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Why Buyers Shunned the World's Largest Diamond

194 points by Thevet 10y ago

Animats 10y ago
The diamond industry depends on the illusion of scarcity. The real scare for them is that this guy has a diamond mine with a plant equipped to detect large diamonds by X-ray transmission and automatically kick them out of the rock stream before they hit the rock crusher. Five months after he installed that, he got this huge diamond. What are the odds another one will show up in the output bin in the next year or two? The diamond synthesis industry keeps getting better. De Beers can't stop them any more.[1] (They tried with Gemesys, now Pure Grown Diamonds. The CEO was a retired US Army general and wasn't intimidated.) There's even a startup in SF now. "Your diamond is hot-forged from pure atoms in our California foundry."[2] De Beers has been frantically trying to keep ahead with machines that can distinguish synthetic from natural diamonds. They claim to be succeeding, but the test equipment required is getting more and more expensive. The diamond industry dug itself into a hole by convincing buyers that the best diamond is a flawless crystal. Making flawless crystals is what the semiconductor materials industry does, and the techniques transfer to diamond making. Small diamonds are very cheap. Diamond grit for cutting tools is about $100/Kg on Alibaba. [1] https://www.puregrowndiamonds.com/ https://www.puregrowndiamonds.com/ [2] https://www.diamondfoundry.com https://www.diamondfoundry.com
- Luc 10y ago
  I read an article in the financial newspaper today about fake diamonds arriving in Antwerp from India mixed in with real ones in 'diamond melee' packages (lots of small diamonds). (in Dutch): http://www.tijd.be/ondernemen/retail/Nepdiamanten_sijpelen_ons_land_binnen.9797771-3073.art http://www.tijd.be/ondernemen/retail/Nepdiamanten_sijpelen_o... I got terribly annoyed reading this article as it constantly conflates 'fake' and 'synthetic', as if they're synonyms. The 'fake' diamonds are actual diamonds, though not natural ones. Clearly a journalist who's echoing the industry propaganda. Apparently there's an estimated 10,000 diamond making machines churning them out in China. Good!
  - hawkice 10y ago
    Or rather, the synthetic ones are only 'fake' insofar as they are passed off as natural (perhaps to gain a higher price). Put a different label on the box (for instance, the label 'Diamonds'), and they're 'real' again.
    - Animats 10y ago
      DeBeers managed to convince the US Federal Trade Commission to require synthetic diamond manufacturers to label their products as synthetic. But China doesn't require that. China trade practice barely distinguishes between diamonds and cubic zirconia. If you want to order diamonds from China, you have to specify HPHT (high-pressure high temperature), or CVT (carbon vapor deposition) or you'll probably get cubic zirconia.[1] Nobody can detect better HPHT or CVT diamonds without lab equipment, anyway. Even under a microscope they look very similar. If you hit them with UV light and take a picture milliseconds after the light goes off, the fluorescence patterns are different. There's overpriced test equipment based on this fact. (Now there's a potential phone accessory - a UV flash that plugs into the phone for diamond grading, with associated app. Tiny market, though.) [1] https://www.alibaba.com/product-detail/High-quality-white-hpht-diamond-for_60202367753.html https://www.alibaba.com/product-detail/High-quality-white-hp...
  - jpmattia 10y ago
    > fake diamonds What a funny concept. Is the index of refraction different from diamond? Is the placement of the carbon atoms not on a diamond lattice? Or is the lattice constant somehow smaller or larger?
    - Aelinsaar 10y ago
      The value of a diamond is in its ability to display the wealth of the wearer. If a diamond no longer indicates status, it is "fake". That's the truth they're all beating around the bush of. It's pathetic, but there it is.
      - tempestn 10y ago
- Blackthorn 10y ago
  Another great benefit of lab-created diamonds: you can get them with the impurities you want. Want a red or a blue diamond without the silly price tag? You've got it! I bought my wife a blue diamond engagement ring in 2010 (blue diamonds have boron in them). The price was pretty good then. I can only imagine that since they've gotten bigger, cheaper, and purer since. Same process has been done to other gems. I've bought emerald jewelry in the past; all lab-created of course.
  - Animats 10y ago
    For other gem materials, the synthetics are so good and cheap it's embarrassing that expensive jewelry is made from them. You can buy cheap sapphire bar stock[1] or ruby rod[2] on Alibaba. Synthetic emerald gems come in bulk in plastic bags.[3] [1] https://www.alibaba.com/product-detail/Custom-square-sapphire-rod_60383240240.html https://www.alibaba.com/product-detail/Custom-square-sapphir... [2] https://www.alibaba.com/product-detail/Ruby-crystal-Rod_60333055506.html https://www.alibaba.com/product-detail/Ruby-crystal-Rod_6033... [3] https://www.alibaba.com/product-detail/Synethic-Emerald-Oval-Cut-Green-Spinel_60353304175.html https://www.alibaba.com/product-detail/Synethic-Emerald-Oval...
    - zem 10y ago
      wow. i can actually assemble a set of real gemstones to play splendor [https://boardgamegeek.com/boardgame/148228/splendor https://boardgamegeek.com/boardgame/148228/splendor] with.
      - thaumasiotes 10y ago
        You can, but gemstones will nick each other if you leave them loose in the box. :(
    - clock_tower 10y ago
      If I ever get a time machine, I know what I'm taking back to fund my travels...
    - Blackthorn 10y ago
- ljk 10y ago
  https://www.youtube.com/watch?v=N5kWu1ifBGU https://www.youtube.com/watch?v=N5kWu1ifBGU
