Does De Beers still have a deathgrip on the diamond market?

[Surgo]

I ask this because I bought a diamond for an engagement ring recently (not from De Beers), and I'm curious. It was made in a lab, not mined from the ground, so I'm wondering if modern science has completely broken De Beers's evil or not.

[Crissa]

Yes, but De Beers doesn't own any cultured diamond producers that I know of.

They managed to survive the 80s and 90s by cracking down on competition by lobbying for laws which made only their diamonds legal to trade (blood diamonds). Strangely, they weren't any better than average of not selling diamonds sourced from nations/factions with poor human rights records.

Or not so strangely, if you knew their history.

Modern science is fighting laws that De Beers and others are creating limitations to how they're allowed to culture stones - for instance, cultured emeralds that aren't one ugly tone are illegal to sell and clear cultured diamonds are still in limbo.

I'm not an expert on this; I only know enough to avoid the whole thing, really.

-Crissa

[Maj]

so I'm wondering if modern science has completely broken De Beers's evil or not.

I seriously doubt that lab-created stones are going to break the death grip on anything. The value of something found naturally is going to be higher than synthetics - in the world of jewelry, the terms "enhancement," "lab-created," "synthetic," etc, just translate into "fake."

I'm going to guess that if anything, the free availability of synthetics will drive the natural diamond price higher... A status symbol kind of thing. It's already happened with such notables as alexandrite, Burma ruby, and Paraiba tourmaline. Yeah, if you've got a synthetic or enhanced stone that looks like those, they're cool and you are, too. But if you have a natural one... You've been admitted to the ranks of Olympus.

[Surgo]

That very last part bothers me a bit, Maj. I mean, a synthetic stone doesn't just "look like those" -- it is those. Chemically. The difference is the origin, not the product itself.

I mean, I see what you're getting at, but I think saying "looks like" is a really annoying marketing perception that De Beers is creating and should be fought whenever it appears.

Thanks for the replies. I'd be interested to know more about the illegality of selling stones in various locales.

[Crissa]

Basically, it's like Champagne; they change the meaning of the words so that synthetics can't be sold by what they are. Then they charge synthetic sellers with fraud. It isn't fraud, because 99.9% of diamonds and other stones aren't certified as to where they came from.

-Crissa

[Meikle641]

Well, a couple years ago there were two diamond makers I'd heard of: Gemesis and another one that only sells diamonds to support their goal of making diamond circuitboards.

Last I checked Gemesis is going strong, mainly selling to India but also has dealers in America (company is in Florida, IIRC).

EDIT: Since DeBeers made it so they can't call their diamonds diamonds, Gemesis calls them cultured diamonds, much like how cultured pearls are apparently worth more than natural ones.

[Maxus]

De Beers is probably still the big fish in the pond. They employ a substantial portion of the world's gemcutters, exclusively. Which means a lot of mines still have to go through them to get their gems worth something.

I recall one of my geology professors giving a brief summary of when a diamond mine was opened in northern Canada, and the local Inuit population brokered a deal to get a lot of their people trained for the gemcutting, meaning a job for life.

[Maj]

That very last part bothers me a bit, Maj. I mean, a synthetic stone doesn't just "look like those" -- it is those. Chemically. The difference is the origin, not the product itself.

The difference is that someone in a lab grew a crystal. Yeah, it's a lot more complicated than what you did in elementary school, but at its core, it really is the same thing.

Gemstones are classified as precious and semi-precious. Note the use of the word "precious" in there - it means that they are something rare and worth the effort.

Growing crystals in a lab negates the rarity. It negates the searching, the mining, the exclusivity. People don't buy jewelry because of its chemical composition. They buy it because it's special, and it makes them feel special to have it.

I mean, I see what you're getting at, but I think saying "looks like" is a really annoying marketing perception that De Beers is creating and should be fought whenever it appears.

Don't lay this on DeBeers. Alexandrite, emerald, sapphire/ruby, opals, and a few others have been commonly available as synthetics for a long time.

It isn't fraud, because 99.9% of diamonds and other stones aren't certified as to where they came from.

The vendors in your link lied about their stones' origins. They claimed to be natural when they weren't. That's illegal.

