The diamond industry depends on the illusion of scarcity. The real scare for them is that this guy has a diamond mine with a plant equipped to detect large diamonds by X-ray transmission and automatically kick them out of the rock stream before they hit the rock crusher. Five months after he installed that, he got this huge diamond. What are the odds another one will show up in the output bin in the next year or two?
The diamond synthesis industry keeps getting better. De Beers can't stop them any more.[1] (They tried with Gemesys, now Pure Grown Diamonds. The CEO was a retired US Army general and wasn't intimidated.) There's even a startup in SF now. "Your diamond is hot-forged from pure atoms in our California foundry."[2] De Beers has been frantically trying to keep ahead with machines that can distinguish synthetic from natural diamonds. They claim to be succeeding, but the test equipment required is getting more and more expensive. The diamond industry dug itself into a hole by convincing buyers that the best diamond is a flawless crystal. Making flawless crystals is what the semiconductor materials industry does, and the techniques transfer to diamond making.
Small diamonds are very cheap. Diamond grit for cutting tools is about $100/Kg on Alibaba.
I read an article in the financial newspaper today about fake diamonds arriving in Antwerp from India mixed in with real ones in 'diamond melee' packages (lots of small diamonds).
I got terribly annoyed reading this article as it constantly conflates 'fake' and 'synthetic', as if they're synonyms. The 'fake' diamonds are actual diamonds, though not natural ones. Clearly a journalist who's echoing the industry propaganda.
Apparently there's an estimated 10,000 diamond making machines churning them out in China. Good!
I -love- that the Canadian company started marketing 'conflict free diamonds' as a way to break the deBeers cartel.
It makes me wonder if the synthetic guys have a leg to stand on regarding the ecological footprint of pit mining versus lab grown, or if it's about the same. Maybe they could cook up their own marketing label and stop trying to hide what they're doing.
That's what Diamond Foundry, the SF startup, is doing. They have a good story: "We produce gem quality diamonds above the ground in America — in harmony with nature and humanity. A carefully chosen earth diamond is at the origin of each of our diamonds. In the perfectly nurturing environment inside our foundry, diamond crystals want to continue to grow."
The CEO was the founder of Nanosolar, which printed solar cells and went bust because, although the process worked, it wasn't cheaper. The investors in Diamond Foundry are the usual suspects - Zynga's founder, Sun Microsystem's founder, Facebook's co-founder, a former eBay CEO, etc. They even have an actor, for coolness. An endorsement by Leonardo DiCaprio: “I’m proud to invest in Diamond Foundry Inc.– reducing the human and environmental toll of the diamond industry by sustainably cultivating diamonds without the destructive use of mining.” It's a classic startup story.
They claim to be "0.001% Rare"; this reflects their market share, like a microbrewery. Their big problem seems to be distribution. Only five small jewelers handle their product. De Beers punishes jewelers who do things they don't like by excluding them from "sights" where jewelers can buy diamonds at wholesale prices. This makes it hard for competitors to get access to retail outlets.
Aaaand that's the irony of it. I'd literally start a jeweler just to carry 100% American Made Conflict Free diamonds, and hang the biggest goddamned American flag out in front of my shop I can find...
... just to piss in the cornflakes of the DeBeers cartel.
'Conflict' diamonds can be viewed as another way for DeBeers and others to control the trade, by limiting the supply of diamonds into the market.
Global Witness, the organisation who pushed for the 'blood diamonds' campaign, disavowed it in 2011, because the scheme did not actually provide effective guarantees that the diamonds sold were not blood diamonds.
Others have pointed out the strange absence of any 'blood emeralds' scheme, even though they are often sourced from the same corrupt organisations and countries. But the fact that natural emeralds are much rarer than diamonds means that no-one needs to artifically limit their supply...
You're correct. Cultured (usually fresh water) pearls are farmed ones like Akoya pearls. The expensive ones are just referred to as natural (saltwater) pearls.
Yeah, that's what I was going for as one is naturally caught and the other is farmed. Not much difference given diamonds created in the lab are more pure than those mined.
What a funny concept. Is the index of refraction different from diamond? Is the placement of the carbon atoms not on a diamond lattice? Or is the lattice constant somehow smaller or larger?