- Aelinsaar 10y ago
  "You will never lose betting on human stupidity." Natural diamond gemstones are valuable, mostly, because of human stupidity. Chances are, that will continue for the simple reason that it's persisted for so long already.
- sandworm101 10y ago
  Not fake, "artisanal". A shop in my area is buying radio ads for their line of "Artisan Created Diamonds".
  - gozur88 10y ago
    https://www.youtube.com/watch?v=TBb9O-aW4zI https://www.youtube.com/watch?v=TBb9O-aW4zI
    - sandworm101 10y ago
      That firewood isn't far off the mark. There really is a market for premium firewood. I remember seeing two types on sale at a local gas station: Normal firewood bundled with a few turns of plastic wrap, and "guaranteed spider free" firewood sealed inside bags for double the price. Fyi, don't trust bought firewood. Most of it isn't properly dry and can clog up stoves. Buy and stack it yourself for a season.
      - Evolved 10y ago
        Fyi, don't trust bought firewood. Most of it isn't properly dry and can clog up stoves. Buy and stack it yourself for a season. Or chop it yourself for the physical benefits.
  - markdown 10y ago
    But are they GMO free?
- walrus01 10y ago
  > (They tried with Gemesys, now Pure Grown Diamonds. The CEO was a retired US Army general and wasn't intimidated.) There's even a startup in SF now. "Your diamond is hot-forged from pure atoms in our California foundry." This is why they've switched their marketing efforts towards the emotional. It's always been that way with the "A Diamond is Forever...", but now even more so with the emphasis on NATURAL diamonds. Lots of DeBeers and diamond cartel marketing stuff that slyly insinuates you don't value your relationship if you don't buy a REAL GENUINE diamond.
  - gozur88 10y ago
    The value of a diamond in an engagement ring doesn't have anything to do with how it looks. What has always mattered is what you spent, so as long as they can create reasonably fixed pricing tiers people will spend large amounts of money on diamonds. It would make a lot more sense for a suitor to give his sweetheart a wad of cash and say "I love you this much", but that's a little too transparent.
    - richardw 10y ago
      In our culture, maybe. https://en.m.wikipedia.org/wiki/Lobolo https://en.m.wikipedia.org/wiki/Lobolo
    - deleted 10y ago
      [deleted]
    - praptak 10y ago
      I'd say burn the cash.The beauty of the diamond scam is that the resale value of diamonds is practically zero. Just as the peacock tail is costly to have and has zero practical value other than showing that its owner can bear the cost.
    - cortesoft 10y ago
      It is not just about spending the money; the diamond (and jewelry in general) is a signaling mechanism. It is supposed to communicate to OTHER people 'my spouse is successful and loves me this much'. A wad of cash does not do this, unless you literally carried it around on your hand.
- themartorana 10y ago
  Diamond Foundry ain't that much cheaper than the real McCoy. I thought synthetic diamonds were gonna save me a bucket of money?
  - aab0 10y ago
    I would guess that the natural diamonds' prices have fallen as the synthetics increasingly set a price floor. They have such large stockpiles of diamonds and they have to bring in revenue, they can't simply pretend the synthetics don't exist on the market and price accordingly. Or to put it another way: for such perfect substitutes and commodities, the prices should be near-identical, and so it is wrong to try to imply that consumers haven't saved a ton of money because the prices are similar; you need a time-series of prices.
- imh 10y ago
  Is it impossible for a new player to discover a mine and start selling them for cheaper? Why doesn't this happen if they are so overpriced? They don't all go through the same company, so I would expect someone to try to undercut their competitors.
  - Hondor 10y ago
    The idea of the cartel is that nobody would want to sell their diamonds cheaper when they can sell them for more through deBeers. They don't want to get into a price war with each other since then every player will lose.
    - imh 10y ago
      Doesn't everyone in every industry lose if they go into a price war? But they do it anyways. I'm not trying to be argumentative, I just sincerely don't understand what makes diamonds different from other products.
      - fosk 10y ago
        Small number of players, and high barriers to entry the diamond market that prevents that number from growing and disrupt the cartel.
  - ridgeguy 10y ago
    What Hondor said, and it's extremely capital-intensive to develop a mine to production. Even after all the geoexploration to find a deposit, it's on the order of $1B - $2B to get into production. You have to move and inspect hundreds of tons of rock to find a carat of diamond in most mines [1]. Mined diamonds can't ever compete with CVD diamond synthesis costs. As more CVD producers come online, I think we'll see prices for synthetics drop drastically. There's a lot of margin available for market-grabbing. [1] http://www.bloomberg.com/news/articles/2016-07-05/first-find-the-world-s-biggest-diamonds-then-don-t-break-them http://www.bloomberg.com/news/articles/2016-07-05/first-find... edited for typos
    - 10y ago
- ridgeguy 10y ago
  And DeBeers is suing IIa Technologies, which is arguably the current largest (by revenue) maker of synthetic gem diamonds. I think the dinosaur's brain has finally perceived the mammals chewing on its tail. DeBeers won't prevail. The diamond market is about to change completely. The biggest challenges companies like Diamond Foundry and IIa Technologies face is building up their own sales channels. DeBeers is still fairly successful in excluding newcomers from the bourses, or diamond exchanges. But channel building is simply a matter of time and $. Chemical vapor deposition is cheap, and there are many participants. There's Diamond Foundry, IIa Technologies, Scio Diamond Technology, Pure Grown Diamonds, and a ton of small startups in the PRC. If you want a diamond doorknob, you'll probably be able to buy one for $1K in ten years. Five years if you're good friends with somebody in Shenzhen.