It's one thing to not mention origin at all - labeling a stone's origin is a relatively new practice - but lying about a stone's origin is another thing.

[Surgo]

Well, a couple years ago there were two diamond makers I'd heard of: Gemesis and another one that only sells diamonds to support their goal of making diamond circuitboards.

Last I checked Gemesis is going strong, mainly selling to India but also has dealers in America (company is in Florida, IIRC).

EDIT: Since DeBeers made it so they can't call their diamonds diamonds, Gemesis calls them cultured diamonds, much like how cultured pearls are apparently worth more than natural ones.

Yeah, now that you mention it, the company mine came from calls all theirs "created diamonds".

Gemstones are classified as precious and semi-precious. Note the use of the word "precious" in there - it means that they are something rare and worth the effort.

AFAICT, every gemstone listed in your post is still labeled "precious" despite being creatable in a lab, so if that is correct I don't think "precious" means what you claim it does.

[Crissa]

The vendors didn't say where the stones came from.

...Because like I said, most natural stone vendors don't.

People don't buy stones because they're pried from the earth - they buy them because they're pretty and there's been several hundred years' advertising campaign to make people want them.

The whole bit about wanting natural stones? That's just you picking up their new claptrap, Maj. You're a perfect example of the LCD market they're aiming for.

There is no inherent value to a stone pried from the earth, paid slave wages for, and coddled by various cartels.

-Crissa

(Cultured pearls still take alot of time to create, and are generally of more regular size and luminosity, hence a high value and cost. Cultured diamonds/carborundum now can be just as bright as mined stones, hence the new focus on 'natural'.)

[Maj]

The vendors didn't say where the stones came from.

...Because like I said, most natural stone vendors don't.

According to your own link, first sentence:

There have been a lot of reports lately of synthetic corundum being sold online via eBay directly from Thailand as natural...

I don't understand why you think that's not lying.

And gem origin is starting to be a very big deal. Stuff like George Bush's law declaring a ban on imported Burmese gems means that vendors have to know whether or not the gem is from Burma. Which means labeling. Combine that with synthetic/natural, and the industry is very much moving towards labeling point of origin.

People don't buy stones because they're pried from the earth - they buy them because they're pretty and there's been several hundred years' advertising campaign to make people want them.

Jewelery and personal adornment have been around for a very, very long time. And rare jewelry and personal adornment is worth more than not-rare jewelry and personal adornment. I do believe that's a pretty basic reflection of supply and demand.

It's not even a question of advertising. It's a question of people wanting to look good and wanting to look rich. That's such a primal instinct that animals have it. Yes, advertisers may prey upon that desire, but it's not like it's the advertisers' faults that the desire is there.

The whole bit about wanting natural stones? That's just you picking up their new claptrap, Maj. You're a perfect example of the LCD market they're aiming for.

There is no inherent value to a stone pried from the earth, paid slave wages for, and coddled by various cartels.

Is there anything you consider inherently valuable?

I make my own jewelry and I buy both synthetic stones and natural. I don't much care what the stone's origin is as long as an enhancement or "culture" doesn't interfere with a stone's durability.

But just like culturing pearls made them more widely available and thus cheaper, culturing a stone does the same thing.

And this doesn't even take into account the whole "lab" thing. That hasn't gone over well in much of any industry its touched. Why it would go over well in the world of gemstones is beyond me.

[Surgo]

And this doesn't even take into account the whole "lab" thing. That hasn't gone over well in much of any industry its touched. Why it would go over well in the world of gemstones is beyond me.

Wait, what? You're going to have to explain this one, because it doesn't make any sense to me.

[K]

De Beers has enough diamonds in their vaults to supply world-wide diamond demand for several hundred years. This is why they support laws against blood diamonds.... to keep their monopoly.

By law, synthetic gems are required to have certain chemicals in them to distinguish that they are in fact synthetic. Some of the more popular chemicals glow in UV light, making it easy to tell that they were made in a lab.

Otherwise, people would break the monopoly. Gemstone selling depends entirely on artificial markets, so much so that De Beers regularly gets hauled into court for price-fixing.... because they price-fix. Allowing synthetic gemstone to compete with natural just insures that the market bottoms out and they lose tier huge profits.