The value of a diamond is in its ability to display the wealth of the wearer. If a diamond no longer indicates status, it is "fake". That's the truth they're all beating around the bush of. It's pathetic, but there it is.
They're not fake by that metric either though. No one can tell the difference between a synthetic and a high quality natural diamond - certainly not with the naked eye. So you're free to pretend your diamond came out of the dirt if you so desire.
Eh, splitting hairs, but it's 'fake' only in the sense of art forgery -- one of the paintings is in fact painted by the big-name artist, while the other one, no less marvellous in its execution and visually indistinguishable, isn't. Since only the two painters know for sure, the rest of the world relies on other people's word.
Diamonds are a representation of money. No one can tell the difference between a legitimate $100 bill and one printed using identical equipment and processes by some organization other than the Federal Reserve. Still, a sufficiently large counterfeiting operation would diminish the value of all USD.
You missed my point. If a "genuine" character of a diamond is its ability to display wealth, then a synthetic diamond is "fake" by that measure, or "ersatz" or whatever you prefer. The point is that actually expressing that would make diamonds tacky and pathetic, so it's all done with implications, lobbying, and advertising.
Or rather, the synthetic ones are only 'fake' insofar as they are passed off as natural (perhaps to gain a higher price). Put a different label on the box (for instance, the label 'Diamonds'), and they're 'real' again.
DeBeers managed to convince the US Federal Trade Commission to require synthetic diamond manufacturers to label their products as synthetic. But China doesn't require that. China trade practice barely distinguishes between diamonds and cubic zirconia. If you want to order diamonds from China, you have to specify HPHT (high-pressure high temperature), or CVT (carbon vapor deposition) or you'll probably get cubic zirconia.[1]
Nobody can detect better HPHT or CVT diamonds without lab equipment, anyway. Even under a microscope they look very similar. If you hit them with UV light and take a picture milliseconds after the light goes off, the fluorescence patterns are different. There's overpriced test equipment based on this fact. (Now there's a potential phone accessory - a UV flash that plugs into the phone for diamond grading, with associated app. Tiny market, though.)
Another great benefit of lab-created diamonds: you can get them with the impurities you want. Want a red or a blue diamond without the silly price tag? You've got it!
I bought my wife a blue diamond engagement ring in 2010 (blue diamonds have boron in them). The price was pretty good then. I can only imagine that since they've gotten bigger, cheaper, and purer since.
Same process has been done to other gems. I've bought emerald jewelry in the past; all lab-created of course.
For other gem materials, the synthetics are so good and cheap it's embarrassing that expensive jewelry is made from them. You can buy cheap sapphire bar stock[1] or ruby rod[2] on Alibaba. Synthetic emerald gems come in bulk in plastic bags.[3]
Also, just actually checked your links and it's really not what you're describing. Link #1 and #2 are fused silica -- not jewelry gemstone material there. Link #3 isn't even emerald, it's spinel. Synthetic emerald is more expensive.
Yeah, of course, just saying that specific source is obviously bad.
If you're a jeweler you want to get something certified anyway. I don't think a Chinese distributor's claim of AAA-quality emeralds is worth the electrons it took to show it to me.
One thing that's worth keeping in mind is that the usual term for "emerald" in Chinese is 绿宝石, which literally means "green gem". It's understandable that they might be confused about which green gems are actually "emeralds". (That particular ad still doesn't work even if you forgive use of the word emerald, though...)
Your link (3) is deeply troubling. It claims to be "synthetic emerald spinel". Emerald is beryl, not spinel. It claims to have a hardness of 9. That would make it corundum; neither beryl nor spinel is that hard. I'd really rather buy gems from a source that can describe them without contradicting itself in multiple different ways.
You can buy the cut gemstones pretty cheap too. My wife is an artist; she has a massive catalog that contains various created "precious" gemstones for very reasonable prices.
The finished jewelry itself can stand to be more expensive, as creating that piece is an art.
And DeBeers is suing IIa Technologies, which is arguably the current largest (by revenue) maker of synthetic gem diamonds. I think the dinosaur's brain has finally perceived the mammals chewing on its tail.
DeBeers won't prevail. The diamond market is about to change completely. The biggest challenges companies like Diamond Foundry and IIa Technologies face is building up their own sales channels. DeBeers is still fairly successful in excluding newcomers from the bourses, or diamond exchanges. But channel building is simply a matter of time and $.
Chemical vapor deposition is cheap, and there are many participants. There's Diamond Foundry, IIa Technologies, Scio Diamond Technology, Pure Grown Diamonds, and a ton of small startups in the PRC. If you want a diamond doorknob, you'll probably be able to buy one for $1K in ten years. Five years if you're good friends with somebody in Shenzhen.
> (They tried with Gemesys, now Pure Grown Diamonds. The CEO was a retired US Army general and wasn't intimidated.) There's even a startup in SF now. "Your diamond is hot-forged from pure atoms in our California foundry."
This is why they've switched their marketing efforts towards the emotional. It's always been that way with the "A Diamond is Forever...", but now even more so with the emphasis on NATURAL diamonds. Lots of DeBeers and diamond cartel marketing stuff that slyly insinuates you don't value your relationship if you don't buy a REAL GENUINE diamond.
The value of a diamond in an engagement ring doesn't have anything to do with how it looks. What has always mattered is what you spent, so as long as they can create reasonably fixed pricing tiers people will spend large amounts of money on diamonds.
It would make a lot more sense for a suitor to give his sweetheart a wad of cash and say "I love you this much", but that's a little too transparent.
I'd say burn the cash.The beauty of the diamond scam is that the resale value of diamonds is practically zero. Just as the peacock tail is costly to have and has zero practical value other than showing that its owner can bear the cost.
It is not just about spending the money; the diamond (and jewelry in general) is a signaling mechanism. It is supposed to communicate to OTHER people 'my spouse is successful and loves me this much'. A wad of cash does not do this, unless you literally carried it around on your hand.
Out of curiosity is there a place to buy a large synthesized Diamond to be used as paperweight? I though that would be cool and since I don't need it to be cut the price should be pretty reasonable.
Synthetic diamonds are not that cheap (about 50% of the price of the natural ones), because they are not that easy to make. The large synthetic diamonds are grown in HPHT medium (>2600 degrees C), and even if they are made by a machine, they still grow at an incredibly slow rate (maybe one micron/hour), so you have to keep a huge temperature and pressure for months to get a big one - and maybe at the end it shatters and you just get 3 carat diamonds from it. So the costs are not really paperweight-ready (or maybe you have a few millions to spare for a paperweight).
The biggest synthetic diamond data I could find is 60-carat[1] unpolished (10 carat polished).
Diamonds are also not really good as a paperweight (one carat is 0.2 grams, a sheet of A4 paper is heavier than a 25-carat diamond).
Large cubic zirconia jewels are available.[1] This one is 45mm across. Another supplier offers up to 200mm diameter, but that may be a special order item.
It really depends on how loose your classification of "diamond" is and how large you want. Cubic zirconia is quite popular with hobbyist and some professional faceters and is quite readily available in a range of colours (try searching for cubic zirconia rough) but it's more difficult to manufacture the larger you get. Moissanite is much closer to natural diamond in both hardness and refractive index but it still seems to be fairly inexpensive uncut. Not too familiar with other diamond synthetics but the range seems to be growing.
That firewood isn't far off the mark. There really is a market for premium firewood. I remember seeing two types on sale at a local gas station: Normal firewood bundled with a few turns of plastic wrap, and "guaranteed spider free" firewood sealed inside bags for double the price.
Fyi, don't trust bought firewood. Most of it isn't properly dry and can clog up stoves. Buy and stack it yourself for a season.
I would guess that the natural diamonds' prices have fallen as the synthetics increasingly set a price floor. They have such large stockpiles of diamonds and they have to bring in revenue, they can't simply pretend the synthetics don't exist on the market and price accordingly. Or to put it another way: for such perfect substitutes and commodities, the prices should be near-identical, and so it is wrong to try to imply that consumers haven't saved a ton of money because the prices are similar; you need a time-series of prices.
We all still call it Champagne even though rarely does anyone drink sparkling wine from the Champagne region. I suspect diamonds will be the same: most people will consume the "synthetic" ones, which could by almost any physical characteristic be superior, and a small group of people will only buy "natural" on principal.
In order to be called Champagne it has to come from the Champagne region of France much like Scotch has to come from certain areas of Scotland and how Bourbon has its own set of requirements (seemingly only applying to Canada and the United States).
