Synthetic diamonds: Is there a solution to non-disclosure?

by eyetee | February 21, 2013 2:54 pm

By Pierre Leblanc

Various reports of synthetic diamonds submitted as natural diamonds for grading has raised serious alarm bells in the diamond industry.

Most recently, a New York City-based lab received a parcel containing more than 200 undisclosed synthetic yellow melee diamonds. Prior to that, International Gemological Institute’s (IGI’s) discovery of 600 synthetics in a parcel garnered the industry’s immediate attention and scrutiny.

Although troubling, these incidents are not the first time the issue of synthetics has been front and centre. In fact, the story begins in 1953, when General Electric made the first synthetic diamond. At the time, the diamond industry believed the sky would soon fall and the market flooded with synthetics. However, that wasn’t entirely the case, as those early lab-grown stones were not gem quality.

Things have changed since then. In an article published by the Gemological Institute of America (GIA), industry analyst Russell Shor reported on a 2006″“2007 study showing “almost 10 per cent of 870 small loose diamonds gathered from retailers and jewellery manufacturers in Japan were high pressure/high temperature (HPHT) synthetics.” There was a surprising lack of reaction at the time of that article’s publishing, considering the stones in question were yellow and would fetch a much higher price than their white counterparts. Given their small sizes, however, most would not be submitted for grading due to cost. Some unscrupulous individuals knowingly took advantage of that fact.

Today, reports of larger colourless synthetic stones submitted as natural are cause for even greater concern, and rightly so, since the problem is not only a matter of their laboratory origin, but more importantly, the effect they will have on consumer confidence in the whole of the natural diamond industry.

Without doubt, the issue is bound to become more mainstream over time, negatively affecting consumers who would fear paying the price of a natural, two billion-year-old diamond and receiving a less expensive six-month-old synthetic. If the natural diamond industry were to lose the confidence of consumers, recovery would be practically impossible.

Playing by different rules
It has been stated time and again that disclosure is the key to this issue. The problem is unscrupulous individuals will not disclose. They seek a quick gain, regardless of the long-term damage they do to the natural diamond industry, and to more than a million people working in it.

Some have suggested Gemesis Diamond Co. produced and sold the synthetics IGI found, although the company has denied the allegation. We all know it would be too easy for anyone to purchase synthetics from Gemesis, remove surface markings, and attempt to have the stones certified as natural. Unless law enforcement agencies trace back the route of synthetics submitted to labs, I doubt we will ever determine who any of the unscrupulous individuals are. The problem is this is rarely—or ever—the case. Perhaps the reason is police perceive the issue as white collar crime and give it a lower priority. However, there is also an apparent resistance within our own industry, as some fear the legal consequences.

Going below the surface
Disclosure should not only be about the producers of synthetic diamonds, but also about who is trying to pass them off as natural. Traditionally, the diamond industry has been fairly effective at ruling out bad operators, and could easily muster its ability to ban them from doing business with any of the bourses, as well as quickly alert the trade to those sources of synthetics.

Various devices claiming to identify lab-growns are on the market, although most agree only an advanced gemmological lab can positively identify a diamond as synthetic.

One solution may be to mark synthetics with a permanent serial number or indicia inside the bulk of the diamond, rather than the girdle or the table. The technology for such markings exists today. The indicia in the bulk of the diamond is so small it cannot be seen with a 10x loupe or optical device, therefore, the diamond’s value is not affected. This way, removing surface markings would not erase the mark inside the diamond and the serial number would help to quickly identify the source of the synthetic and potentially its trail through the diamond pipeline. Massive damage would have to be done to the diamond to eliminate the serial number, making it irrational to do so.

Other solutions such as mapping a laser beam’s dispersion pattern through the table, three-dimensional mapping, and adding markings to the table are in use. The problem with all three is that a relatively small amount of re-polishing can remove surface markings and change the diamond’s angular parameters.

Honest producers of synthetic diamonds have pledged to mark their diamonds and disclose them as synthetics. Perhaps if they were to mark their products in a permanent manner, it would reduce the likelihood that anyone would try to pass the stones off as natural. Gemmological laboratories could also adopt a policy that any synthetic diamond presented for grading is serialized in a permanent manner before returning it to its owner. Both of these actions may discourage a great deal of misrepresentation.

Serializing in the bulk of natural diamonds would also present interesting opportunities. Since the technology allows the numbers to be read in a manner similar to bar codes, it could be used to manage the manufacturing process and speed up functions, such as tracking diamonds from one station to another and for stocktaking. If information is registered as the diamond progresses through the pipeline, its pedigree could be made available to its owner and include interesting facts, such as who polished it or the identity of its previous owners. The diamond could be traced from the mine of origin to the last owner.

Do a number on
As more and more diamonds become serialized, it would become increasingly risky for thieves to dispose of those stones. Ultimately, serializing diamonds could make them less attractive to thieves, as they would no longer be considered untraceable. This could lead to fewer insurance fraud claims and a higher recovery rate, translating into lower insurance premiums for both the trade and consumers.

Further, insurance companies could insist on larger and more expensive diamonds to be serialized, increasing the likelihood of recovering them if stolen. There have been cases where serial numbers have been polished off the girdle of stolen diamonds in the hope of being able to reintroduce them in the market. A permanent mark could help stop this practice.

It is important to quickly find a permanent solution to the identification and disclosure of synthetic diamonds to avoid permanently damaging consumer confidence. Some ideas may be more successful than others, but no solution is possible without the full co-operation of the natural and synthetic diamond industries. The risk is too great otherwise.

Pierre Leblanc is principal of Canadian Diamond Consultants and former vice-president of corporate affairs of Diavik Diamond Mines Inc. He is one of the architects of the Canadian Voluntary Code of Conduct for the Authentication of Canadian Diamond Claims. Leblanc can be contacted via e-mail at c.d.c@rogers.com.[1]

Source URL: https://www.jewellerybusiness.com/features/synthetic-diamonds-is-there-a-solution-to-non-disclosure/

---