Retailers must decide if they are willing to offer lab-grown diamonds.

Retailers must decide if they are willing to offer lab-grown diamonds.

San Francisco Chronicle

SAN FRANCISCO — Inside a small hotel room in downtown San Francisco recently, a businessman named Stephen Lux gently opened a jeweler’s box and placed a shoestring-thin diamond necklace on the table.

The 64-carat, canary yellow diamonds looked like they were worth millions — “Virtually priceless,” Lux said. “But we could sell it to you for, say, $500,000.”

Why the discount?

Lux’s Gemesis Corp. is the largest maker of lab-grown diamonds, also known in the industry as cultivated diamonds, which sell for about a third of the price of the mined gems.

Gemesis grows the stones in boxy machines in a warehouse in Sarasota, Fla., and each produces a rough 3-carat diamond in about four days — a process that takes Earth millions of years. Natural diamonds form hundreds of miles below Earth’s surface, when carbon gets trapped under great amounts of pressure, is heated and then rises to the surface.

“These are diamonds,” Lux said. “Just from a different origin: a lab.”

Gemesis has been fine-tuning its diamond-making machines since 2000, but it’s only now that the diamonds are ready for a mass market. If local diamond retailers snap up the stones, the yellow and green products — as well as purple ones — could shimmer from local display cases this holiday season.

But first, admirers of colorless diamonds will need to be convinced that the lab-grown spoils are just as good as the gems that come from Earth’s mantle.

Rob Bates, who covers the diamond industry for the trade magazine Jewelers’ Circular Keystone, said the man-made product received a credibility boost last year when the Gemological Institute of America, the industry’s authority on valuing gems, began grading and certifying the stones just as it does mined diamonds. Jewelers at the institute found that lab-grown stones are identical to natural diamonds, which means both are the hardest material known to man.

Still, Bates said there has been little impact on the overall mined diamond industry so far. With emerging diamond consumer markets in China and India, and no major mines scheduled to open worldwide in the near future, mined diamonds are becoming scarce and more expensive.

“Some people are thinking lab-grown will make up for that lack of supply and increase in demand,” Bates said. “But it’s still early in the game.”

Lux, who graduated from San Jose State with a chemical engineering degree, said his company now owns hundreds of machines, called cultivators, which work around the clock. A diamond seed (natural diamond dust) is mixed with graphite and metal and put under intense heat and pressure — enough to imitate Earth’s mantle at work — until a full rough diamond appears in three to four days.

The technology has been around since the 1950s, when manufacturers first used it to create industrial-size drill bits and blades, but only in the last decade has Gemesis, along with a handful of startups, used the technology to make jewelry.

The results can be unpredictable, and for now Gemesis can make only colored diamonds. While mined colored stones are rare — and therefore several times as expensive as colorless ones — currently there is only a small, exclusive market for them.

Still, retailers like Jahan Yadegar, who has operated a jewelry store in San Francisco’s Union Square for 23 years, said Earth-made diamonds will always be held in higher regard. Yadegar said he has never inspected a lab-grown, and he called natural diamonds a “gift from nature.”

“The second a man’s hand touches it [to create it], it’s no longer a real diamond,” Yadegar said. “And if it’s not from nature, I don’t want to sell it to my customer.”