- yegle 10y ago
  Out of curiosity is there a place to buy a large synthesized Diamond to be used as paperweight? I though that would be cool and since I don't need it to be cut the price should be pretty reasonable.
  - Animats 10y ago
    Large cubic zirconia jewels are available.[1] This one is 45mm across. Another supplier offers up to 200mm diameter, but that may be a special order item. [1] www.alibaba.com/product-detail/Special-cut-for-synthetic-cubic-zirconia_60074196763.html [2] http://www.frgems.com/large-cubic-zirconia-and-synthetic-lab-gemstones http://www.frgems.com/large-cubic-zirconia-and-synthetic-lab...
  - tkhoven 10y ago
    It really depends on how loose your classification of "diamond" is and how large you want. Cubic zirconia is quite popular with hobbyist and some professional faceters and is quite readily available in a range of colours (try searching for cubic zirconia rough) but it's more difficult to manufacture the larger you get. Moissanite is much closer to natural diamond in both hardness and refractive index but it still seems to be fairly inexpensive uncut. Not too familiar with other diamond synthetics but the range seems to be growing.
  - miahi 10y ago
    Synthetic diamonds are not that cheap (about 50% of the price of the natural ones), because they are not that easy to make. The large synthetic diamonds are grown in HPHT medium (>2600 degrees C), and even if they are made by a machine, they still grow at an incredibly slow rate (maybe one micron/hour), so you have to keep a huge temperature and pressure for months to get a big one - and maybe at the end it shatters and you just get 3 carat diamonds from it. So the costs are not really paperweight-ready (or maybe you have a few millions to spare for a paperweight). The biggest synthetic diamond data I could find is 60-carat[1] unpolished (10 carat polished). Diamonds are also not really good as a paperweight (one carat is 0.2 grams, a sheet of A4 paper is heavier than a 25-carat diamond). [1] http://www.diamonds.net/Magazine/Article.aspx?ArticleID=53742&RDRIssueID=143 http://www.diamonds.net/Magazine/Article.aspx?ArticleID=5374...
- nibs 10y ago
  We all still call it Champagne even though rarely does anyone drink sparkling wine from the Champagne region. I suspect diamonds will be the same: most people will consume the "synthetic" ones, which could by almost any physical characteristic be superior, and a small group of people will only buy "natural" on principal.
  - chillydawg 10y ago
    Dunno about you, but where I am (London) we certainly do not call sparkling wine not from Champagne, Champagne.
  - Evolved 10y ago
    In order to be called Champagne it has to come from the Champagne region of France much like Scotch has to come from certain areas of Scotland and how Bourbon has its own set of requirements (seemingly only applying to Canada and the United States). My suggestion: buy your wife or girlfriend something more valuable than jewelry such as self-defense classes or maybe driving lessons on a track. Despite the short duration of the lessons, it'll still be worth more than a diamond ring in terms of pragmatic value.
    - kirykl 10y ago
      A great suggestion, to spend money on something actually valuable. But I'm pretty sure buying your wife/GF driving lessons as a gift is ill advised :)
- deleted 10y ago
  [deleted]
- DanBC 10y ago
  > Diamond grit for cutting tools is about $100/Kg on Alibaba. Here's a fun video about "mining" recent road works for industrial diamonds. https://www.youtube.com/watch?v=pEONMLsSeds https://www.youtube.com/watch?v=pEONMLsSeds
danieltillett 10y ago
I would love to see this diamond in person, but I can't see it being a good investment given the technological change coming, both in sorting for diamonds up to 5000 carats and the real risk someone will figure out how to grow diamonds this big.
- adt2bt 10y ago
  I agree. It seems that Lamb advertising that he's installing equipment to look for ~3-5kcarat diamonds is signaling 'just wait, this 1100 carat diamond is gonna be yesterday's news soon.' The expectation that supply will grow ought to drop the price of this super large stone for anyone willing to wait a few years for the next massive one. However, I do think there will always be a market for large diamonds extracted from cold hard Earth. Yes, synthetics will likely eventually surpass these stones. Owning one of the largest natural stones ever found will probably always seem sexier in many (read: likely non-high-tech) circles of ridiculous wealth.
  - jonah 10y ago
    Add enough qualifiers and anything can become the most whatever.
- jonah 10y ago
  What was most interesting to me is that giant diamonds like this regularly get crushed to bits by the extraction process. I wonder how many other 1000+ karat stones have been destroyed in the history of diamond mining.
  - gwern 10y ago
