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Diamonds, Music and other Facets of Life

Man Made, Lab Grown, Synthetic Diamonds

Posted on | April 9, 2016 | No Comments

The newest substitute for natural diamonds are now man made or lab grown diamonds. Unlike CZ’s and Synthetic Moissanite, these diamonds actually have the chemical composition of a natural diamond, and can be grown anywhere, like California or Washington DC. Perhaps the most well known startup, Diamond Foundry, is backed by Hollywood bigwigs like Leonardo DiCaprio, star of Blood Diamond. On their website, they sell based on the so called ethical issues of the natural diamond industry. From their website:

The diamond industry has long been linked to human-rights abuses, child labor, ecological destruction, untraceable origin, and cartel pricing. We felt it is time to create a better choice.

Seems like this would be a great selling point to millennials who are looking be to socially and ethically responsible. Sounds a little like selling on fear, which is never good. Remember these are the same customers of Target, Walmart, Gap, and other companies who all produce clothing overseas in not what we would call “socially responsible” conditions. Don’t forget that most natural diamonds are produced under legitimate conditions. Diamond Market maker and rabble rouser, Martin Rapaport, wrote a letter to DiCaprio, pleading for him to stop promoting these diamonds. It will go on deaf ears, but here it is:

Dear Mr. DiCaprio,

Your efforts to sell synthetic diamonds as an ethical substitute for natural diamonds threatens the lives and livelihood of millions of artisanal diggers in Africa. One and a half million diggers support an additional seven million people by digging for diamonds. These diggers are among the poorest people in the world, earning as little as one dollar per day. Their primary daily concern is getting food to feed their children. Things are so bad that in places like Sierra Leone, the child mortality rate is the fourth highest in the world; 12 percent of children die before the age of five.

Instead of using your fame and fortune to help these diamond diggers and their families, you and your company are falsely claiming that it is more ethical to buy your synthetic diamonds than their natural diamonds. You are literally taking bread out of the mouths of the poorest people on earth. And you are calling it ethical. That is super wrong.

Mr. DiCaprio — what will happen to the millions of poor diggers and their families if you succeed in convincing a new generation of Millennial diamond consumers that it is more ethical to buy your synthetic diamonds than their natural diamonds? Will you feed these people? Will you provide them with an alternate livelihood? Are you willing to take personal ethical responsibility for the suffering you will cause?

Dear Mr. DiCaprio, I plead with you to take two urgent actions. 1) Stop promoting your synthetic diamonds as a more ethical product than legitimate natural diamonds. 2) Use your fame and fortune to help us and others promote fair trade diamonds and jewelry that will ensure good living and environmental conditions while paying artisanal diggers fair prices that lift them out of poverty.

You can and should play an important role in promoting ethical consumerism and an ethical diamond trade. The real issue before us is not diamonds, it’s people like the diggers in Sierra Leone and how we can use diamonds to help them. I urge you to contact me and follow up with a discussion about how we and others can create a more ethical diamond and jewelry trade that will significantly improve the lives of millions of artisanal diggers.

Yours truly,

Martin Rapaport Chairman, RAPAPORT

His point is that the man made diamond industry is taking jobs way from the poorest people on earth and calling it ethical. They will argue that Mr. Rapaport is old school, doesn’t embrace technology, and is only thinking about his own personal interests. I’m not here to debate the ins and outs of ethical mining, social responsibility, or these company’s right to exist. The real question is what affect will these diamonds have on the natural diamond market?

I am going to discuss this wearing two hats – the concerns of a retailer and the concerns of a second hand buyer.

Retailer Concerns:

These stones will be about 20% less than natural diamonds, so when you have customers on a budget and asking for these man made diamonds, the retailer will fear that they miss a sale if they don’t have them. If the made made diamond marketing machine succeeds, like DeBeers “A Diamond is Forever” campaign, then retailers may be forced to adapt or die. At this time, we have chosen not to carry these diamonds at Samuelson’s right now. It doesn’t have much to do with being “against” the companies who produce them, but more that we don’t want to participate in cycling these “diamonds” back into the market. This leads into my concern as a second hand buyer.

Second Hand Buyer Concerns:

This part really scares me. We buy a lot of diamonds from the public. Like moissanite, these made made diamonds will test genuine on a diamond tester. What equipment will we have to properly detect these stones? Most will have a laser inscription, but who is to stop someone from buying a man made diamond, having it recut, and then resellng it? Perhaps like CZ and moissanite, in a few years it won’t be an issue to detect these stones. However, the technology has improved so much that I think it will be tough. It also will be interesting to see what these diamonds will bring second hand if they are bought as made made diamonds. In other words, what be dealers pay for “recycled man made diamonds”. It may be that they have ZERO real market value, like CZ’s and moissanite. Of course, natural diamonds have always had a real value and a robust trading market.

Conclusion:

Time will tell how man made diamonds will affect the natural diamond market, but there is something special about natural diamonds that technology can’t ruin. They have been valuable for 1000’s of years, this one blip in history can’t take that all away. As long as they are making real diamonds in a lab, why not make real gold, silver and platinum? Is that the next step? What jewelers and diamond buyers will have to do is adapt and move forward – that’s always been our philosophy – change is inevitable, the winners will move with it…

 

 

Category: Business, Jewelry
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