State of Fear – Monopoly’s new tool for Diamond Industry

As history shows any change, though inevitable, faces a lot of undue resistance. Same is the case with Lab-grown diamonds, which are being vehemently attacked by vested interests in Mined Diamond Industry. It is very clear that monopoly is working overtime to spread rumors, false stories and fear. And their newest medium is Media.

An article dated 31st July 2014 published on Reuters (and republished on various mediums) said that Lab-grown diamonds present a ‘conundrum’ and suggested that they are a threat to the world diamond industry. The article however is fundamentally flawed and lopsided on several counts

1)      The central point raised in the article is about disclosure of lab-growns and the unfounded fear of how they might get mixed and end up at a retailers’ inadvertently.

The article itself refers to NMDC’s (Natural Mining Diamond Committee) finding that lab-grown diamonds output is a fraction of that of mined ones. But what it fails to report is also the fact that NMDC in the same report said that the undisclosed diamond mixing is grossly exaggerated and “could only be occurring on a fairly small scale”. Also, the article quotes Tom Moses of Gemological Institute of America (GIA) “fortunately, it’s a very small number of instances”. The issue of diamond mixing has indeed been blown out of proportion.

Moreover, the article mentions that De Beers has developed an automated Melee screening instrument and cited an example of a worker at Israel Diamond Exchange (IDE) who is operating on a new machine developed by GIA to test the origin of stones. If there is ample technology that exists and people are being careful and “very, very cautious”, then one fails to understand what is the fuss of the all the hyped fear all about.

Dr. James Shigley from GIA and Dusan Simic, President of Analytical Gemology and Jewelry lab, in a conference held on May 29 in Las Vegas, were both of the opinion that there are enough checks, balances and technology that exists to counter any undisclosed mixing and assured the Industry about diamond identification.

When there aren’t enough Lab-growns to be mixed and adequate systems exist for disclosure, then this unfounded issue seems like a fictional theory and about creating a State of Fear in the minds of the Industry stakeholders.

2)      The article mentions ‘Blood diamonds’ and suggests that due to international pressure, the issue has been solved to a larger extent!!!

Perhaps the author is unaware that still in places like Central African Republic (CAR), violence and bloodshed is rampant and mined diamonds are the root-cause of the problem. Case in point is Canada’s Axmin mine in CAR. Now it’s a no-brainer that these diamonds are certainly not going to be used by locals and rebels will only benefit if those diamonds reach the international markets. By the article’s own admittance “the problem [of blood diamonds] has not been wiped out entirely”.

Referring to Blood diamonds, the article says “Tackling the undisclosed mixing of synthetic diamonds may be an even bigger challenge because the product is so sophisticated.” It seems that the author forgot to consider that Blood diamonds are also mined diamonds and unlike with lab-grown diamonds (however sophisticated), the screening and testing machines and instruments (like the ones developed by GIA and De Beers) won’t be able to differentiate between a Blood diamond and Non-Blood diamond. The bigger question and challenge is how will the industry ensure 100% that no mixing of conflict diamonds take place and no piece of blood diamond reaches a retailer’s shelf undisclosed, which will have enormous devastating impact on the world.

3)      The article repeatedly refers to Tiffany’s that how they are against the Non-mined diamonds and endeavor to ensure that only mined diamonds come in their stores.

Well, for the people who still want to hold on to the old world, the news is that the world is changing. There are now several jewelers who sell only Lab-grown products (for various benefits that we’ll try not mixing in this discussion) and they are being successful and their numbers only increasing, due to rising acceptance of end consumers owing to increased awareness among them.

4)      The article keeps calling the Lab-grown diamonds as ‘Synthetic’ and Mined ones a ‘natural’.

This is quite ironic. The article itself mentions that “Synthetic diamonds are legitimate” and quotes Tim Moses of GIA “Chemically, physically and optically the two kinds of diamonds are the same”.

It has been time and again proven that except for the source of origin, there is absolutely no difference between a Mined diamond and a Lab-grown one. Then why call the latter ‘Synthetic’, which has a connotation of something meaning artificial when on the contrary it is a truly real and natural diamond like a Mined one.  In its report ‘Diamond Growing Greenhouses’, Frost & Sullivan said that ‘Synthetic’ is an inaccurate term to describe a Lab-grown diamond and the practice should be dropped.

Referring to GIA’s Mumbai Lab director at a 2012 Rapaport conference and similar other sources, Rob Bates, a senior editor at JCK, published that “In Reality, Lab-Grown Diamonds Are Real Diamonds”.

In another article GIA’s Director of R&D Dr. Wuyi Wang responded to the use of the word ‘synthetic’ as “a well-accepted term in the scientific community”. It’s interesting to note that GIA is the only grading lab that still uses the word “Synthetic” when almost all the other labs worldwide use the term ‘Lab Grown Diamonds’ and it’s also amusing to wonder since when did GIA started certifying ‘scientific’ products than jewelry!!

Except for following the antiquated and archaic regulations, the industry practice of using these nomenclatures is surely incorrect.

It is quite startling why the article falsely suggest that Lab-grown diamonds are threat to the industry when World Federation of Diamond Bourses (WFDB) president Ernest Blom has clearly said that Lab-grown’s are not a threat but “another type of stone with its own niche market”. Ronald VanderLinden, President of Diamond Manufacturers and Importers Association, says that market has great possibility and since most of the diamond mines will exhaust in 20-25 years, he recommends to embrace Lab-grown diamonds, which “will be part of our future”.

Such kind of publications reveal that monopoly’s new tool is to fabricate and instill a State of Fear in the industry and hold it back instead of letting it progress forward.

 

2 COMMENTS

  1. The issue of Blood diamonds has been systematically suppressed by the industry over a period of time, when in reality they still exist in abundance. I was reading an article yesterday about the limitations of Kimberly Process and how it should be extended to others in the Value chain and not just restrict it to the Miners. In its current form, Kimberly Process is a joke.

    A news item sometime back suggested that 1 out of 3 diamonds available in the market are in fact blood diamonds.

    As rightly pointed out in this blog, instead of worrying about the Lab-grown diamonds, industry should seriously start ensuring the detection and traceability of Conflict diamonds.

    So many industry players and so-called experts keep talking about ’emotions’ attached to natural diamonds. I wonder, how emotional can a person be when her fingers are wrapped with blood of some poor soul (though in form of a shining stone)!!

  2. Well framed and logical arguments here. The problem of change with the diamond industry is a big issue. On reading this, I recollected something similar in the Bain-AWDC 2012 Report: ‘The Global Diamond Industry – Portrait of Growth’ –

    “The diamond industry tends to be extremely conservative… It has a long history in which a handful of players dominated rough diamond production. Many wholesalers and polishers are generations-old family businesses. Because the industry is so bound by tradition, any disruption in the pipeline tends to spark concerns.” (Page 8)

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