    Not that hard to estimate. Lucara mines ~90k carats per quarter (http://www.lucaradiamond.com/i/pdf/CP-Q12016.pdf http://www.lucaradiamond.com/i/pdf/CP-Q12016.pdf), or 360k carats per year. They recovered the OP stone in question after 5 months, and it was not that unprecedented as a sale by them of the Constellation 813-carat stone is also mentioned. So 1 every 6 months or 2 per year is entirely possible at this point. But we'll go with 1 1k stone per year, or 1 per every 360k carats mined. Global diamond output is somewhere on the order of 137 million carats per year (http://www.mining.com/web/despite-de-beers-and-rios-efforts-global-diamond-output-to-jump-1-3-this-year/ http://www.mining.com/web/despite-de-beers-and-rios-efforts-...). If all mining has a similar rate but they are crushing the big ones, then that suggests that 137000 / 360 = 380 stones are being destroyed each year currently. Production has risen steeply over history (http://www.gia.edu/cs/Satellite?blobcol=gfile&blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadername2=MDT-Type&blobheadername3=Content-Type&blobheadervalue1=attachment%3B+filename%3DGlobal-Rough-Diamond-Production-Since-1870&blobheadervalue2=abinary%3B+charset%3DUTF-8&blobheadervalue3=application%2Funknown&blobkey=id&blobtable=GIA_DocumentFile&blobwhere=1355958157734&ssbinary=true http://www.gia.edu/cs/Satellite?blobcol=gfile&blobheader=app...) but "The total global production from antiquity to 2005 is estimated to be 4.5 billion carats". So for an all-time estimate, 11*360 + 4500000 / 360 = 16460. This seems improbably high: surely at least some of those 16k giant stones would've survived? So maybe Lucera's current mine got lucky, or it's unique in providing lots of giant stones. ("It has an enviable share of the world’s heavyweight diamonds. Of the 52 biggest diamonds discovered in the past three centuries, 10 have come from Lucara in the past three years. With modifications under way at the mill, Lucara will soon be able to recover diamonds up to 3,000 carats, and next year, up to 5,000 carats—as big as a softball.") Still, I would personally stay the hell away from giant diamonds as any kind of investment or prestige trophy.
JoelBennett 10y ago
So if synthetic diamonds are coming down in price, what other uses are there for them? They seem to be quite good at conducting heat. Could we use them in other areas where we are currently using other less expensive but less efficient alternatives? Diamond thermal paste is already a thing, right?
- corndoge 10y ago
  Yes, if you want to grind a hole right through your die.
- deleted 10y ago
  [deleted]
- sliverstorm 10y ago
  There's sapphire watch faces for hardness, and sapphire substrate for semiconductors (https://en.wikipedia.org/wiki/Silicon_on_sapphire https://en.wikipedia.org/wiki/Silicon_on_sapphire)
  - TheOtherHobbes 10y ago
    I'm expecting genuine diamond iPhone and Watch "glass" within a few years.
    - SkyMarshal 10y ago
      That would actually be amazing, imagine the PR power Apple could put behind "perfectly manufactured, conflict-free diamond screens", "better and more flawless than any natural diamond, only the absolute best for our customers". They could even create the equivalent of a "perfect pixel" guarantee - "perfect lattice" guarantee, the diamond screen is flawless down to the atom or your money back. That could flip the script on DeBeers in a big way.
      - toufka 10y ago
        Well, Apple tried for the iPhone, and I do believe the watch actually does have a synthetic sapphire screen.. Apple purchased a major stake in a sapphire-making business [1]. But it seems that it still was a bit on the tricky side compared with the recent upgrades in glass technology. [1] https://www.technologyreview.com/s/532636/why-apple-failed-to-make-sapphire-iphones/ https://www.technologyreview.com/s/532636/why-apple-failed-t...
ars 10y ago
This could really use a summary version for people who don't need to know what he had for breakfast. I.e. a version that focuses just on the diamond trade, and skips the "color". In really short: The seller tried to bypass the traditional people who buy and see these diamonds, and they were not happy. Typical unethical behavior of people trying to protect a dying income stream.
- gaius 10y ago
  Its part of the narrative. Everyone else is a snob but this guy is down-to-earth that he cares about what breakfast costs still.
Fej 10y ago
It is a wonderful, particular type of schadenfreude to watch old, corrupt monopolies collapse.
pselbert 10y ago
It is difficult to feel for a cartel that was so powerful as to establish the country of Rhodesia[1]. The exorbanant value of diamonds have hurt people for a long time, well before the modern notion of "blood diamonds." 1: https://en.m.wikipedia.org/wiki/Cecil_Rhodes https://en.m.wikipedia.org/wiki/Cecil_Rhodes
cloudjacker 10y ago
If you look at Sotheby auction stats, most things don't meet the reserve bid.
adriand 10y ago
This is a beautifully written piece. Lucid, absorbing, compelling, with a great sense of pace and timing. Brilliant piece of work.
- notyourwork 10y ago
  It read as if the author was trying too hard.
  - sirclueless 10y ago
    If by "trying too hard," you mean "researched something over the course of several months instead of paraphrasing an AP or Reuters blurb," then yes I agree. And the world needs more of it.
- Pxtl 10y ago
  Normally find this kind of long-form article terribly tedious, but I was engrossed. I like that he didn't leave the auction until the final act, but instead gave it upfront and then went into the flowery background.
nathanvanfleet 10y ago
A lot of this article is just about the "magic of diamonds." Rich people seem to get really interested in the science when it comes to their luxury goods. The author goes on talking about how it's as if there is a light shining from inside it... it looks like a lump of quartz.
alfanick 10y ago
Just aside question: does anyone know any rss feed of Vanity Fair/Hive? Googled, found article about RSS on VF, but no actual feed.
Evolved 10y ago
An interesting conundrum would be if now diamonds that are almost flawless became worth more than completely flawless diamonds due to synthetic diamond manufacturers being unable to produce diamonds with actual flaws. These flaws would virtually guarantee that the diamond is natural.

