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Are High-Priced Diamonds Forever?

Advancements in technology are making lab-grown diamonds more readily available than ever before. Are they poised to take some of the luster out of the natural diamond industry? NewsChina reports

By NewsChina Updated Feb.1

For the socially conscious, shopping for a diamond ring goes beyond saving up a month’s salary. There are other prices to consider, such as the environmental impact of mining and conflicts in  
Africa over resources.  

This awareness and more are drawing consumers to lab-grown diamonds. Cheap, near-flawless and conflict-free, synthetic diamonds are quickly becoming mainstream – and challenging the traditional diamond market.  

As Chinese manufacturers increasingly produce more high-quality diamonds, global diamond leader De Beers overturned its vow to not sell stones created in laboratories and launched its Lightbox Jewelry line of synthetic diamonds in September 2018.  

During a recent interview with NewsChina, Jia Xiaopeng, director of the State Key Laboratory of Superhard Materials at Jilin University, said: “Synthesized diamonds, though grown in labs, have the same physical characteristics and chemical composition of natural stones. They’re made from carbon atoms and can be produced with fewer impurities and defects. They share no discernible difference in quality and look from natural diamonds, but have a competitive lower price.” 

Gem Genesis 
In May 2015, during qualification testing on a diamond-set ruby, the Shenzhen laboratory affiliated to National Gemstone Testing Center found a number of black carbon spots and clouds in some of the piece’s melee diamonds (tiny, decorative diamonds). Spectroscopy tests revealed that five of them were synthesized gems. The find suggested that lab-grown diamonds had already mixed among natural gems in the Chinese jewelry market.  

Scientists have been attempting to synthesize diamonds since the late 1880s. Significant progress was made in the 1950s with a method that involved heating carbon to extreme temperatures while subjecting it to a hydraulic press.  

The Swedish industrial firm ASEA was the first to succeed in growing diamonds in 1953, but did not announce their discovery at the time. General Electric (GE) made successful synthetic diamonds in 1955. De Beers announced their success in growing diamonds in 1959. In the 1960s, both GE and De Beers began to create diamonds and commercialize the technology for industrial purposes.  

Ever since, developed countries have placed importance on synthetic diamond production. “Because of the diamond’s hardness, it is ideal for cutting and processing other materials. Furthermore, diamonds have been used in processing nuclear reactors or navigation equipment for spacecraft,” Jia said. “Diamonds are also an ideal material for use in semiconductor technology.” 

“Synthetic diamonds at room temperature are the best chemically stable material for thermal conductivity available now. So if they are used in semiconductors for CPUs, they can improve computer processing speeds,” Joe C.C. Yuan from Taidiam Technology (Zhengzhou) Co., Ltd. told NewsChina.  

In the past, synthetic diamond was widely used in industries such as oil drilling, mining, lasers and semiconductor technology. “It was not widely used in the consumer gem market until recent years when technology was mature enough to produce flawless gem-quality stones,” said Shan Chongxin, director of the Physics Engineering Institute at Zhengzhou University. “In addition, the high value of jewelry diamonds has drawn more synthetic diamond producers to the consumer market.” 

It took scientists several decades to cultivate large gem-quality stones. According to Jia Xiaopeng, the production of flawless, high-purity diamonds hinged on improvements in raw materials, lab conditions, ingredients and processing procedures. 

GE had waited until 1995 to mass-produce synthetic diamonds because the high cost of production exceeded their market value. Since the 1970s, countries including Japan and Russia also began researching synthetic diamonds. However, synthetic diamonds still couldn’t compete. They were still not as large as or had the clarity of the best natural diamonds. Most had a yellow or brown tint due to nitrogen contamination during the stabilization process.  

According to Dai Lidong of the Institute of Geochemistry, Chinese Academy of Sciences (IGCAS), China’s first synthetic diamond was produced in 1963 through a joint effort of IGCAS and the Zhengzhou Sanmo Research Institute. Over the following four decades, despite advancing technologies, the quality of synthetic gems remained low and often with yellow or brown colorations.  