[RobbyPants]

By law, synthetic gems are required to have certain chemicals in them to distinguish that they are in fact synthetic. Some of the more popular chemicals glow in UV light, making it easy to tell that they were made in a lab.

Why is that even a law?

This is a rhetorical question. I know why, but it still shouldn't be that way.

[violence in the media]

The difference is that someone in a lab grew a crystal.

As opposed to someone pulling it out of the ground? What's so important about that?

And this doesn't even take into account the whole "lab" thing. That hasn't gone over well in much of any industry its touched. Why it would go over well in the world of gemstones is beyond me.

Because, in the world of gemstones, you cannot determine, without being explicitly told, whether or not a stone was grown in a lab. Crystal growth is probably the closest thing we have to Star Trek replicator technology, as you can literally spin off perfect specimens out of base elements.

Like it or not, the "lab" is the industry of modern technology. Unless, of course, you think that your computers and cell phones are hand-carved by monastic artisans.

[Koumei]

Unless, of course, you think that your computers and cell phones are hand-carved by monastic artisans. :roll:

It sometimes seems like my laptop was. And that's not a good thing.

[Crissa]

We have a chunk of quartz grown in a lab - it even has the little electrodes embedded in it. It's perfectly clear. I mean, absolutely clear. And, of course, as hard as quartz. It was a freebie from some telcom equipment manufacturing company at a conference Sammi had to attend.

Most countertops and walks are manufactured stone, too. It's cheaper.

-Crissa

[Maj]

Wait, what? You're going to have to explain this one, because it doesn't make any sense to me.

In the world of marketing, one of the most difficult things to overcome is the perception of artificiality.

Things that have historically come from Earth but are now made in some science lab somewhere are not perceived well by the general populace. Companies all over the world hire PR firms to think of words and euphemisms to jump the hurdle - hence things like "cultured" diamonds rather than lab-grown.

This shouldn't be a particularly shocking revelation. It's not like it only applies to jewelry. It's been something that companies have had to face in the food industry, chemical industry, furniture, clothing, cosmetics...

It's one thing to produce a technological device in a lab. That's what science is there for - making you an awesome new cell phone. But imitating something natural? That's a boundary that people in general have a tough time dealing with.

[Surgo]

In the world of marketing, one of the most difficult things to overcome is the perception of artificiality.

I didn't mean the why (though I asked in a pretty obtuse way, so it's not surprising that anyone would have interpreted me as asking that). What I meant was, from this: "That hasn't gone over well in much of any industry its touched" -- what industries are we even talking about here? I've seen the slow adoption in the world of jewelry (slow but steady, mind you). But other industries, from the ones you listed, in no particular order...

* Chemical industry -- what? Every chemical basically comes from a lab. Where did you get this information? This is the one on your list that completely puzzles me.
* Food industry -- outside of the 'organic farming' movement, which appears to mean a number of different things depending on what state or even what county you are in (my fiance's extended family are "organic farmers"), genetically modified everything dominates the landscape.
* Furniture -- I can see this one. Whatever leather synthetic doesn't sell as well as leather, probably for marketing reasons. I think this is distinct from the jewelry thing though, because the leather synthetic is different from leather and the jewelry synthetics are no different from mined jewelry.
* Clothing -- like furniture, do we even have an example that's equivalent to synthetic vs mined diamonds? Polyester isn't the same thing as cotton, even though it's built from the same polymer. Still, I'm not aware that this is a field that ever had trouble marketing stuff originating in a lab -- do you have any examples here? I'm curious.
* Cosmetics -- I have no expertise or even any experience at all in this one.

Companies all over the world hire PR firms to think of words and euphemisms to jump the hurdle - hence things like "cultured" diamonds rather than lab-grown.

I don't think this is quite true -- if it is, it's not nearly as universal a statement as you're making it seem. There are four major synthetic diamond players in the United States. One of them, D.NEA, has their marketing arm refer to them as "lab-created" -- and they are selling extremely well.

[Maj]

By law, synthetic gems are required to have certain chemicals in them to distinguish that they are in fact synthetic.

I tried to look this up, but I couldn't find any law to this effect. There are companies who voluntarily put easily-identifiable chemicals in their diamonds, but nothing that I've found says it's required.