194 points by Thevet 10y ago

The diamond industry depends on the illusion of scarcity. The real scare for them is that this guy has a diamond mine with a plant equipped to detect large diamonds by X-ray transmission and automatically kick them out of the rock stream before they hit the rock crusher. Five months after he installed that, he got this huge diamond. What are the odds another one will show up in the output bin in the next year or two? The diamond synthesis industry keeps getting better. De Beers can't stop them any more.[1] (They tried with Gemesys, now Pure Grown Diamonds. The CEO was a retired US Army general and wasn't intimidated.) There's even a startup in SF now. "Your diamond is hot-forged from pure atoms in our California foundry."[2] De Beers has been frantically trying to keep ahead with machines that can distinguish synthetic from natural diamonds. They claim to be succeeding, but the test equipment required is getting more and more expensive. The diamond industry dug itself into a hole by convincing buyers that the best diamond is a flawless crystal. Making flawless crystals is what the semiconductor materials industry does, and the techniques transfer to diamond making. Small diamonds are very cheap. Diamond grit for cutting tools is about $100/Kg on Alibaba. [1] https://www.puregrowndiamonds.com/ https://www.puregrowndiamonds.com/ [2] https://www.diamondfoundry.com https://www.diamondfoundry.com

Luc 10y ago
I read an article in the financial newspaper today about fake diamonds arriving in Antwerp from India mixed in with real ones in 'diamond melee' packages (lots of small diamonds). (in Dutch): http://www.tijd.be/ondernemen/retail/Nepdiamanten_sijpelen_ons_land_binnen.9797771-3073.art http://www.tijd.be/ondernemen/retail/Nepdiamanten_sijpelen_o... I got terribly annoyed reading this article as it constantly conflates 'fake' and 'synthetic', as if they're synonyms. The 'fake' diamonds are actual diamonds, though not natural ones. Clearly a journalist who's echoing the industry propaganda. Apparently there's an estimated 10,000 diamond making machines churning them out in China. Good!
- hawkice 10y ago
  Or rather, the synthetic ones are only 'fake' insofar as they are passed off as natural (perhaps to gain a higher price). Put a different label on the box (for instance, the label 'Diamonds'), and they're 'real' again.
  - Animats 10y ago
    DeBeers managed to convince the US Federal Trade Commission to require synthetic diamond manufacturers to label their products as synthetic. But China doesn't require that. China trade practice barely distinguishes between diamonds and cubic zirconia. If you want to order diamonds from China, you have to specify HPHT (high-pressure high temperature), or CVT (carbon vapor deposition) or you'll probably get cubic zirconia.[1] Nobody can detect better HPHT or CVT diamonds without lab equipment, anyway. Even under a microscope they look very similar. If you hit them with UV light and take a picture milliseconds after the light goes off, the fluorescence patterns are different. There's overpriced test equipment based on this fact. (Now there's a potential phone accessory - a UV flash that plugs into the phone for diamond grading, with associated app. Tiny market, though.) [1] https://www.alibaba.com/product-detail/High-quality-white-hpht-diamond-for_60202367753.html https://www.alibaba.com/product-detail/High-quality-white-hp...
- jpmattia 10y ago
  > fake diamonds What a funny concept. Is the index of refraction different from diamond? Is the placement of the carbon atoms not on a diamond lattice? Or is the lattice constant somehow smaller or larger?
  - Aelinsaar 10y ago
    The value of a diamond is in its ability to display the wealth of the wearer. If a diamond no longer indicates status, it is "fake". That's the truth they're all beating around the bush of. It's pathetic, but there it is.
    - tempestn 10y ago
Blackthorn 10y ago
Another great benefit of lab-created diamonds: you can get them with the impurities you want. Want a red or a blue diamond without the silly price tag? You've got it! I bought my wife a blue diamond engagement ring in 2010 (blue diamonds have boron in them). The price was pretty good then. I can only imagine that since they've gotten bigger, cheaper, and purer since. Same process has been done to other gems. I've bought emerald jewelry in the past; all lab-created of course.
- Animats 10y ago
  For other gem materials, the synthetics are so good and cheap it's embarrassing that expensive jewelry is made from them. You can buy cheap sapphire bar stock[1] or ruby rod[2] on Alibaba. Synthetic emerald gems come in bulk in plastic bags.[3] [1] https://www.alibaba.com/product-detail/Custom-square-sapphire-rod_60383240240.html https://www.alibaba.com/product-detail/Custom-square-sapphir... [2] https://www.alibaba.com/product-detail/Ruby-crystal-Rod_60333055506.html https://www.alibaba.com/product-detail/Ruby-crystal-Rod_6033... [3] https://www.alibaba.com/product-detail/Synethic-Emerald-Oval-Cut-Green-Spinel_60353304175.html https://www.alibaba.com/product-detail/Synethic-Emerald-Oval...