My suggestion: buy your wife or girlfriend something more valuable than jewelry such as self-defense classes or maybe driving lessons on a track. Despite the short duration of the lessons, it'll still be worth more than a diamond ring in terms of pragmatic value.
Is it impossible for a new player to discover a mine and start selling them for cheaper? Why doesn't this happen if they are so overpriced? They don't all go through the same company, so I would expect someone to try to undercut their competitors.
What Hondor said, and it's extremely capital-intensive to develop a mine to production. Even after all the geoexploration to find a deposit, it's on the order of $1B - $2B to get into production. You have to move and inspect hundreds of tons of rock to find a carat of diamond in most mines [1].
Mined diamonds can't ever compete with CVD diamond synthesis costs. As more CVD producers come online, I think we'll see prices for synthetics drop drastically. There's a lot of margin available for market-grabbing.
They kind of do. Prices for synthetics are typically ~ 75% of the natural equivalent. For CVD synthetics, there's significant margin in that pricing, margin that could be used to initiate price wars.
For now, the synthetic vendors are riding on diamond's traditional high pricing as sustained by artificial scarcity. They're cheaper than the naturals, but not all that much. I think it's their way of maintaining high margins during early business & market development.
I expect pricing to change when there are more suppliers and sales channels. Probably a couple of years to a definite downward inflection point.
The idea of the cartel is that nobody would want to sell their diamonds cheaper when they can sell them for more through deBeers. They don't want to get into a price war with each other since then every player will lose.
Doesn't everyone in every industry lose if they go into a price war? But they do it anyways. I'm not trying to be argumentative, I just sincerely don't understand what makes diamonds different from other products.
"You will never lose betting on human stupidity." Natural diamond gemstones are valuable, mostly, because of human stupidity. Chances are, that will continue for the simple reason that it's persisted for so long already.
It is difficult to feel for a cartel that was so powerful as to establish the country of Rhodesia[1]. The exorbanant value of diamonds have hurt people for a long time, well before the modern notion of "blood diamonds."
This could really use a summary version for people who don't need to know what he had for breakfast.
I.e. a version that focuses just on the diamond trade, and skips the "color".
In really short: The seller tried to bypass the traditional people who buy and see these diamonds, and they were not happy. Typical unethical behavior of people trying to protect a dying income stream.
So if synthetic diamonds are coming down in price, what other uses are there for them? They seem to be quite good at conducting heat. Could we use them in other areas where we are currently using other less expensive but less efficient alternatives?
Yep, I remember years ago Inventgeek made diamond heatsink paste [0], nowadays you don't even need to make it yourself, they have commercial stuff as well [1].
That would actually be amazing, imagine the PR power Apple could put behind "perfectly manufactured, conflict-free diamond screens", "better and more flawless than any natural diamond, only the absolute best for our customers".
They could even create the equivalent of a "perfect pixel" guarantee - "perfect lattice" guarantee, the diamond screen is flawless down to the atom or your money back.
That could flip the script on DeBeers in a big way.
Well, Apple tried for the iPhone, and I do believe the watch actually does have a synthetic sapphire screen.. Apple purchased a major stake in a sapphire-making business [1]. But it seems that it still was a bit on the tricky side compared with the recent upgrades in glass technology.
The predecessor to your phone, my Nexus 5, also contains Gorilla Glass 3, and yeah, I don't use a case, I don't use a screen protector, and there are no real scratches on the screen, and it has rode around in my pocket for over 2 years.
How brittle is diamond? We know diamond is the hardest, but how brittle is it? It is good to have a non-scratching phone screen, but not if it is really brittle.
The short answer is that diamond is fairly brittle. It has four cleavage planes and I assume this is related to the fact that diamond can be cut in such ornate ways.
Now, that doesn't necessarily mean that a diamond screen would be worse than what exists today but it wouldn't be something invulnerable and resistant to any impact either.
Can you expand on this? The cost of material for any coating is always very low, so I assume you are referring to some kind of technological advancement that makes coating easier/cheaper?
"The cost of material for any coating is always very low"
Well...not, historically, for diamond. :-) That's changing.
Not being an expert in this field, I would guess that the barriers would lie primarily in tooling up the process to handle kilometers of material at a go, rather than making one-off surgical cornea scalpels.