Then in 2005, Jilin University Superhard State Key Laboratory of Superhard Materials at Jilin University successfully produced a four millimeter Type IIa diamond with high purity standard. Dai said that so far China, the US, Russia and Japan have mastered gem-quality synthetic diamond technology. China uses an independently developed six-sided hydraulic top press to produce synthetic diamonds, which outperforms the two-sided hydraulic top press adopted by most other countries. Accordingly, some manufacturers now import the machines from China.  

While most countries share similar technologies, differences in raw materials, pressure transmission, heat transfer and temperature accuracy result in varying quality and purity. Dai said that Japan now leads the world in synthetic diamond technology, but it has yet to develop it for manufacturing. 

Today, high quality synthetic diamonds are all but indistinguishable from mined stones. Technology is already so advanced that even professional experts need equipment to tell them apart. 

Rocking the Market 
“As early as the 1950s, De Beers set up the company’s Element Six unit as one of the world’s leading producers of synthetic diamonds,” said Joe C.C. Yuan. “De Beers had a long monopoly on natural diamond reserves, so it pledged never to sell synthetic gems.” Yuan continued that as De Beers stepped up its efforts to expand its man-made diamond market, at the same time it made sure to clearly distinguish low-cost synthetic gems from natural ones as a way to secure its dominant position in the natural diamond market. 

Synthetic gems make up only a small part of the US$80 billion global diamond market. But demand is increasing. Yuan foresees the growing popularity of man-made diamonds having a big impact on the natural stone market. “In the future, with the decreasing resources for mined diamonds, synthetic diamonds will make up the market gap and eventually replace natural gems.” 

A report published in August 2016 by Morgan Stanley titled “Global Diamonds: Game of Stones – Lab vs. Pipe” predicted that “lab-grown diamonds could take a 15 percent market share in gem-quality melee diamonds and a 7.5 percent share in sales of larger diamonds by 2020.” In July 2018, the US Federal Trade Commission expanded its definition of “diamond” to include those grown in a laboratory as part of several changes to its jewelry guidelines.  

China has led world production of synthetic diamonds for 15 consecutive years. In 2017, China’s diamond industry accounted for 16 percent of the global market. That year, man-made diamonds in China amounted to 25 billion carats, accounting for 90 percent of the global total. Central China’s Henan Province is the center of domestic synthetic diamond manufacturing and sales.  

According to Li Hongbo, general manager of Luoyang Aimeil Diamond Co., Ltd, this is just the beginning of a bright prospect. “With market expansion and technology enhancement, the production of synthetic diamonds will witness significant increases in the coming years,” Li said. 
Yuan agreed with Li’s prediction. “There are around 7,000 six-sided hydraulic top presses operating in China. Hundreds of them are making gem-quality diamonds. So if the market booms, that capacity could increase at any given time with the thousands of machines available at the  
moment,” Yuan said.  

Facing China’s huge production capacity, De Beers plans to invest US$94 million in a synthesized diamond factory in the next four years. According to the company’s press release in September 2018, its new lab diamonds will retail for around US$800 a carat, while a one carat natural diamond fetches roughly US$8,000.  

As production costs of man-made diamonds continues to drop, some in the industry believe these changes will negatively impact the overall diamond market, namely the reputation of diamonds as a status symbol. “Diamonds are meant to distinguish different classes. When their prices fall, the wealthier classes will not buy them anymore,” Zhu Li, general manager of Zhongtan Jewelry Co., Ltd, told NewsChina.  

Evidence also shows that expensive natural diamonds are not appealing to millennial consumers. Furthermore, public awareness of the environmental impacts of diamond mining and human rights concerns in Africa have also had their impact on demand.  

Shan Chongxin believes that diamonds are not symbols of social stratification. Instead, the progress made in synthetics will make diamonds more common and part of people’s everyday lives. “For example, diamonds could be used as decorations on sleeves or coats,” Shan said. “This is especially attractive to fashion-conscious millennials, providing huge market opportunities for synthetic diamonds.”