  - zem 10y ago
    wow. i can actually assemble a set of real gemstones to play splendor [https://boardgamegeek.com/boardgame/148228/splendor https://boardgamegeek.com/boardgame/148228/splendor] with.
    - thaumasiotes 10y ago
      You can, but gemstones will nick each other if you leave them loose in the box. :(
  - clock_tower 10y ago
    If I ever get a time machine, I know what I'm taking back to fund my travels...
  - Blackthorn 10y ago
ljk 10y ago
https://www.youtube.com/watch?v=N5kWu1ifBGU https://www.youtube.com/watch?v=N5kWu1ifBGU
Aelinsaar 10y ago
"You will never lose betting on human stupidity." Natural diamond gemstones are valuable, mostly, because of human stupidity. Chances are, that will continue for the simple reason that it's persisted for so long already.
sandworm101 10y ago
Not fake, "artisanal". A shop in my area is buying radio ads for their line of "Artisan Created Diamonds".
- gozur88 10y ago
  https://www.youtube.com/watch?v=TBb9O-aW4zI https://www.youtube.com/watch?v=TBb9O-aW4zI
  - sandworm101 10y ago
    That firewood isn't far off the mark. There really is a market for premium firewood. I remember seeing two types on sale at a local gas station: Normal firewood bundled with a few turns of plastic wrap, and "guaranteed spider free" firewood sealed inside bags for double the price. Fyi, don't trust bought firewood. Most of it isn't properly dry and can clog up stoves. Buy and stack it yourself for a season.
    - Evolved 10y ago
      Fyi, don't trust bought firewood. Most of it isn't properly dry and can clog up stoves. Buy and stack it yourself for a season. Or chop it yourself for the physical benefits.
- markdown 10y ago
  But are they GMO free?
walrus01 10y ago
> (They tried with Gemesys, now Pure Grown Diamonds. The CEO was a retired US Army general and wasn't intimidated.) There's even a startup in SF now. "Your diamond is hot-forged from pure atoms in our California foundry." This is why they've switched their marketing efforts towards the emotional. It's always been that way with the "A Diamond is Forever...", but now even more so with the emphasis on NATURAL diamonds. Lots of DeBeers and diamond cartel marketing stuff that slyly insinuates you don't value your relationship if you don't buy a REAL GENUINE diamond.
- gozur88 10y ago
  The value of a diamond in an engagement ring doesn't have anything to do with how it looks. What has always mattered is what you spent, so as long as they can create reasonably fixed pricing tiers people will spend large amounts of money on diamonds. It would make a lot more sense for a suitor to give his sweetheart a wad of cash and say "I love you this much", but that's a little too transparent.
  - richardw 10y ago
    In our culture, maybe. https://en.m.wikipedia.org/wiki/Lobolo https://en.m.wikipedia.org/wiki/Lobolo
  - deleted 10y ago
    [deleted]
  - praptak 10y ago
    I'd say burn the cash.The beauty of the diamond scam is that the resale value of diamonds is practically zero. Just as the peacock tail is costly to have and has zero practical value other than showing that its owner can bear the cost.
  - cortesoft 10y ago
    It is not just about spending the money; the diamond (and jewelry in general) is a signaling mechanism. It is supposed to communicate to OTHER people 'my spouse is successful and loves me this much'. A wad of cash does not do this, unless you literally carried it around on your hand.
themartorana 10y ago
Diamond Foundry ain't that much cheaper than the real McCoy. I thought synthetic diamonds were gonna save me a bucket of money?
- aab0 10y ago
  I would guess that the natural diamonds' prices have fallen as the synthetics increasingly set a price floor. They have such large stockpiles of diamonds and they have to bring in revenue, they can't simply pretend the synthetics don't exist on the market and price accordingly. Or to put it another way: for such perfect substitutes and commodities, the prices should be near-identical, and so it is wrong to try to imply that consumers haven't saved a ton of money because the prices are similar; you need a time-series of prices.
imh 10y ago
Is it impossible for a new player to discover a mine and start selling them for cheaper? Why doesn't this happen if they are so overpriced? They don't all go through the same company, so I would expect someone to try to undercut their competitors.
- Hondor 10y ago
  The idea of the cartel is that nobody would want to sell their diamonds cheaper when they can sell them for more through deBeers. They don't want to get into a price war with each other since then every player will lose.
  - imh 10y ago
    Doesn't everyone in every industry lose if they go into a price war? But they do it anyways. I'm not trying to be argumentative, I just sincerely don't understand what makes diamonds different from other products.
    - fosk 10y ago
      Small number of players, and high barriers to entry the diamond market that prevents that number from growing and disrupt the cartel.
- ridgeguy 10y ago