Now I'm wondering just how many kilometers of razor blades are produced annually. Many, I'm sure.
Disposable razor blades are not a significant cost in most people's lives and most of those same people see a big advantage in convenience. There's obviously a lot of marketing in the razor/blade game but a lot of it is aimed at getting you to buy from one company rather than an other.
As well as to buy more a more expensive class of product which may or may not be better--yes. But very few people have to be sold on buying a disposable razor.
> Disposable razor blades are not a significant cost in most people's lives
That's not the point. The point is that the industry survives by keeping the consumers ignorant.
> and most of those same people see a big advantage in convenience.
I wonder how "these same people" decided that there is "a big advantage in convenience" if they have no point of comparison.
Because looking at the friends I have almost nobody people under forty has ever even tried something other than an expensive disposable blade, or perhaps a fancy electric razor. The only people I know who are the exception to it are hipsters who have since switched to growing big bushy beards. Which brings me to my other point:
> very few people have to be sold on buying a disposable razor.
Yeah, because they don't even know there are alternatives. I don't know about your supermarkets, but the ones I've been to don't even sell safety razors any more. A Mach 2 is cheapest thing for sale, and that's what I started out with. I had to buy my double edge at a barber, and I buy razor blades through the internet.
Regardless, compare the cost of one double-edge razor blade to the cost of one of those fancy N-blade thingies with aloe vera gel strips and whatnot. The price goes from the order of cents to the order of dollars (or euros, in my case).
I have a really hard time believing that the actual cost of making these things is 100 times more expensive too; in fact the shaving industry has been accused of mark-ups around 4,000 percent[0]. Either way, the convenience definitely is definitely not 100 times higher.
>Either way, the convenience definitely is definitely not 100 times higher.
The convenience/cost relationship is not linear. Cost of a 500ml bottle of water: $1. Cost of refilling that bottle from the tap: $0.0005. Convenience factor difference: almost definitely not 2000x. Yet people still buy bottled water. Is that a paradox? I don't think so, because people put various values on things like time and mental space occupied which may very well dwarf the absolute cost involved.
No, that's also marketing[0], and by the way, the bottled water industry is incredibly destructive for the environment[1]. Also, I don't see how my argument involved any paradoxes.
You know what "convenience" really means in this context? Taking whatever is available at the very limited selection at the supermarket[2], without putting any more thought or effort into it. But when you think about that, that's creating a demand by simply not offering or mentioning the cheaper, less profitable options (because obviously, supermarkets make more money selling the expensive stuff too).
Diamond is a useful optical material. Pretty much any material that can transmit a desirable wavelength range (e.g., IR for diamond), can be worked into a desired shape, and isn't evil in some way (e.g., toxic), has a use in optics. Unfortunately, a few hundred or thousand custom diamonds per year isn't enough for anybody to invest in making them cheap.
Diamond (the material) has lots of uses. As Neal Stephenson points out in "The Diamond Age," if you can make diamond cheaply, you can make large thin-shelled dirigibles out of it that become lighter than air when you evacuate a little air out of them. Diamond is the only material strong enough to make this possible.
If you can make whatever out of diamond, I want cooking ware. You can watch the stuff cook, it's insanely heat conductive, and very resistent to scratches, so no problem using a sharp pointed fork to stir a bit.
How good is it with internal temperature differences, though? If it can handle it, you could always just embed a flattened iron ring for induction cooking.
According to this article (https://www.researchgate.net/publication/225376850_Compressi...), the compressive strength of a perfect diamond is, from the weakest direction, -223.1 GPa. The difference in pressure between atmospheric pressure and a vacuum averages 101 kPa at sea level.
Natural diamonds are not perfect, and manufacturing a large perfect diamond is probably very difficult, but I don't think it can be ruled out as impossible.
The problem is that those perpendicular stresses need to be distributed within the shell structure itself. Locally, they're converted to parallel stresses. There's the additional problem of buckling, which has its own dynamics.
I would love to see this diamond in person, but I can't see it being a good investment given the technological change coming, both in sorting for diamonds up to 5000 carats and the real risk someone will figure out how to grow diamonds this big.