But I did learn this:

The FTC[/url]]It is unfair or deceptive to use the word "ruby," "sapphire," "emerald," "topaz," or the name of any other precious or semi-precious stone, or the word "stone," "birthstone," "gemstone,'' or similar term to describe a laboratory-grown, laboratory-created, [manufacturer name]-created, synthetic, imitation, or simulated stone, unless such word or name is immediately preceded with equal conspicuousness by the word "laboratory-grown," "laboratory-created," "[manufacturer name]-created," "synthetic," or by the word "imitation" or "simulated," so as to disclose clearly the nature of the product and the fact it is not a natural gemstone.

---

@Surgo:

This is a really hard topic to write about because my references are unfortunately parked on a shelf in my local library. I can suggest that you check out books like Trust Us! We're Experts!, but I don't have them to quote from. Also, in the case of diamonds, it seems like because the chemical composition of one rock is precisely the same as the chemical composition of another rock, you are disregarding the perception of the viewer and declaring it irrelevant.

If that is, in fact, the case, trying to explain the perceptions of consumers to someone who couldn't care less is bound to fail. That being said...

* Chemical industry -- what? Every chemical basically comes from a lab. Where did you get this information? This is the one on your list that completely puzzles me.

Of course every chemical comes from a lab. And making those chemicals good is why there are commercials on TV where doctors harness the power of plastic to save people in the hospital.

My point is not one of chemical composition, it's about public perception. When it comes to technology, being from a lab is OK. But chemicals you use around the house, for example, are full of things that make them smell like they're from nature. There's lavender and vanilla in your laundry detergent. There's lemon and orange in your dishwasher powder. Shampoo smells like anything from strawberries to rain.

* Food industry -- outside of the 'organic farming' movement, which appears to mean a number of different things depending on what state or even what county you are in (my fiance's extended family are "organic farmers"), genetically modified everything dominates the landscape.

But people don't know that. There are genetically modified organisms that make your cheese. The soy crop is 90% GMO, and the corn crop is 80% GMO, and those crops are everywhere - the xylitol in your gum, the lecithin in your chocolate, the vanilla extract in your pantry... The outcry against knowing that something is GMO is huge. In 1994, the FDA ruled that labeling GMO vs. non-GMO was misleading because the foods were identical. Therefore, foods don't have to tell you whether or not something is GMO. But foods that are labeled as irradiated, GMO, containing rBST - they don't sell as well.

* Furniture -- I can see this one. Whatever leather synthetic doesn't sell as well as leather, probably for marketing reasons. I think this is distinct from the jewelry thing though, because the leather synthetic is different from leather and the jewelry synthetics are no different from mined jewelry.

I was thinking more in terms of wood - solid versus veneer versus press board. The point is the same, though. People usually would rather have the real stuff. It's economy that drives the synthetics.

* Clothing -- like furniture, do we even have an example that's equivalent to synthetic vs mined diamonds? Polyester isn't the same thing as cotton, even though it's built from the same polymer. Still, I'm not aware that this is a field that ever had trouble marketing stuff originating in a lab -- do you have any examples here? I'm curious.

The clothing world is constantly trying to imitate fabrics like silk (hence rayon, nylon, polyester), and fuzzies like wool (acrylic). In some cases (nylon), the lab creation is technologically superior to the product being imitated. But again, the products aren't generally advertised as synthetic. They're advertised as silky, wrinkle-resistant, water-repelling... Cotton is advertised as cotton. You want it because... Well... It's cotton. It's the fabric of our lives (it also doesn't melt in the dryer which is a real bonus for me).

Clothing for things like sports and extreme weather can be marketed as high tech and pull it off - you're marketing to a specialized group that requires innovation. But your average person's clothes don't get marketed as synthetic.

* Cosmetics -- I have no expertise or even any experience at all in this one.

My mother and I attended a class a week ago on the use of essential oils as cleansers and ingredients in cosmetics. My comment when we walked out: The lecturer needs to brush up on her chemistry. Even someone teaching a class designed to give education credits to professionals was repeating the "nature is good, synthetic is bad" line. Especially when it came to stuff like what's in your sunscreen.