  What Hondor said, and it's extremely capital-intensive to develop a mine to production. Even after all the geoexploration to find a deposit, it's on the order of $1B - $2B to get into production. You have to move and inspect hundreds of tons of rock to find a carat of diamond in most mines [1]. Mined diamonds can't ever compete with CVD diamond synthesis costs. As more CVD producers come online, I think we'll see prices for synthetics drop drastically. There's a lot of margin available for market-grabbing. [1] http://www.bloomberg.com/news/articles/2016-07-05/first-find-the-world-s-biggest-diamonds-then-don-t-break-them http://www.bloomberg.com/news/articles/2016-07-05/first-find... edited for typos
  - 10y ago
ridgeguy 10y ago
And DeBeers is suing IIa Technologies, which is arguably the current largest (by revenue) maker of synthetic gem diamonds. I think the dinosaur's brain has finally perceived the mammals chewing on its tail. DeBeers won't prevail. The diamond market is about to change completely. The biggest challenges companies like Diamond Foundry and IIa Technologies face is building up their own sales channels. DeBeers is still fairly successful in excluding newcomers from the bourses, or diamond exchanges. But channel building is simply a matter of time and $. Chemical vapor deposition is cheap, and there are many participants. There's Diamond Foundry, IIa Technologies, Scio Diamond Technology, Pure Grown Diamonds, and a ton of small startups in the PRC. If you want a diamond doorknob, you'll probably be able to buy one for $1K in ten years. Five years if you're good friends with somebody in Shenzhen.
yegle 10y ago
Out of curiosity is there a place to buy a large synthesized Diamond to be used as paperweight? I though that would be cool and since I don't need it to be cut the price should be pretty reasonable.
- Animats 10y ago
  Large cubic zirconia jewels are available.[1] This one is 45mm across. Another supplier offers up to 200mm diameter, but that may be a special order item. [1] www.alibaba.com/product-detail/Special-cut-for-synthetic-cubic-zirconia_60074196763.html [2] http://www.frgems.com/large-cubic-zirconia-and-synthetic-lab-gemstones http://www.frgems.com/large-cubic-zirconia-and-synthetic-lab...
- tkhoven 10y ago
  It really depends on how loose your classification of "diamond" is and how large you want. Cubic zirconia is quite popular with hobbyist and some professional faceters and is quite readily available in a range of colours (try searching for cubic zirconia rough) but it's more difficult to manufacture the larger you get. Moissanite is much closer to natural diamond in both hardness and refractive index but it still seems to be fairly inexpensive uncut. Not too familiar with other diamond synthetics but the range seems to be growing.
- miahi 10y ago
  Synthetic diamonds are not that cheap (about 50% of the price of the natural ones), because they are not that easy to make. The large synthetic diamonds are grown in HPHT medium (>2600 degrees C), and even if they are made by a machine, they still grow at an incredibly slow rate (maybe one micron/hour), so you have to keep a huge temperature and pressure for months to get a big one - and maybe at the end it shatters and you just get 3 carat diamonds from it. So the costs are not really paperweight-ready (or maybe you have a few millions to spare for a paperweight). The biggest synthetic diamond data I could find is 60-carat[1] unpolished (10 carat polished). Diamonds are also not really good as a paperweight (one carat is 0.2 grams, a sheet of A4 paper is heavier than a 25-carat diamond). [1] http://www.diamonds.net/Magazine/Article.aspx?ArticleID=53742&RDRIssueID=143 http://www.diamonds.net/Magazine/Article.aspx?ArticleID=5374...
nibs 10y ago
We all still call it Champagne even though rarely does anyone drink sparkling wine from the Champagne region. I suspect diamonds will be the same: most people will consume the "synthetic" ones, which could by almost any physical characteristic be superior, and a small group of people will only buy "natural" on principal.
- chillydawg 10y ago
  Dunno about you, but where I am (London) we certainly do not call sparkling wine not from Champagne, Champagne.
- Evolved 10y ago
  In order to be called Champagne it has to come from the Champagne region of France much like Scotch has to come from certain areas of Scotland and how Bourbon has its own set of requirements (seemingly only applying to Canada and the United States). My suggestion: buy your wife or girlfriend something more valuable than jewelry such as self-defense classes or maybe driving lessons on a track. Despite the short duration of the lessons, it'll still be worth more than a diamond ring in terms of pragmatic value.
  - kirykl 10y ago
    A great suggestion, to spend money on something actually valuable. But I'm pretty sure buying your wife/GF driving lessons as a gift is ill advised :)
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DanBC 10y ago
> Diamond grit for cutting tools is about $100/Kg on Alibaba. Here's a fun video about "mining" recent road works for industrial diamonds. https://www.youtube.com/watch?v=pEONMLsSeds https://www.youtube.com/watch?v=pEONMLsSeds

