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News, Feature Stories, The Great Diamond Debate

Articles from DIAMONDS BY TYPE - SYNTHETIC / LAB-CREATED (98 Articles)











Fighting for the hearts and minds of diamond desire

Of all the challenges to the diamond industry over the past four decades, today we are presented with the greatest rival to threaten natural diamond desire: synthetic diamonds.

Key points

• The human attraction to and demand for natural diamonds pre-dates marketing and advertising – it is not a manufactured market

• Intrinsic and investment value are complex to quantify in relation to natural fancy colour diamonds and man-made diamonds

• Man-made diamonds do not pose a ‘threat’ to natural diamonds, as they are a separate, cheaper product without a compelling story

We are fighting to reignite the passion for and positive perception of natural diamonds, and their reputation as a store of value.

Watching the evolution of diamond alternatives take a bite from the $US80 billion natural diamond industry since 1980, simulants have found a place as inexpensive substitutes for the real thing.

Now, man-made diamonds raise the discussion to a higher level. Is this a threat to the industry, or just another affordable replacement, like cubic zirconia or Swarovski crystal?

The drama is playing out in the hearts and minds of consumers right now. Factory-made diamonds are promoting their potential benefits – of which 99 per cent is price point – and raising issues that are either obsolete (ethically-sourced diamonds) or unproven (environmental benefits).

The idea that dictators or warlords exploit the natural diamond industry has been reduced to a fiction. Indeed, the number of people who were treated as slaves – or worse – in order to supply diamonds, which were then sold to finance tribal revolutions, was always a small percentage of international production.

However, it certainly – and rightly – tarnished the entire industry when considering what diamonds symbolise.

With greater recognition of this problem, diamond producing countries and mining companies have, through international co-operation, reduced to almost nil the illegal flow of such merchandise.

Almost all mining excavations have embraced advanced ways to monitor new diamonds entering the consumer market. This commitment has greatly curtailed the illicit market and human suffering.

When discussing ethics, we must also consider the millions of people who contribute and make an honest living working with natural diamonds to satisfy our human desire for treasure.

Intrinsic value versus investment value

A major challenge to the future of natural diamonds is the idea that all diamonds are an investment. There is no question that the past 40 years have seen a growing interest in extraordinary stones, and their value has increased exponentially.

Natural fancy colour diamonds are truly one of nature’s greatest gifts and most beautiful objects.

They can be subtle or strong, pale or vivid, large or small, and often it is difficult – if not impossible – to find two that are exactly alike. They have individual personalities, like people. They capture your mind and vision, because we identify with some of their notable characteristics.

They are personal more than any other possession because they are unique.

If the idea of ‘investing’ in diamonds is the consumer’s overriding objective, there are many hurdles for this to manifest:

  1. Firstly, and most importantly, one has to understand what one is looking at and have an understanding of its relationship to references that provide a fair comparison – and that doesn’t mean a (subjective) grading certificate.
  2. Due diligence in comparing cost and colour preference, as most stones vary widely in both cases.
  3. Price fluctuations, which tend to flow in cycles of five to 10 years; for some stones, upward pressure has raised prices 50–100 per cent, and downward cycles have seen those same prices fall by an equivalent amount.
  4. Timing the exit – i.e. liquidating the investment, which is the most challenging aspect. Staying abreast of auction data can provide an indication of this, but there are no guarantees.

Because there are so many factors that drive the economics of the market, it is impossible to make the predictions about timing purchases, and/or the time to sell.

When we take a long-term approach, exceptional natural diamonds (that means beautiful and rare) are not only a good store of value (intrinsic) but offer a logical – if not probable – increase in value (investment).

However, if one cherishes the objects they can afford and keeps them for a lifetime, they receive the ultimate return on their investment. Consumers should build that into their buying decisions.

Natural creation or man-made imitation

The mass production of man-made diamonds over the past 10 years has also increased exponentially. If nothing else, this has caused us to contemplate, at all levels of the industry, if there is any true rationale to our innate desire for a diamond.

