Industry Fears Spread Over Synthetics in Melee Parcels

Call them lab-created or lab-grown or cultured diamonds or, less accurately, synthetic stones. Call them what you will, but there is no doubt that the issue of such diamonds is once again causing widespread concern in the diamond industry globally. The production of factory-created diamonds is at an all-time high, indeed experts say that never in the past has it been possible to make them so easily and relatively inexpensively.
The reason for the concern in the worldwide diamond trade is due to the insidious way they are entering the diamond manufacturing pipeline: mixed into parcels of small natural diamonds. And this, in turn, has raised the question as to whether technology has developed quickly enough to be able to tackle the problem.
With larger stones, it has been quite easy for a number of years to identify them. However, the cases of synthetic stones added into larger parcels in the past year or two has been mostly in smaller diamonds. And that has raised suspicions that melee is being targeted for the simple reason that diamonds smaller than around 0.3 carats are not usually sent for grading. But with smaller stones.
“As one Israeli diamantaire commented: “I don’t think we have to be great detectives to understand the trend here. Typically, parcels of smaller diamonds have undergone testing, but not of a highly comprehensive level. That is mostly because they have been regarded as too small to bother with and because they are not usually certificated. Businesses do not want to count and check hundreds and even thousands of small diamonds. The criminal element understood this and came to the realization that it was an ‘efficient’ way of getting small synthetic stones in that cost them much less and thus boost their profits.”
Meanwhile, Avi Paz, honorary president of the Israel Diamond Exchange and of the World Federation of Diamond Bourses, said: “There is no doubt that this is a growing problem. Disclosure is everything because the whole business is based on trust and honesty. It is encouraging that some of the gem labs have technology that can disclose the synthetic stones, but we need to be extremely vigilant on this issue.”
With many media reports in the trade press suddenly discussing the issue, industry reactions were quickly made public. The International Gemological Institute (IGI) stressed the need for well-established synthetic identification services. “This is an issue that not only affects all aspects of the diamond industry, but ultimately hurts consumer trust,” said IGI President and CEO, Jerry Ehrenwald. “The trade has a responsibility to remain vigilant and now – more than ever – synthetic detection technology and services are of utmost importance.” The IGI said it offers batch testing of diamonds (synthetic versus natural) on an individual basis, and uses advanced equipment, such as De Beers’ DiamondSure and DiamondView machines, to assist in weeding out synthetic stones. The IGI said it has been monitoring the growth of synthetic diamonds for decades through its diamond research laboratory division and officially launched its IGI Laboratory Grown Diamond Report in January 2007.
“The industry is really doing its best to deal with this problem,” Ehrenwald told New York Diamonds. “We used to see synthetics in larger diamonds, and the issue of them being mixed in melee is new. Our diamond service for checking melee can 100 percent weed out synthetics. If anyone has any doubts about the stones, we are here for them.”
He said that less than 5 percent of the stones mixed in melee, of the parcels that IGI-USA has seen, are synthetic stones. “We cannot identify where they are from. In fact, even the clients who submit the stones don’t know”
The warning from the IGI was followed by an alert from the World Federation of Diamond Bourses (WFDB), which expressed concern at the growing numbers of cases of undisclosed synthetic diamonds entering the market. “While the WFDB acknowledges that synthetic diamonds have a place in the market, they must not be confused with or marketed as natural diamonds. It has been the policy of the WFDB that synthetic gems must be declared and as such the Federation will have a zero-tolerance approach towards individuals or companies who do not abide by this.
"As the industry and the WFDB work hard to protect the reputation of diamonds, the Federation has put out an official warning that it will not stand for the passing off of synthetics as natural. During the organization’s executive meeting in London, which took place last week, a unanimous decision was made to take severe action against any member who is found to knowingly misrepresent or fail to disclose synthetic diamonds.
"Members of the diamond industry need to understand that they are personally responsible for what they sell, which is why it is of the utmost importance to know your supplier and the legitimacy of their product whether it is ensuring they are Kimberley Process compliant or disclosing synthetics.
"The law is clear and the punishment for fraud will be pursued. The WFDB will work with all legal agencies across the globe to assist in the prosecution of those who participate in this type of fraud in the diamond industry," the WFDB said in a statement.
The most recent alerts followed reports in May 2012 from the IGI regarding several hundred Chemical Vapor Deposition (CVD) diamonds at its labs in Antwerp and Mumbai that were submitted to be certified as natural diamonds. Roland Lorié, the co-CEO of IGI, said that following the case from May last year, his labs have seen increasing cases of individual diamonds or items of jewelry featuring synthetic rather than large packages. In other words, not large volumes, but more incidents.”
The IGI uses the De Beers-developed DiamondView, DiamondSure, or DiamondPlus machines. And the diamond miner is now working on further simplifying the process for identification of small synthetics via its Automated Melee Screening Device (AMS). It has conducted successful testing of the AMS and is now carrying out comprehensive field trials with several sightholders whose specialty is melee. The trials are due to be finished in the coming months and the firm anticipates that the AMS will be ready for wider deployment with its client in the first half of next year.
If the producers of non-naturally mined diamonds are to be believed – and there does not seem to be any reason why that should be the case – then production of lab-grown diamonds is set to rise substantially. But, more than that, demand appears to be strong and growing. Scio Diamond Technology Corporation CEO Mike McMahon said manufacturers, including the firm he manages are not able produce enough stones to meet demand. As of now, Scio Diamond produces some 30,000-40,000 carats annually, but he has claimed in media reports that there is demand for more than one million carats.
What is the attraction of factory-created diamonds? After all, leaders of diamond industry organizations have been saying for many years that it is unlikely that couples would want to celebrate the fact that they have found a life partner with a diamond that was made artificially.
Unfortunately for the natural diamond industry, synthetics have several advantages. These include the fact that they are being touted as affordable. At a time of rising prices when industry forecasts suggest that the costs of diamonds are likely to soar in the coming years due to rising demand from India and China, that is a not inconsiderable factor.
In addition, they are conflict-free, and again that is a huge advantage in the modern era when consumer interest in the provenance of diamonds and insistence that they come from areas that are not the subject of internecine, or other, types of conflict.
Then there is the fact that diamonds are relatively environmentally-friendly stones. Land, rivers and lakes have not been harmed in digging them out. Native peoples have not been moved from their ancestral lands in order to enable mining.
A major concern is disclosure – or the lack of it. Manufacturers, such as Scio Diamond point out that its invoices indicate that the diamonds are lab-grown. It has no control over how the diamonds are later marketed when set in jewelry, the firm points out. The diamond manufacturers must show that lab-grown diamonds have been used and with appropriate certification.
Similarly, Gemesis, the largest maker of polished lab-grown diamonds and diamond jewelry, says on its website: “Gemesis is committed to maintain supply chain integrity and providing knowledge of origin of its products. For origin certification and to distinguish its diamonds from those mined in nature, Gemesis insists that each of its lab-created polished diamonds over one-quarter carat in weight are laser inscribed with an identity name and number as part of the certification process.”
The problem, of course, is with smaller diamonds being mixed in melee parcels, since they clearly cannot be laser inscribed or certified. Ehrenwald points out that diamonds bigger than 0.30 carats are checked to ensure that undisclosed diamonds have not been included. Diamonds of 0.05-carat to 0.29-carats, not usually submitted for certification, can also be checked with relative ease.
The issue at point lies with goods smaller than 0.05 carats. Although IGI has the machinery to identify such items, the process is comparatively expensive because of their small size, and it is not realistic to submit every melee parcel to a lab.