by Diamond Foundry
(Press Release) In response to Mr. Rapaport’s recent letter:
We applaud Mr. Rapaport for his call to improve the ethics of diamond digging. His plea for the diamond industry to respond to crises of its own making are spot on. However, his vehement anger and lashing out at Diamond Foundry is not fair and errs by insulting an exemplary actor beloved by the American public and a leading advocate of sustainability.
Mr. Rapaport suggests that lab-grown diamonds contribute nothing toward improving the livelihood of artisanal African diamond diggers and their families. This is a disingenuous argument to the extreme. The plight of diamond miners is the responsibility of those who have most profited from them in the mined diamond business. Diamond diggers have been enslaved in mining for 100 years. Shifting the blame and/or cure to others is not appropriate.
Mr. Rapaport claims that mined diamonds have value because of their “store of value”. The “value” system in natural diamond is of course totally untrue. It is even against the SEC rules to suggest the investment quality of natural diamonds because there is no established secondary market. When you walk out of the stone, the “stored value” goes down 75%. The diamond industry can do better than that. It is time to simply admit the truth that diamonds — 99% of them — are simply a luxury product. This is important because millennial buyers have a good b-s detector. They are constantly on the lookout for ulterior motives and they demand transparency. You can call your diamond ethical or an investment but they know it is not. This is no way to sell product in the future.
The storyline around a supposed scarcity of mined diamonds is walking on thin ice as well. People know it is not true. The mining of diamonds represents mass production unlike any other on Earth. Dig twice as fast and you extract twice the diamonds from a mine. There is no scarcity of mined diamonds other than control of pace of extraction by the diamond cartel. Industrial mining operates at a massive scale. Former Tiffany & Co.’s CEO Michael J. Kowalski says that “few industries in the world have a larger environmental and social footprint than mining.” Even the largest lab-growers are boutique operations in comparison to industrial miners.
In many ways, lab-grown gem diamonds are the epitome of human scientific achievement. Lab-grown diamonds are a conscious choice of consumers precisely because they aren’t mined from the Earth. By converting greenhouse gases into diamond crystals indistinguishable from mined diamonds — because a diamond is a diamond — a new, eco-friendly alternative is available. The minute differences that only advanced scientific tools can detect are smaller between mined and lab-grown diamonds than they are between mined diamonds from various countries of origin.
There is no basis of fact to assume that lab grown diamonds will be “down at the level of CZ in price or glass crystals…” anytime soon, if ever. Growing diamond crystals the size of a gem in a laboratory is very hard. There is substantive capital expenditure involved for complex semiconductor type equipment. Semiconductor chips have become very inexpensive but due to the higher and higher circuit integration density attained on silicon wafers. The wafers themselves have not been on technology’s Moore curve. By comparison, mined diamonds are free in the ground. If anything, prices for mined diamonds ought to be down to the level of CZ. Diamond mining is plenty profitable as we know.
Finally, it is the Rapaport report itself which has been a major cause of trouble for the diamond industry. For one, it is surprising that the price collusion it implies has not been declared illegal yet. In any case it has detached pricing from the market.
As a creator of lab-grown gems, we are seeking to set a new standard on ethics, transparency, and social responsibility in the diamond industry. This is a much needed opportunity for the entire diamond industry which has not been doing so well lately. In any well-run business, when things have not been going well for some time, it is about time for innovative ideas and new leaders.
We are pleased by the amount of interest we’ve been receiving from customers around the world. Quite clearly, lab-grown diamonds present a choice that is very attractive. We look forward to making the diamond industry fruitful for the entire distribution channel once again.