"Natural diamonds are more valuable than synthetics, more expensive, more rare, have a greater provenance and story, and maybe even some hidden ‘powers"

Is the whole idea of diamonds just a big marketing scheme or can we justify the symbolism that has become the essence of our diamond desire?

It is not often recognised that the fascination over diamonds existed long before 20th Century advertising and marketing; it dates back to the first diamond ever discovered.

Now that human intellect has deciphered scientific and technical ways to duplicate what took nature billions of years to accomplish, we must look at the ways to differentiate.

At the time I’m writing this article, scientists – while claiming they are identical – can identify the creation process; they can determine which stone is natural and which is man-made.

If the difference between the two can easily be identified, is it correct to claim they are ‘identical’?

It may not be visible to our eyes, but this invisible ‘energy’ is traceable. So, what’s the difference between the hand of God and the hand of man?

The building blocks of natural diamonds began forming underground 3 billion years ago; the universe itself is estimated to be 15 billion years old.

The process of the evolving atomic structure from hydrogen to carbon took 12 billion years. Some of the first and oldest carbon forms are diamonds, because they are the simplest, purest expression of the carbon element.

Besides the virtue of their beauty and phenomenon of their formation, why are we drawn to diamonds?

When you love somebody, you desire to give him or her the greatest treasure – a treasure as great as your love.

The gift of a natural diamond has come to represent what is, in the truest sense, the ultimate material symbol of reverence.

When diamonds were first discovered millennia ago, their unique properties such as hardness and transparency made them the choice of kings as their magic gemstones. As kingdoms were conquered and rulers deposed, their diamonds and gems were often considered a fair trade for their lives and freedom.

This shows the high esteem in which diamonds were held before the word ‘investment’ was invented. This perception has been a constant throughout history, as diamond folklore explains to us.

A sentimental journey

When diamonds became more available to the masses through new discoveries and advances in mining, the use of diamonds as adornment and a symbol of sentimentality was still the main motivation for their purchase.

As we entered the modern age of marketing, say, 75 years ago, the slogan “A diamond is forever” was the segue to embed the concept of enduring love into every brain. This idea became the catchphrase to ignite diamond engagement rings as practically a necessity for marriage.

Today, the latest challenger to the natural thing is the unnatural, man-made, factory clone. It is supposed to be the exact same product as a natural diamond because it is made of the same substance (carbon) in duplicated growing conditions (heat and pressure).

"When I look at the variety of expressions of natural colour diamonds, it appears to be infinite, like the trillions of stars in the sky. We are made of the same stardust."

This reminds me of Steven Spielberg’s film A.I. The premise of this futuristic story is of a boy who was created, by artificial intelligence, to be an identical copy of a human child who had sadly passed away.

Unfortunately, as perfect a copy as he was, the parents could not love him because he was missing one thing: a ‘spirit’, the essence of life.

Ultimately, I feel there is no threat from man-made diamonds to either natural fancy colour or colourless diamonds. They simply provide another price choice for the consumers, another story to tell, another name to call your jewel.

Yet this is how I view the difference between a man-made and natural diamond: while it is likely that I could not tell the difference with just my eyes, there is an intrinsic connection that humans feel to nature. Everything natural, from diamonds in the ground to stars in the sky, is connected to us.

Natural diamonds are more valuable, more expensive, more rare, have a greater provenance and story, and maybe even some hidden ‘powers’.

When I look at the variety of expressions of natural colour diamonds, it appears to be infinite, like the trillions of stars in the sky. We are made of the same stardust.

 

'The Great Diamond Debate' Contents » 

The natural diamond industry is facing disruption in every aspect
Sergey Ivanov, CEO of Alrosa
Don’t blame synthetic diamonds for the natural industry’s woes
Garry Holloway, founder of Melbourne’s Holloway Diamonds
Both sides of the diamond debate should verify their claims
Danielle Max, editor in chief IDEX Online

 

 

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ABOUT THE AUTHOR
Alan Bronstein

Alan Bronstein is president of the Natural Color Diamond Association. He is a respected industry advisor and speaker.

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Tuesday, 18 February, 2020 08:21am
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