Nice ice

Yes, diamonds are forever. But even the most expensive, sparkling ad campaign has never been able to put a sheen on one of the guiltiest of our guilty pleasures. The legacy from this most dazzling of earth's creations is a dark one indeed.

Cecil Rhodes, the infamous British imperialist and business magnate who founded the De Beers Mining Co., exploited tribal relationships in order to gain control of the South Africa diamond deposits in the late 19th century; he later became a key figure in the establishment of apartheid South Africa. Battles have been fought over the gemstones; during the 1990s, diamonds fueled the civil war in Angola, and further diamond-related conflicts have raged in Sierra Leone, Liberia and the Democratic Republic of Congo. Most recently, the London human rights organization Global Witness described how the terrorist network al-Qaida infiltrated the diamond trade to raise funds for al-Qaida operatives and to launder significant sums of money. (To the diamond industry's relief, the 9/11 Commission Report played down this claim.) Since the 1970s, India has been cutting and polishing very small diamonds for export, but suspicions have arisen that Indian children have been doing more than their fair share of the work, and for little pay.

The jewelry industry has responded somewhat: Kimberley Process Certification Scheme was established by merchants and governments to make sure they were not using "conflict diamonds" -- what the United Nations identifies as those coming from "areas controlled by forces or factions opposed to legitimate and internationally recognized governments ... used to fund military action in opposition to those governments, or [the United Nations]." The Kimberley Process was implemented in early 2003, and as of April 2004, there were 43 participants, including the European Union. But critics like Global Witness claim that major U.S. and international jewelry retailers may be paying only lip service to the process.

To add insult to all this injury, there's a strong suspicion that diamonds are not quite as precious as they are made out to be. Edward Jay Epstein stoked this skepticism in his book, "The Rise and Fall of Diamonds: The Shattering of a Brilliant Illusion," the definitive diamond industry exposé. Epstein contended that De Beers built a false pricing structure around a product with little inherent value. Several suits against De Beers by the Justice Department later, the company finally pleaded guilty in July 2004 to charges of price fixing, and agreed to pay a $10 million fine, ending a 60-year-long impasse during which De Beers' top brass were reluctant to step foot on American soil for fear of being arrested.

Faced with this information -- just the tip of the iceberg -- how can any blushing bride say "I do" while suspecting that the engagement ring on her finger may have once been part of an agreement between al-Qaida henchmen? How can she obey the current De Beers ads urging her to "raise your right hand" (like Halle Berry and Sarah Jessica Parker) if she knows that the tiny diamonds in her new "right-hand ring" may have been cut by the small, callused fingers of a poor child?

Technology and ingenuity have provided a solution that's lighter on the conscience and the wallet -- and just as easy on the eyes. It's taken 115 years, but lab-made diamonds are being produced that are identical to the million-year-old variety dug from the earth. Plus, they're cheaper, by nearly half. But don't think the diamond industry is ready to embrace this new technology -- and give up all of those profits -- without a serious battle.

It was the September 2003 cover story of Wired magazine that truly heralded "The New Diamond Age." Writer Joshua Davis profiled two start-up firms, Gemesis and Apollo, that had begun manufacturing gem-quality synthetic diamonds. "This sudden arrival of mass-produced gems threatens to alter the public's perception of diamonds -- and to transform the $7 billion industry," Davis wrote.

Synthetic diamonds, of course, are not new: Those pursuing DIY millionaire dreams have been trying to make their own diamonds for centuries -- often getting burned or maimed in the process. As the diamond industry itself points out, synthetic diamonds have been available since the 1950s, when General Electric developed a way to transform graphite into diamond. The De Beers company even has had a hand in this business, as the largest producer of synthetic diamonds for industrial use. Until now, prohibitive manufacturing costs have kept companies from making jewelry-quality gems that can compete with the real thing. But these new diamonds are not only inexpensive to produce, but they're also virtually indistinguishable from natural diamonds -- even in the lab.

Gemesis, based in Sarasota, Fla., is the best known of this new breed of diamond makers, creating showstopping yellow and orange diamonds similar to the colored natural diamonds that have been spotted on bling-sporting celebs like JLo. The lab-made yellow diamonds are a quarter of the cost of natural ones; a Gemesis diamond might cost $4,500 to $5,000 per carat, whereas a comparable natural fancy yellow might cost $15,000 to $20,000 a karat.

The Gemesis process uses high pressure combined with high temperature to mimic the way that diamonds are formed naturally underground. With hydraulics and electricity, the machines focus increasing amounts of pressure and heat onto a "core" of carbon. David Hellier, the president of Gemesis, prefers an analogy to cultured pearls, saying that the machine is "simply a vessel to control or manage the growth process."

The technology, though, cannot produce white diamonds, the most popular and available type of the diamond on the market. Hellier claims that Gemesis has no plans to try to create one, citing pricing as one rationale: "There is more value in the fancy colored diamonds because they simply don't exist at price points similar to white diamonds." Instead, Gemesis is focusing on the colored-diamond market; it's excitedly promoting its introduction next year of a blue diamond, among the most rare.

Boston-based Apollo Diamonds uses a completely different process to create diamonds -- white diamonds, among others -- that could ultimately prove more significant. Apollo diamonds are grown using what the company calls "modified Chemical Vapor Deposition technology." In this complicated, patented process, Apollo fine-tunes temperature, gas composition and pressure to create the perfect combination to produce synthetic diamonds. The result is an extremely pure crystal, which makes it almost impossible for even the most sophisticated equipment to discern the difference between these and natural diamonds.