I don't think this is quite true -- if it is, it's not nearly as universal a statement as you're making it seem. There are four major synthetic diamond players in the United States. One of them, D.NEA, has their marketing arm refer to them as "lab-created" -- and they are selling extremely well.

They have to say that. As per my response to K, it's illegal not to. But on that note...

I watched Miss USA a week ago. I heard about the impressive Diamond Nexus Labs crown. It was environmentally friendly and conflict-free. D.NEA's diamonds are also eco-friendly and conflict free. Both diamond labs employ world-class designers to showcase their gems. Gemesis uses the term cultured all over the place.

My point is that people's perceptions of lab-created stuff isn't very good... Unless it's technology. It doesn't matter if it's chemically identical or not (vanillin, diamonds, insert other chemical thing here). If you're going to sell something made in a lab, you have to market other properties about that thing that will appeal to people (conflict-free, eco-friendly, designer, economical... Diamond Nexus even goes so far as to suggest that if you buy their product, you "reward your intelligence"), or you have to euphemize the lab (cultured, grown).

People will always want to know they're buying the real thing; they're not getting the wool pulled over their eyes. And if there's a precendent of thousands of years of finding a rock in a mine outside*, convincing people that the same exact rock can be made inside is going to be hard.


*Or if a company tells a good story about how rocks have been found in mines outside for thousands of years... Really, marketing is about a product's story - its public presentation - not the actual product, itself.



---

As an added bonus, I found an absolutely splendid pdf {OK, 133 KB, Diamonds, DeBeers} that talks about all of this, from DeBeers relinquishing its hold on the diamond market and switching its focus to branding, to the marketing tactics of the synthetic diamond makers.

And this pdf {OK, 913 KB, Science, Diamonds} explains how synthetics are made and identified.

[Crissa]

Yes, when you sue people for selling diamonds which are indistinguishable from your diamonds - just theirs were made this millennia and not several eons ago. They look the same, they sparkle the same, they're the same hardness and can be the same color.

Do people complain about synthetic (recycled, extracted) iron vs natural iron? We ran out decades ago. Or mercury mined gold vs crystalline?

Synthetic diamonds are not fake. However, there is a very large and concerted effort to make sure they're called that.

Anyhow, give five more years and there will be no more 'real' Champagne, either.

-Crissa

[Surgo]

I'm really tired right now; I'll try to respond to the rest where I can in the morning. Not trying to argue or anything, just a conversation. I have to respond to this though:

They have to say exactly that. As per my response to K, it's illegal not to. But on that note...

Except...they don't have to say that. Chatham calls theirs "created" (maybe the FTC ruling got expanded or something because I didn't see that one in the list), others call them "synthetic", you already mentioned Gemesis. D.NEA is the only one that calls them "lab created", specifically referencing the fact that they are grown in a lab -- and they have absolutely zero problems with sales.

(edit: clarified what I was trying to say a bit)

Also, in regard to genetically modified farming:

But people don't know that.

This must be a location thing, or the fact that I've spent the last 5 years in high-end college towns, but I haven't met anyone (literally) who I talked about farming with who didn't know that just about everything was genetically modified. Conjecture, but I thank the organic farming lobby for that -- they got the word out pretty good. And it seems that most people still don't care.

[Gelare]

I expect diamonds labeled as "lab-created" would have some trouble in the wedding ring market, but in the industrial/manufacturing setting? It'd be a benefit.

[Vebyast]

I'm just throwing in my two cents here, but if (when?) I buy a precious stone for jewelery, I'm almost certainly going to get one that's explicitly man-made. It would be a rock-solid (hah!) reminder of just how bloody awesome science is.

I'm kind of surprised they don't market them like that, now that I think about it.

[Orca]

Do people complain about synthetic (recycled, extracted) iron vs natural iron? We ran out decades ago. Or mercury mined gold vs crystalline?

Synthetic diamonds are not fake. However, there is a very large and concerted effort to make sure they're called that.

Anyhow, give five more years and there will be no more 'real' Champagne, either.

-Crissa

I agree with you about diamonds, but there's iron sand being mined off the Taranaki coast right now. Iron isn't something that most consumers buy for itself, either.

I'm not sure what you're saying about Champagne - the French look to have won the battle to keep that particular marketing tag.