By Isaac Mimar
The global diamond industry is at a crossroads not seen since its inception. Chemical vapour deposition (CVD) diamonds, which are lab-grown, are being found in finished jewellery and with fraudulently produced reports in increasing frequency and volume. According to the latest intelligence from India, the manufacturing of CVD diamonds is growing exponentially and we have to assume their consumption is increasing in tandem.
When undisclosed white CVD diamonds began appearing in the market in 2012 and making trade headlines around the world, the initial response by many was fear and confusion as to how to ensure they were kept out of the pipeline of legitimate stones. At the very least, a method was needed to identify them in a cost-effective manner, particularly among melee.
CVDs in Canada
Since then, research has yielded quite a bit of valuable knowledge regarding CVDs and how to identify them from their natural counterparts or indeed, what their place is in the industry. For instance, some would argue their lower cost (usually in the neighbourhood of 30 per cent less) disqualifies them as a substitute for naturals. Given their method of creation, natural diamonds are extremely rare, hence they are expensive. The rarer something is, the more it costs. An item that can be replicated infinitely should not have intrinsic value above and beyond its production cost and a fair profit for the manufacturer. The fact the discovery of undisclosed CVDs mixed into parcels elicits outrage (reports of CVDs comprising up to 30 per cent of a parcel are not unheard of) clearly illustrates how they are not the equal of natural diamonds.
If you think the incidence of undisclosed CVDs is a phenomenon occurring only in places like Antwerp, India, or Dubai, think again. The fact is, Canada is not immune to this type of fraudulent activity. Reprinted, recycled, and unused diamond reports issued by Gemological Institute of America (GIA) for stones less than one carat are circulating in Canada. The fact these documents usually do not include plots for inclusions makes it easier for dishonest dealers to match a CVD to a pre-existing lab report according to its measurements.
GIA’s announcement last November saying it would no longer provide reprints of existing reports led some to conclude this decision was in response to this unethical practice. The question remains, how many of these reports are circulating in the market? Some would surmise the number is probably quite high, which makes it all the more important to remain vigilant. These days, the Internet can facilitate consumer exploitation in this regard, as a lack of deeper understanding about issues within the diamond industry can lead the public to attribute excessive confidence in a GIA report. If a diamond has one of these, it must be okay.
Detecting the ‘undetectable’
Few would argue against the severity of this situation regarding undisclosed synthetics. It goes to the very heart of the perception of our industry in the eyes of the consumer. Unlike previous hurdles presented by cubic zirconia and moissanite, a qualified appraiser or jeweller using conventional gemmological equipment was able to easily identify these simulants. The issue today is a CVD diamond is not a simulant—it’s a diamond through and through, exhibiting the same characteristics under a loupe or even a microscope.
To put this to the test, our firm sourced a CVD diamond. Over the span of a year, we studied it, showed it to our retail clients, and submitted it randomly to 10 appraisers/diamond labs, purposely avoiding laboratories where proprietary detection technology is in use. Unfortunately, not a single appraiser picked up on the diamond’s man-made origin. The printed reports we requested all indicated the diamond as natural; no mention was made of the stone being a Type IIa, the usual flag that would spur further advanced testing.
Some would argue our experiment is the equivalent of detonating a hydrogen bomb, as it highlights a severe urgency for greater awareness of the problem and the need to implement steps to ensure stones are flagged for further analysis. If appraisers/labs cannot provide a safety net to the trade, where do we stand in terms of being protected from the coming storm? The need to maintain credibility among consumers cannot be overstated.
Various detection machines exist today to screen for synthetics. Ranging in price from $700 to $30,000 Cdn, they can flag Type IIa diamonds—which account for only two per cent of natural diamonds. When you find one of these, you know you either have something extremely rare in nature or a lab-grown diamond. As such, further testing is required. Technology to screen for synthetics may seem cost-prohibitive for the small independent appraiser; however, given the existence of undisclosed CVDs in the natural diamond pipeline and the possibility of more widespread contamination, some may view the addition of this equipment as a minimum requirement to maintaining credibility as an appraiser or a gemmologist.
Looking at the cup half full, greater awareness about CVD diamonds—along with apprehension regarding ‘virtual jewellers,’ reports that are easily manipulated, and deceptive marketing practices—may add more sparkle to the diamond trade, as consumers look to trusted jewellers and appraisers for their expertise. Our task moving forward is to ensure our knowledge of threats against ethical practices is one step ahead of those who would seek to profit at the expense of the honest businessman.
Isaac Mimar is chief executive officer (CEO) of MDL Diamond Merchants, a diamond house based in Toronto. A second-generation diamantaire, he has an economics and finance degree from the University of Toronto, holds a gemmology degree from Gemological Institute of America (GIA), and currently serves as treasurer of the Ontario chapter of the GIA alumni association. Mimar is also an active member of the Diamond Bourse of Canada (DBC), which is now affiliated with the World Federation of Diamond Bourses (WFDB). He can be contacted via e-mail at email@example.com.