More important to Apollo: The diamonds are a key element in enabling the company to compete in the semiconductor market. As Davis explained in Wired, semiconductors require diamond wafers. The CVD process allows Apollo to make almost-natural diamond wafers in bigger sizes than previously possible.

Bryant Linares, the president and CEO of Apollo, sums up the company's operations by saying its "cultured diamonds" will be significant in three major markets "beginning with the gemstone market and followed closely by the optics/electronics and nanotechnology markets." Linares confirms that Apollo intends to start selling water-clear diamonds for jewelry in the latter half of next year. Does Apollo have any deals with Harry Winston's or Tiffany's? Linares responded to this question with a written statement: "Apollo Diamond is currently in discussions with several prospective high-end international partners in the gemstone industry, whom we cannot name at this time."

The Wired article caused major ripples in the slick veneer of the diamond industry's confidence. Most of the responses have been subtle yet strong. Martin Rapaport, the chairman of the Rapaport Group, an international network of companies involved in many aspects of the diamond and jewelry trade, addressed the "cultured diamond" situation in this way: "Of primary concern to the entire jewelry industry are the three Ds -- detection, disclosure and documentation. An additional concern for natural diamond producers is that legitimate, fairly disclosed man-made diamonds will compete with natural diamonds. Such competition may shift jewelry demand away from natural diamonds and reduce or restrain natural prices."

The two major industry associations, the Gemological Institute of America and the International Gemological Institute, have seriously undercut the synthetic diamonds' credibility by refusing to grade or evaluate such diamonds with the famous "four C's" standard (carat, color, clarity, cut). The GIA's public stance on the matter is that synthetic diamonds should not be categorized like natural diamonds. As GIA's president, William E. Boyajian, has said, "GIA's policy is, as it always has been, that there is nothing inherently wrong with synthetics, provided they can be identified and are properly disclosed." From such statements, it is clear that the GIA thinks these lab-made gems make lovely jewelry, but they are not and never will be in the class of "real" diamonds.

The Gemological Institute of America also sent state-of-the-art screening instruments to jewelers and groups to help them detect synthetics and diamond simulates. These instruments, DiamondSure and DiamondView, are manufactured by the Diamond Trading Co. -- part of the De Beers group of companies.

In the most drastic move so far, the Israel Diamond Exchange (IDE) banned the trade of synthetic diamonds in April 2004. "There is no doubt that we must take a firm stand against synthetic diamonds," Shmuel Schnitzer, the president of IDE, said in a statement. "These are imitations, and must not be handled by members of the legitimate trade."

But, at this stage, the main industry debate over lab-made diamonds is a semantic one. Hellier, the president of Gemesis, doesn't like to call his company's product "synthetic." The industry, though, takes umbrage at the "cultured diamonds" term used by Gemesis and Apollo. As Jerry Ehrenwald from the IGI says, "When they culture a pearl, they put a seed in the oyster, and the oyster continues to secrete the nacre. It's quite a natural process. With synthetic diamonds, there is nothing natural about stone." (A German court has banned the use of the "cultured diamond" label.)

Gemesis and Apollo also want their gems to be classified by the GIA and IGI. Hellier from Gemesis says, "We think that confusing these man-made diamonds with real diamonds will cheapen or devalue real diamonds. We want them to be distinct products."

It sounds like both groups want the same thing: To keep lab-made diamonds distinct from natural ones. But to the gem-makers, that means classification and recognition. To the natural diamond industry, it means something else entirely.

Carson Glover, a spokesman for the public relations arm of the De Beers' Diamond Trading Co., dismisses claims that the natural diamond industry has anything to worry about. "Synthetics have not eaten into natural diamonds at all. These are two very different products. Diamonds are a gift of love, used to symbolize relationships, celebrate milestones -- anniversaries, the birth of a child, etc. Synthetics are not the real thing. They have amazing capabilities from an industrial standpoint, but they don't have a retail presence yet. Nine out of ten women want the real thing."

But 2004 was the first year that Gemesis' cultured diamonds were even available to the consumer market. Nine out of ten women probably have no idea they even exist. But as Apollo readies its white diamonds for market as well, that all may change quickly.

Most of the jewelers who do stock the lab-made diamonds often wax enthusiastic about their beauty, bright colors and affordability. Very few jewelers bring up social or environmental concerns as justification for stocking the gems. Fred Schrode, the owner of Schrode Jewelers in Florida, concedes that some of his customers "have definite thoughts about conflict-free stones." These customers tend to be younger, he says. However, Schrode doesn't like to get into the moral and social implications of buying a diamond. "I think that when you start mentioning 'conflict-free' to a customer, you open Pandora's box. But if you're asked by a customer about conflict-free stones, you can tell them, 'These are OK; they're grown right here in Sarasota.'"

Others, though, have no problem pitching directly to the socially aware. "My customers appreciate these synthetic stones for the ecological and social values that are embedded in them," says Matthew White, the founder of greenKarat jewelry, which sells only synthetic diamonds. "We're looking toward to a time when, instead of being apologetic about wearing a synthetic stone, those who wear the natural stones will be draped in shame."

Resources

Online jewelry retailers that sell lab-made diamonds:

For a list of retailers that carry Gemesis diamond jewelry: