JEWELRY Man-made diamonds yield fears about gem prices

The newest synthetic stones are nearly identical to natural ones.
WASHINGTON POST
A question has dogged the jewelry industry for decades: If man could make a perfect diamond in a laboratory -- indistinguishable from one mined from the ground -- what would it be worth?
This query has gone unanswered since the first synthetic diamond was manufactured in the 1950s. Beautiful stones have been created, but nothing that couldn't be identified as man-made.
Until now.
Two well-financed start-up companies are rolling out manufactured diamonds that can be distinguished from natural ones only with extremely expensive equipment. The man-made gems aren't easy or cheap to produce, but they're the kind of nearly flawless, sparkly stones that the jewelry industry -- especially DeBeers SA, which controls about 60 percent of the rough-diamond market -- has long feared.
"Everybody's worried because if you look at the price of rough diamonds since 1948, they have never declined in price," said Kenneth Gassman, a diamond industry analyst with Rapaport Research. "Why? Because DeBeers has done a great job of propping up the market. Now you come in here, and suddenly you have synthetic stones that look like the real thing. Now what happens to prices?"
The answer could become clearer over the next year or two as these "cultured" diamonds become more widely available. The yellow diamonds being made by Gemesis Corp. of Sarasota, Fla., are now for sale in only a handful of jewelry stores nationwide. The nearly colorless, flawless white diamonds from Apollo Diamond Inc. of Boston should be available by fall.
Pitched as alternative
Both companies insist they aren't trying to replace mined diamonds. Rather, they expect to find a market niche alongside real diamonds, offering consumers more affordable alternatives.
"We think we'll have an additive niche in the market, and that people will add to their collection of jewelry," Apollo Diamond President Bryant Linares said.
The best-known synthetic gems are simulants -- stones such as cubic zirconia or moissanite that look like diamonds but are altogether different. They may be lovely in a piece of jewelry, but a jeweler or gemologist can tell the difference even if the public can't.
What Apollo and Gemesis are producing, on the other hand, are real diamonds using high-tech methods. "These are chemically, optically and physically identical to mined diamonds," Linares said.
Linares expects his diamonds will sell for up to 35 percent less than a natural diamond. His stones would also give customers the comfort of knowing their gems didn't come from a country that is using the diamond trade to finance terrorism or engage in other kinds of brutality.
Gemesis President Carlos Valeiras said man-made diamonds are also environmentally friendly. "It really covers a lot of bases, from both value and price point all the way to social and environmental concerns," he said.
Telling them apart
What worries jewelers is how hard it is to detect these stones.
Gemesis' diamonds, which can be identified by sophisticated labs run by groups such as the Gemological Institute of America, carry a laser inscription. Without an inscription, a typical gemologist would be unable to tell the difference, Valeiras said. Apollo is still working with GIA on creating a method of identification for its diamonds.
"The cooperation we have from Gemesis and Apollo will help us to characterize the stones and make sure we can identify them and get information out to the trade and to the public," GIA President William Boyajian said.
But the fact that these stones require expensive equipment to be identified raises the possibility that unscrupulous jewelers could sand off inscriptions and try to pass off a man-made stone as natural. Others in the industry worry that the technology to make these diamonds could fall into rogue hands or overseas companies that don't have the same commitment to disclosure.
Still, these diamonds are difficult and expensive to make. Both companies are hoping much of their financial return will come from the high-tech world, where diamonds are coveted for their high conductivity and can outperform silicon. First, though, the companies must produce a lot more diamonds.
The process
Gemesis uses a high-heat, high-pressure system to convert a piece of refined graphite into a yellow diamond in about 80 hours. Apollo uses a chamber of carbon vapor that slowly attaches, atom by atom, to a thin wafer of diamond, gradually building up to a near-perfect stone.
Gemesis may be especially well positioned to draw in new customers because it makes "fancy yellow" diamonds in an intense hue rarely found in natural stones. A natural, one-carat yellow diamond might cost $20,000, while the Gemesis version of such a stone would be closer to $4,000 to $5,000.
"For that second, third and fourth piece of jewelry, you're looking at that fashion statement, at that fancy color," Valeiras said. "You've seen it in the fashion magazines. You can have that now."