Cultured gems challenge long-held diamond myths

Reuters, 08.07.03, 1:01 AM ET

By Lauren Weber

NEW YORK (Reuters) - Colored diamonds are among the rarest gems in the world, commanding thousands of dollars per carat and coveted by high-end jewelry boutiques and serious collectors.

Now two small companies propose to change the orderly hierarchies of the diamond business by manufacturing colored diamonds in laboratories -- simulating a process that normally takes millions of years and challenging the notion that a diamond is a rare and ancient prize.

One of them -- Sarasota, Florida-based Gemesis, has already begun marketing its yellow diamonds through several Internet distributors, such as takaradiamond.com. Next month, the company will roll out its own branded gems, at a price well below the rates normally charged for mined yellow stones.

"These are chemically, physically and optically identical" to mined gems, said Gemesis Chief Executive Carlos Valeiras.

Boston-based Apollo Diamond Inc. creates clear, blue, pink and black diamonds, though they are not yet on the market.

Both companies, which are featured in the September issue of Wired magazine, say their gems will be sold with full disclosure, so that customers understand they are buying manufactured -- not mined -- diamonds.

On New York's 47th Street, home to more than 2,500 diamond shops and factories, dealers dismissed the appeal of synthetic gems.

NO NATURAL APPEAL?

"People want a piece of the earth. They want something natural," said Richard Winick, of Manny Winick & Son.

Howard Herman, a 47th Street retailer specializing in colored gems, held the yellow Gemesis stones up to the light. "They look very nice. But the color is not believable. And they don't feel right in my fingers," he said.

Even so, global diamond giant De Beers Consolidated Mines Ltd. is nervous. The concept of synthetic gem-quality diamonds, possibly manufactured by the millions, threatens the "rarity myth" on which the worldwide diamond industry is founded. The high price of a diamond is dependent on the idea that it is a rare treasure from a limited supply.

De Beers, which controls about 60 percent of the world's diamond supply, launched an initiative several years ago, anticipating developments like the Apollo and Gemesis stones.

"There has been concern" about cultured diamonds, said Andrew Bone, spokesman for De Beers' Diamond Trading Company in London. "To meet that concern, we've developed technology to provide effective detection between cultured and natural diamonds."

De Beers, which is 45 percent owned by No. 2 diversified global miner Anglo American Plc and the rest by South Africa's Oppenheimer family and the Botswana government, distributes the sophisticated machines to leading gemological laboratories around the world.

For Apollo, the true promise of cultured diamonds lies not in necklaces to be worn by stars on Oscar night, but in the world of high technology.

"Diamonds are the ultimate semiconductor material," said Apollo Chief Executive Bryant Linares. Apollo hopes to tap both the gem and semiconductor markets -- thus finding twice the potential in one of the world's most valuable materials.