I agree. It seems that Lamb advertising that he's installing equipment to look for ~3-5kcarat diamonds is signaling 'just wait, this 1100 carat diamond is gonna be yesterday's news soon.' The expectation that supply will grow ought to drop the price of this super large stone for anyone willing to wait a few years for the next massive one.
However, I do think there will always be a market for large diamonds extracted from cold hard Earth. Yes, synthetics will likely eventually surpass these stones. Owning one of the largest natural stones ever found will probably always seem sexier in many (read: likely non-high-tech) circles of ridiculous wealth.
What was most interesting to me is that giant diamonds like this regularly get crushed to bits by the extraction process. I wonder how many other 1000+ karat stones have been destroyed in the history of diamond mining.
Not that hard to estimate. Lucara mines ~90k carats per quarter (http://www.lucaradiamond.com/i/pdf/CP-Q12016.pdf), or 360k carats per year. They recovered the OP stone in question after 5 months, and it was not that unprecedented as a sale by them of the Constellation 813-carat stone is also mentioned. So 1 every 6 months or 2 per year is entirely possible at this point. But we'll go with 1 1k stone per year, or 1 per every 360k carats mined. Global diamond output is somewhere on the order of 137 million carats per year (http://www.mining.com/web/despite-de-beers-and-rios-efforts-...). If all mining has a similar rate but they are crushing the big ones, then that suggests that 137000 / 360 = 380 stones are being destroyed each year currently.
Production has risen steeply over history (http://www.gia.edu/cs/Satellite?blobcol=gfile&blobheader=app...) but "The total global production from antiquity to 2005 is estimated to be 4.5 billion carats". So for an all-time estimate, 11*360 + 4500000 / 360 = 16460.
This seems improbably high: surely at least some of those 16k giant stones would've survived? So maybe Lucera's current mine got lucky, or it's unique in providing lots of giant stones. ("It has an enviable share of the world’s heavyweight diamonds. Of the 52 biggest diamonds discovered in the past three centuries, 10 have come from Lucara in the past three years. With modifications under way at the mill, Lucara will soon be able to recover diamonds up to 3,000 carats, and next year, up to 5,000 carats—as big as a softball.") Still, I would personally stay the hell away from giant diamonds as any kind of investment or prestige trophy.
The Karowe mine is unusual in its high proportion of large diamonds. The only similar mine is Letseng in Lesotho. Both Karowe and Letseng have very low grade ore (in terms of carats per tonne) but high proportion of large stones. DeBeers discovered Karowe but never developed it because it was judged uneconomical; Lucara took a big bet that the quality of the diamonds would offset low yield.
I wouldn't extend the ratio of large diamonds found at Karowe (or Letseng) across the whole industry. They are fairly unique mines.
Normally find this kind of long-form article terribly tedious, but I was engrossed. I like that he didn't leave the auction until the final act, but instead gave it upfront and then went into the flowery background.
If by "trying too hard," you mean "researched something over the course of several months instead of paraphrasing an AP or Reuters blurb," then yes I agree. And the world needs more of it.
An interesting conundrum would be if now diamonds that are almost flawless became worth more than completely flawless diamonds due to synthetic diamond manufacturers being unable to produce diamonds with actual flaws. These flaws would virtually guarantee that the diamond is natural.
A lot of this article is just about the "magic of diamonds." Rich people seem to get really interested in the science when it comes to their luxury goods. The author goes on talking about how it's as if there is a light shining from inside it... it looks like a lump of quartz.
The diamond synthesis industry keeps getting better. De Beers can't stop them any more.[1] (They tried with Gemesys, now Pure Grown Diamonds. The CEO was a retired US Army general and wasn't intimidated.) There's even a startup in SF now. "Your diamond is hot-forged from pure atoms in our California foundry."[2] De Beers has been frantically trying to keep ahead with machines that can distinguish synthetic from natural diamonds. They claim to be succeeding, but the test equipment required is getting more and more expensive. The diamond industry dug itself into a hole by convincing buyers that the best diamond is a flawless crystal. Making flawless crystals is what the semiconductor materials industry does, and the techniques transfer to diamond making.
Small diamonds are very cheap. Diamond grit for cutting tools is about $100/Kg on Alibaba.
[1] https://www.puregrowndiamonds.com/ [2] https://www.diamondfoundry.com