Why De Beers makes beautiful diamonds it will never sell – Chicago Tribune

Scientists at De Beers can make near-flawless diamonds in a lab, but they will never sell you one.

The 127-year-old mining company’s Element Six unit, named for the carbon atom’s rank on the periodic table, makes gems that are as perfect as any found at Tiffany & Co. stores, yet their destination is a 1980s office complex on the edge of London. There, a team of 62 studies their creations and develops machines for diamond buyers trying to spot synthetic stones being peddled as the real thing.

While still a small part of the market, man-made diamonds are now being mass produced, and retailers like Wal-Mart Stores sell them to customers seeking cheaper alternatives. But because the gems are almost indistinguishable from those naturally formed, some sellers have tried to pass off synthetic types as ones that have been mined. Parcels in Indian cutting centers were found to contain a mixture of man-made and mined gems. For De Beers, formerly a near-monopoly distributor that both ruled and nurtured the market, cheaters pose a risk to consumer confidence in an $80 billion global industry.

“We’re very focused on detection,” said Simon Lawson, head of Technologies U.K. at De Beers. “It underpins the integrity of natural diamonds and ensures that consumers cannot be duped into buying a synthetic diamond.”

The illegal art of mixing man-made with mined gems, known as peppering, is a threat to producers’ efforts to defend and promote the image of natural diamonds that command a premium to man-made. While De Beers makes its own synthetic stones, 99 percent of those are used for industrial purposes such as oil- rig drills, with the gem-quality types destined only to help the company identify those made in other labs.

Retailers sell man-made gems at discounts of 30 percent to 40 percent. Technicians create them using a carbon seed in a microwave chamber with methane or another carbon-containing gas and then superheated into a glowing plasma ball. That creates particles that crystallize into diamonds in as many as 10 weeks.

While synthetics make up just a fraction of the market, they have growing appeal to younger buyers. That’s another headache for mine owners, who are under pressure to cut supply and lower prices, because traders, cutters and polishers are struggling to profit amid a credit squeeze and languishing jewelry sales. An index of polished prices reached a five-year low last month.

De Beers, founded on South Africa’s giant Kimberley mine and built up under Cecil Rhodes, now uses the scientists and technology to help prevent deception. At its Maidenhead offices in the U.K., near the former home of billionaire diamond magnate Harry Oppenheimer, the aim is to create new gems that can fool the detection machines so that the company will have a sense of what it will be up against from competing synthetics in the next few years, Lawson said.

The researchers have developed three types of machines that sell for as much as $55,000 each, usually purchased by trading bourses around the world. One device takes about 4 seconds to scan a stone’s atomic makeup for impurities. The 2 percent of diamonds that fail the test are then bathed in ultraviolet light and viewed in another machine. Inconsistencies in the phosphorescence and fluorescence glow can tell the operator the gems may be man-made.

“When you polish a gemstone, there is a memory of how it grew,” said Philip Martineau, head of physics at the De Beers Research Centre. “They’re not mimicking nature. It’s the differences that give us the clues.”

De Beers isn’t the only maker of detection machines. The Gemological Institute of America, which sells its own devices, said last month that it also plans to start making synthetic diamonds to help it spot them.

The great diamond centers have been duped before. In 2012, 600 undisclosed synthetic gems sized between 0.3 and 0.7 carat were found in Antwerp and Mumbai, and more were discovered in 2013 and this year, according to the International Gemological Institute. A parcel containing 110 man-made diamonds was intercepted in India as recently as February, according to the Surat Diamond Association.

The effort companies such as De Beers and the GIA are making to clamp down on deception benefits retailers, said Daniel Rosen, the owner of 4Cs Diamonds, a jewelery seller in London’s Hatton Garden diamond district.

“It’s an industry that’s built on trust,” he said. “If you break that trust you are out. You only have to do it once.”

While there’s little data on the amount of undisclosed synthetics, organizations including the GIA said more are being detected. India’s Gem Jewellery Export Promotion Council has threatened legal action against those caught peppering. The Surat Diamond Association, based in the Indian city that’s the world’s biggest gem-cutting center, terminated a diamond manufacturer’s membership in August after it was accused of presenting synthetics as naturally formed, according to a Times of India report.

Findings like those “were a wake up call for the trade,” Martineau said. “It brought the work we’d been doing into focus.”

About 360,000 carats of man-made gems were produced last year, compared with 126 million carats of natural diamonds. Synthetic production, fueled by increased demand from retailers for cheaper alternatives, probably will jump to 2 million carats in 2018 and 20 million carats by 2026, according to researcher Frost & Sullivan.

Despite the increased competition, De Beers has no intention of selling synthetics.

“De Beers’ focus is on natural diamonds,” Lawson said. “We would not do anything that would cannibalize that industry.”