course premiered by Richard Liddicoat and his team in the early 1950s, led to a diamond grading report for the entire industry and, eventually, to GIA’s internationally recognized diamond grading service.

In the early years, demand for grading reports was sporadic. GIA Diamond Grading Reports were used primarily for high-end goods for which an independent, third-party assessment added confidence and value to a purchase. Acceptance of grading reports increased gradually through the 1960s, and then began to take off rapidly during the diamond investment boom of the late 1970s. When the bottom fell out of the market by 1981, it took several years and a buoyant Japanese yen to bring back heavy demand for diamonds by 1986. Since then, our laboratory has experienced steady growth in demand for these independent services. Headquartered in New York, today the GIA Gem Trade Laboratory alone has more than 250 diamond graders and approximately 425 employees overall, including some 30 gem identification and research professionals. Every year we grade hundreds of thousands of diamonds at a total estimated wholesale value in excess of $5 billion. I’m sure that we grade most of the finer diamonds offered in the marketplace, regardless of size, and probably more than 90% of the finest fancy color diamonds.

I expect demand for diamond grading reports to continue to climb in the years ahead, especially as more goods are sought by developing consumer markets. Over the years, demand for a broader range of diamonds – down to J and K colors and SI2 clarities – has also increased the workload for laboratory grading and identification. Today, customers are savvy purchasers of almost every consumer-durable product, and their use of information and a variety of purchasing resources, such as the Internet, is on the rise. They look for quality and value, and want a way to assess it. They want and need good reasons to purchase an item, especially when it is a product they know relatively little about, such as a diamond.

We are also seeing that concerns over synthetic diamonds and HPHT treatment have placed greater emphasis on the basic identification of goods, not just grading. At GIA, we have expanded our screening procedures significantly just to establish the natural, synthetic, or treated nature of a diamond. The time when a laboratory could assume that a diamond was all-natural is long-gone. I suspect that, in the future, the importance of establishing whether a diamond is natural and of natural color will become as important as its grading or even its branding. The concern over so-called conflict diamonds has created even more challenges, but also a possible opportunity. For it may well be that, as vertical integration continues to develop in the diamond pipeline, we will see more manufacturers wanting to “certify” the non-conflict origin of rough.

GIA has long cooperated with laboratories worldwide, particularly in research. We regularly share the results of our research with all sectors of the trade, especially through our well-known and respected journal, Gems & Gemology, and our bi-weekly electronic newsletter, the GIA Insider. However, we also believe that each laboratory should maintain its autonomy, and make its own decisions regarding policies and procedures.

The challenges before laboratories are formidable.  But they always have been, and I suspect they always will be. In the late 1980s, I went on record as saying that the technology of synthetics and treatments in the 1990s would threaten the stability of the diamond world. Having seen this occur in the last decade, we can only assume that the challenges of technology will continue to test us in this decade and beyond. However, I believe in the diamond industry, in its people, and in our resilience to economic, geo-political, and even technological threats. We at GIA will continue to do everything we can to support the integrity and well-being of the diamond industry worldwide, and I remain confident in its future.

Business at the Basel World Watch and Jewelry Show, April 4-11, proved spotty, and trade attendance was down, according to a number of exhibitors. However, a late surge in buying helped many exhibitors achieve respectable results.

While a majority of the no-shows were Asians, many buyers from the U.S. and the Middle East also stayed home. Exhibitors blamed the crisis in the Middle East and fear of travel for the diminished traffic, noting that business in general remained fairly strong throughout the industry.

The buyers who did attend came to do business, said exhibitors, who added that Americans seemed to be the most optimistic. Exhibitors also said the strongest buying came in the high end, especially larger diamonds. The lower end of the market also did well, as many exhibitors in the Hong Kong and Indian pavilions reported a strong show.

Business in the designer jewelry pavilions was very slow for the first few days of the fair, but it picked up strongly during the second half of the eight-day event, said exhibitors.

AUCTIONS: Large diamonds and classic signed jewelry pieces helped Christie’s April 8-9 Magnificent Jewels auction in New York achieve $12,858,164 in sales, representing 69% of the lots offered and 75% of the pre-sale estimate by value. The top lot was a pair of ear pendants with two large (23.11 and 23.49 carats) cushion-cut D-IF diamonds, which sold to a private buyer for $2,041,000.

Phillips’s April 15 Magnificent Jewelry auction in New York netted $6.67 million, representing 60% of the pre-sale estimate by value, 64% by lot. The top lot was a 30.09 carat emerald-cut D-VVS2 diamond ring, which brought $1,443,500. A 1.05 carat rare red diamond went to a private party for $442,500.

Sotheby’s will hold its New York Magnificent Jewelry sale April 23-25. The top lots are a 21.65 carat D-VS1 (potentially flawless) rectangle-cut diamond, estimated to bring $900,000 to $1 million, and a 5.04 carat Fancy Intense purple pink diamond that is estimated to bring $800,000 to $900,000.

TRADE: The market for rough diamonds remains robust, as demand continues to exceed supplies in many categories of goods. Boxes from the March 25-29 De Beers Diamond Trading Company sight have been bringing premiums of 10% to 15%. DTC executives vow to continue their cautious policy, although the company did increase sales substantially in March over the previous two months.

BHP, which operates Canada’s Ekati Mine, reportedly raised prices 5% to 10% in March, because of the growing demand for rough.

Dealers in India believe the sectarian violence that plagued Gujarat, the state where most diamond manufacturing operations are located, has ebbed. Production is returning to normal, though some factories still report high absentee rates among Hindu workers who must pass through Muslim-dominated areas to get to their jobs.

Gareth Penny, executive director of the DTC, emphatically reaffirmed his company’s commitment to gem defense and research, even in the wake of a mandate to cut $30 million from its operating budget by this July.

Penny said in an interview with this analyst that “gem defense and the accompanying research is absolutely essential to maintaining consumer confidence in what is our core business: diamonds. Therefore, we will do whatever it takes to protect that business, even if it requires increased funds.”

Penny also reported that the DTC has launched a new branding initiative in Japan and Hong Kong, using the DTC “Forevermark.” Unlike the earlier branding effort that required a costly special reading device, this trademark can be viewed with a 10x loupe.

The goal, he said, is to establish the Forevermark “as a symbol of assurance” among consumers concerned about treatments and conflict diamonds.

De Beers now estimates that conflict diamonds represent less than 2% of total rough sales this year, a significant decrease, because of peace efforts in Sierra Leone and Angola, which are the two major sources of such stones. De Beers believes that this will fall to about 0.5% next year.

A potential legal cloud over the tanzanite trade was lifted when the three lawyers who filed a $1 billion wrongful death suit against STS Jewels and other tanzanite dealers withdrew their claim.

The suit, filed on behalf of the families of three victims of the September 11 World Trade Center attacks, claimed that sales of the gemstone helped fund al Qaeda terrorist activities and the September 11 attacks. The suit was inspired by a November report in the Wall Street Journal.

RETAIL: U.S. Chain store sales in the U.S. declined slightly during the second week in April, the sixth consecutive decline, according to a Bank of Tokyo-Mitsubishi survey.  The decline, say analysts, represents consumer concerns over rising gasoline prices, higher personal debt, and a listless stock market.

The Department of Commerce, however, reports that overall retail sales increased very slightly in March, with the Southeast showing the strongest gains.

Although most economists still believe the nation’s economy is on the mend, some have scaled down growth estimates because of higher gasoline prices and a lack of “feel good” news to lift consumers’ spirits.

By Russell Shor, Senior Industry Analyst

In the last several weeks, we issued two GIA Insider reports on GIA's observations on several samples of the orange to orangy pink and orangy red corundum that is being produced in Thailand by treating sapphires and rubies from various localities. In addition to the gemological features (in particular, surface-related color zones of varying depths) of 48 samples, we reported major and trace-element compositions correlated to color differences in three treated pinkish orange sapphires. In these three sapphires, beryllium showed the most pronounced variation: There was a substantial (and consistent) decrease in Be concentration from the rim to the center of each stone. On the basis of these observations, we suspected that the Be was migrating into the corundum at high temperature from an outside source and was contained in the surface-related orange layers.

For access to these earlier reports, please click here for the original article, and click here for a follow-up. To further explore this issue, we had five additional treated and untreated sapphires analyzed for trace-element composition. Some of the samples were given to GIA by various heat treaters from Bangkok and Chanthaburi, Thailand. Among these samples were three sapphires of different colors (orange, orangy red, and yellow) that reportedly were treated in the same crucible as the orange to orangy pink sapphires that often show a rim of orange color. These three stones did not show surface-related color zones. In addition, we had an unheated natural pink sapphire from Madagascar sawn in half: One half was kept as a reference; the other was treated in Bangkok, reportedly under the same conditions that are used to produce the orange to orangy pink colors (figure 1). Our samples also included one pink oval preform from a separate source in Thailand that reportedly was treated by this method several times but showed no color change. A fragment of a crucible that had been used to treat other sapphires by this process was also analyzed.

After treatment at high temperature, most of the sapphires showed “pits,” “drops,” or “wrinkles” (figure 2) on their originally smooth surfaces, very likely due to melting of the corundum at the surface.

As in the previous report, trace-element analysis using secondary ion mass spectrometry (SIMS) was performed on these samples by the Evans East Analytical Laboratory in East Windsor, New Jersey. We also had the crucible fragment and the untreated half of the natural pink sapphire analyzed, as well as the treated half after it was lightly repolished. All the other sapphires were cut in half and the cut surface polished for SIMS analysis.

The SIMS results (table 1) showed a much more complicated situation than what we observed in the last report. Clear differences were detected between the untreated half (no. 45301) and the treated half (no. 45002) of the natural pink sapphire for almost all the analyzed elements, with the most pronounced variation in the beryllium content. Be was about 10 times higher in the treated half than in the untreated half. The pink sapphire that did not change color after going through the treatment process several times (no. 45082) showed a variation in Be concentration similar to that of the sapphires with surface-related color zones: much higher Be content near the surface than at the center.

However, in the three other treated sapphires that were colored throughout (i.e., did not have surface-related color zones), the Be concentrations were different. The orangy red (no. 45033), orange (no. 45032), and yellow (no. 45035) stones showed relatively high concentrations of beryllium at both the rim and the center. In the orangy red stone, Be was slightly higher at the rim. The orange stone showed slightly higher Be at the core, and the yellow stone actually had significantly higher Be at the core.

Our earlier findings, which suggested a correlation between the presence of beryllium and the surface-related orange color zoning found in many of these stones, were supported by the results for the treated and untreated sapphire halves. Other samples, which were colored throughout with no surface-related zones, showed high concentrations of Be all the way to the core, again suggesting that there is a relationship between the color induced and the Be content. However, we also have a pink stone that had a high level of Be near the surface, although it appears that the color was unaffected. In addition, an orange stone colored throughout showed higher Be in the center than the rim. It is possible that the color change in those stones that do react to the process may be due to a complex chemical reaction with the host corundum. Because different corundums have different chemistries, the results of the treatment are also variable.

An interesting result was observed when we analyzed the fragment of a ceramic crucible in which other sapphires were treated by this new process. Compared to the sapphires, the crucible showed much higher concentrations of Na, Mg, K, Ca, and in particular Be (~ 4000 ppm). In fact, the Be content was approximately 10 times higher than the highest concentration detected in any of the treated sapphires. We are currently trying to acquire an unused crucible to see if this Be content is inherent to the crucible itself.

The SIMS results confirmed our previous observations that beryllium could diffuse into corundum from the surface. The source of the beryllium as well as many of the other elements is still unknown, but it could be the crucible, the local environment (such as the oven), a chemical flux, or perhaps even contaminants such as beryl or chrysoberyl mixed in with the lots of sapphires. So far, the results of this investigation strongly suggest that beryllium is not the direct cause of the surface-related orange color layers. However, it is possible that the diffusion of beryllium and perhaps other elements into the stone may be creating a reaction with the inherent chemistry in the corundum that gives rise to the yellow to orange coloration. As we continue to study more samples and learn more about the chemical reactions involved, we will continue to provide updates as appropriate.

For more gem news from around the world, see the upcoming Spring 2002 issue of Gems & Gemology. This special issue, which commemorates Richard T. Liddicoat’s 50th anniversary as G&G editor-in-chief, is available for $24.95 in the U.S., $35.00 elsewhere. Or start your subscription with this issue – $69.95 in the U.S., $80.00 elsewhere. To order, e-mail dortiz@gia.edu, or call toll-free 800-421-7250 ext. 7142. Outside the U.S. and Canada, call 760-603-4000, ext. 7142. Order online at www.gia.edu/gandg. Please enter promotion code RTL02.

Editor’s note: This report was prepared by the following GIA Gem Trade Laboratory staff members: Shane McClure, Director of West Coast Identification Services; Tom Moses, Vice President of Identification Services; Wuyi Wang, Research Scientist; and John I. Koivula, Chief Research Gemologist.

More than 150 members of the international gem and jewelry industry attended the GIA Alumni Association's GemFest Basel 2002 April 6. Held annually in conjunction with the Basel Watch and Jewellery Show in Basel, Switzerland, GIA GemFest Basel is an educational forum that brings together leaders of the industry with their peers to discuss issues that are impacting the industry. Moderated by GIA President William E. Boyajian, G.G., participants focused on key gemological and economic issues facing the industry today.

For the full story click here.

The sciences of gemology and paleontology will meet in a fascinating new exhibit titled, “Opal and the Dinosaurs: Discover the Link, that opens June 10 with a lecture in GIA’s Museum. The lecture will be delivered at 7 p.m. by Andrew and Damien Cody of the Cody Opal company, which together with the Australian Museum is co-curator of Australia’s National Opal Collection.

The Codys will explain how the fossil remains of a ferocious 12-foot marine reptile, known as a pliosaur, became “opalized”. This rarity along with the opalized remains of many other extinct plant and animal life which existed in Australia more than 100 million years ago, will be on display at the exhibition.

Australia produces 95% of the world's precious opal which formed under unique conditions after the waters of the inland sea receded toward the end of the dinosaur era, about 65 million years ago. Over millions of years, silica gel hardened into microscopic spheres, forming opal. When these spheres are uniform and regularly arrayed, they diffract light into the brilliant rainbow colors of precious Australian opal.

GIA Museum Director Elise Misiorowski pointed out, “Opalized fossils are very rare, and this exhibit provides both an intriguing glimpse into the prehistoric era of the dinosaurs, and a clearer picture of how this fascinating gem material formed.” She also said this exhibit will mark the first time a part of Australia’s National Opal Collection is shown outside the country. The exhibit is scheduled to be open for six months, she added.

The lecture is sponsored by the Gem & Jewelry Society of San Diego and is open to the public. Admission is free for Gem & Jewelry Society members, with a  $10.00 fee for non-members. Seating is limited, so please make reservations early by calling 800-421-7250, ext. 4170.

Make sure to check out the latest spring specials available from GIA GEM Instruments, which offers the finest equipment in the world of gemology, metallurgy and jewelry. Discover the incredible savings on microscopes, lights, loupes and tweezers that may help boost your bottom line this spring.

For instance, you can save $140 when you purchase the GIA GEM PearlMaster Comparison Set used to analyze color, shape, luster, nacre, spotting (blemishes) and make (matching). Educate your customers regarding quality and value to close more pearl sales this spring. The GIA GEM PearlMaster Comparison Set regularly sells for $865, is now just $745.

Also available is the Diamond Proportion Comparator that dramatically demonstrates how cut impacts beauty and brilliance. This item is on special for just $395 – that’s an $80 savings off the regular $475 price. The Diamond Proportion Comparator visually shows how light interacts with pavilion depth differences and illustrates how cut affects a diamond’s overall value. This instrument is the perfect technology for your sales counter.

Check out these and other outstanding specials available from GIA GEM Instruments by visiting GEM Instruments & Books Online Store. Order today, and own the superior equipment used by leading gem and jewelry professionals around the world. Special prices valid until June 30, 2002. Offers good while supplies last, as product is limited to stock on hand. Prices are F.O.B. Carlsbad Warehouse, CA and do not include shipping, insurance, import duties, local taxes and a $3.50 handling charge. Applicable CA, IL and NY sales tax will be added to all orders.

Learn from the world's foremost authority in gemology with GIA's renowned Extension classes in Carlsbad, Atlanta, Greensboro, and New York. Spaces are filling quickly, however there's still time to register.

In Carlsbad, Calif., GIA's world headquarters, the Gem Identification class teaches students to identify even the most challenging gemstones, and is being offered in the evenings the only time this year from May 6-21 for 10 nights.

Don't forget about GIA's acclaimed Jewelry Manufacturing Arts classes as well! Get hands-on training in Carlsbad with classes in CAD/CAM from May 6-17, and Basic Repair & Setting Jewelry from May 6-10.

Atlanta, Ga. will be the location of these Extension classes: Gem Identification, April 22-26; Colored Stone Grading, April 29-May 1; and a one-day Pearl Grading class May 2.

Learn to grade diamonds from the creators of the Four Cs and the International Diamond Grading System™ with GIA's Diamond Grading Extension class being held in Greensboro, N.C. May 6-10. These classes are also being offered there in May: Advanced Diamond Grading Lab and Detecting Synthetic Diamonds & Moissanite, May 11; new Advanced Gemology, May 12; Gem Identification, May 13; Colored Stone Grading, May 20-22; and a one-day Pearl Grading class May 23.

In New York, the May 6 Diamond Grading class is full, however there are still spaces for the Colored Stone Grading class running on consecutive Saturdays from May 4-18. To reserve a space for any New York Extension classes, please call 800-366-8519.

To enroll or for more information on these classes, or other GIA Extension classes held in the United States, please call 800-421-7250, ext. 4001, e-mail eduinfo@gia.edu, or visit GIA's Web site, www.gia.edu and click on Education.