danieltillett 10y ago

I would love to see this diamond in person, but I can't see it being a good investment given the technological change coming, both in sorting for diamonds up to 5000 carats and the real risk someone will figure out how to grow diamonds this big.

adt2bt 10y ago
I agree. It seems that Lamb advertising that he's installing equipment to look for ~3-5kcarat diamonds is signaling 'just wait, this 1100 carat diamond is gonna be yesterday's news soon.' The expectation that supply will grow ought to drop the price of this super large stone for anyone willing to wait a few years for the next massive one. However, I do think there will always be a market for large diamonds extracted from cold hard Earth. Yes, synthetics will likely eventually surpass these stones. Owning one of the largest natural stones ever found will probably always seem sexier in many (read: likely non-high-tech) circles of ridiculous wealth.
- jonah 10y ago
  Add enough qualifiers and anything can become the most whatever.
jonah 10y ago
What was most interesting to me is that giant diamonds like this regularly get crushed to bits by the extraction process. I wonder how many other 1000+ karat stones have been destroyed in the history of diamond mining.
- gwern 10y ago
  Not that hard to estimate. Lucara mines ~90k carats per quarter (http://www.lucaradiamond.com/i/pdf/CP-Q12016.pdf http://www.lucaradiamond.com/i/pdf/CP-Q12016.pdf), or 360k carats per year. They recovered the OP stone in question after 5 months, and it was not that unprecedented as a sale by them of the Constellation 813-carat stone is also mentioned. So 1 every 6 months or 2 per year is entirely possible at this point. But we'll go with 1 1k stone per year, or 1 per every 360k carats mined. Global diamond output is somewhere on the order of 137 million carats per year (http://www.mining.com/web/despite-de-beers-and-rios-efforts-global-diamond-output-to-jump-1-3-this-year/ http://www.mining.com/web/despite-de-beers-and-rios-efforts-...). If all mining has a similar rate but they are crushing the big ones, then that suggests that 137000 / 360 = 380 stones are being destroyed each year currently. Production has risen steeply over history (http://www.gia.edu/cs/Satellite?blobcol=gfile&blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadername2=MDT-Type&blobheadername3=Content-Type&blobheadervalue1=attachment%3B+filename%3DGlobal-Rough-Diamond-Production-Since-1870&blobheadervalue2=abinary%3B+charset%3DUTF-8&blobheadervalue3=application%2Funknown&blobkey=id&blobtable=GIA_DocumentFile&blobwhere=1355958157734&ssbinary=true http://www.gia.edu/cs/Satellite?blobcol=gfile&blobheader=app...) but "The total global production from antiquity to 2005 is estimated to be 4.5 billion carats". So for an all-time estimate, 11*360 + 4500000 / 360 = 16460. This seems improbably high: surely at least some of those 16k giant stones would've survived? So maybe Lucera's current mine got lucky, or it's unique in providing lots of giant stones. ("It has an enviable share of the world’s heavyweight diamonds. Of the 52 biggest diamonds discovered in the past three centuries, 10 have come from Lucara in the past three years. With modifications under way at the mill, Lucara will soon be able to recover diamonds up to 3,000 carats, and next year, up to 5,000 carats—as big as a softball.") Still, I would personally stay the hell away from giant diamonds as any kind of investment or prestige trophy.

JoelBennett 10y ago

So if synthetic diamonds are coming down in price, what other uses are there for them? They seem to be quite good at conducting heat. Could we use them in other areas where we are currently using other less expensive but less efficient alternatives? Diamond thermal paste is already a thing, right?

corndoge 10y ago
Yes, if you want to grind a hole right through your die.
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sliverstorm 10y ago
There's sapphire watch faces for hardness, and sapphire substrate for semiconductors (https://en.wikipedia.org/wiki/Silicon_on_sapphire https://en.wikipedia.org/wiki/Silicon_on_sapphire)
- TheOtherHobbes 10y ago
  I'm expecting genuine diamond iPhone and Watch "glass" within a few years.
  - SkyMarshal 10y ago
    That would actually be amazing, imagine the PR power Apple could put behind "perfectly manufactured, conflict-free diamond screens", "better and more flawless than any natural diamond, only the absolute best for our customers". They could even create the equivalent of a "perfect pixel" guarantee - "perfect lattice" guarantee, the diamond screen is flawless down to the atom or your money back. That could flip the script on DeBeers in a big way.
    - toufka 10y ago
      Well, Apple tried for the iPhone, and I do believe the watch actually does have a synthetic sapphire screen.. Apple purchased a major stake in a sapphire-making business [1]. But it seems that it still was a bit on the tricky side compared with the recent upgrades in glass technology. [1] https://www.technologyreview.com/s/532636/why-apple-failed-to-make-sapphire-iphones/ https://www.technologyreview.com/s/532636/why-apple-failed-t...

ars 10y ago

This could really use a summary version for people who don't need to know what he had for breakfast. I.e. a version that focuses just on the diamond trade, and skips the "color". In really short: The seller tried to bypass the traditional people who buy and see these diamonds, and they were not happy. Typical unethical behavior of people trying to protect a dying income stream.

gaius 10y ago
Its part of the narrative. Everyone else is a snob but this guy is down-to-earth that he cares about what breakfast costs still.

Fej 10y ago

It is a wonderful, particular type of schadenfreude to watch old, corrupt monopolies collapse.

pselbert 10y ago

It is difficult to feel for a cartel that was so powerful as to establish the country of Rhodesia[1]. The exorbanant value of diamonds have hurt people for a long time, well before the modern notion of "blood diamonds." 1: https://en.m.wikipedia.org/wiki/Cecil_Rhodes https://en.m.wikipedia.org/wiki/Cecil_Rhodes

cloudjacker 10y ago

If you look at Sotheby auction stats, most things don't meet the reserve bid.

adriand 10y ago

This is a beautifully written piece. Lucid, absorbing, compelling, with a great sense of pace and timing. Brilliant piece of work.

notyourwork 10y ago
It read as if the author was trying too hard.
- sirclueless 10y ago
  If by "trying too hard," you mean "researched something over the course of several months instead of paraphrasing an AP or Reuters blurb," then yes I agree. And the world needs more of it.
Pxtl 10y ago
Normally find this kind of long-form article terribly tedious, but I was engrossed. I like that he didn't leave the auction until the final act, but instead gave it upfront and then went into the flowery background.

nathanvanfleet 10y ago

A lot of this article is just about the "magic of diamonds." Rich people seem to get really interested in the science when it comes to their luxury goods. The author goes on talking about how it's as if there is a light shining from inside it... it looks like a lump of quartz.

alfanick 10y ago

Just aside question: does anyone know any rss feed of Vanity Fair/Hive? Googled, found article about RSS on VF, but no actual feed.

Evolved 10y ago

An interesting conundrum would be if now diamonds that are almost flawless became worth more than completely flawless diamonds due to synthetic diamond manufacturers being unable to produce diamonds with actual flaws. These flaws would virtually guarantee that the diamond is natural.