It was with a bit of feeling of dread that I looked at my inbox and saw that someone had sent me another article by Chaim Even Zohar, ‘Exposing the Fraudulent Undisclosed Synthetic Diamond Trail’, Charles Wyndham says in an article posted on www.polishedprices.com.
I read it and have to say that I think it is an excellent piece of investigative journalism.
I do not want to dwell upon or reiterate any of the findings by Chaim, he puts it very clearly and I hope that the piece in his DIB gets the widest possible circulation.
There can be no argument that the deliberate passing off of synthetic, or I would prefer the description ‘cultured’, diamonds as natural is simple fraud and as such is a criminal offence.
It is also obvious that it is in the interests of the industry to do all it can to ensure that those perpetrating this criminal activity are brought to justice and hounded out of the industry.
However, that said, I do think that the whole affair raises some interesting issues over the whole issue of cultured diamonds and beyond.
Firstly, I would argue that it is in part the industry’s totally negative approach to cultured diamonds that has made such an event more likely.
When Gemesis and Apollo first started up, amidst a blaze of publicity (remember the photo of the empty hangar in Time Magazine that was going to be filled with furnaces to make trillions of diamonds), as to how they were going to take over the world of diamonds, the industry’s response was to fight strenuously to try and prevent the use of the word ‘cultured’.
‘Synthetic’ is within the world of diamonds a pejorative term, cultured with the precedent of cultured pearls was seen as being ‘too helpful’; and so, the industry fought tooth and nail to try and get the word ‘cultured’ banned and force the use of the pejorative term, synthetic.
The fact is that the word ‘cultured’ is technically the correct word, as the diamonds at issue are 100% diamond, they are not synthetic, the difference is that they are man made and not dug out of the ground.
This little linguistic distinction is more than simply a mild cat fight going on around the corner, it demonstrated yet again our industry’s antediluvian, knuckle headed attitude to change, or may be a better word might be progress.
Yet again I will repeat my mantra on cultured diamonds, that if handled properly they could actually grow the market for all diamonds.
Passing off cultured for natural is clearly not handling the product correctly, but again not simply from the point of view of someone trying to sell a cheap fake for several times the price.
Given some of the numbers as to money invested in these processes, I think that the parcel of cultured being passed off as natural was probably carrying a much much higher cost of production.
There seems to be some automatic view that cultured diamonds will and have to be sold at some extraordinary discount to natural. I am not sure that that necessarily has to be the case.
It does become more of the case if cultured diamonds are, so to speak, pushed underground.
With drugs, prohibition is what drives the price up. In the case of cultured, the analogy is more that it drives the selling away from being complementary to natural to being some ogre of unfair competition, which in my view is plainly ludicrous and results in exactly the type of situations that Chaim writes about, which is genuinely damaging to natural diamonds.
The world of the absurd has been added to, unfortunately, by Philippe Mellier the CEO of De Beers, who in an interview in Miningmix has come out with another of those knuckle headed mantras, ‘... we (i.e., De Beers / Diamonds) are not a commodity and cannot be treated or managed like iron ore division, or copper division, or platinum division.’
Oh dear, here we go again.
Perhaps someone should whisper in Monsieur Mellier’s ear that the fact that diamonds are a commodity does not mean that diamonds have to be treated in exactly the same way as iron ore, copper or platinum.
Cocoa beans are a commodity and it would be surprising if they were treated in exactly the same way as diamonds, which is not to say that there are not aspects of each business that may not be surprisingly similar and warrant similar treatment.
I would agree with Mellier that diamonds are different, but it is only when everyone recognises that they, rough and loose polished diamonds, are intrinsically a commodity, that the full value of this commodity will be unlocked.
I am sure that Mellier must have discovered that in all the jobs that he has held (apparently 15 in 18 years) that whilst much is different, much is the same, well in motor cars or trains or whatever, just as indeed I am sure that there are some significant differences in selling gold, platinum or iron ore.
Whilst diamonds are different they are not nearly as different as so many seem to be desperate to suggest that they are.
It is like that absurd argument that no two diamonds are exactly the same, give me two of anything that are exactly the same; that is apart from a cloned cow or sheep, certainly not any two cocoa beans.
Again, it is a bit odd that Mellier keeps or screaming that he is in the luxury business.
He may want to be in the luxury business, so much more exciting than scrubbing away at the pit face, but surely that is the role of De Beers LV, the retail outlet of De Beers, not his segment of the company, which is mining and selling rough diamonds.
My concern is that if Mellier is buying into this anally retentive view of diamonds as if they were some fairy god mother’s cake baked in heaven to be only eaten by the club members.
If this is the case then there will be little fundamental change at De Beers.
I chose the word ‘concern’ carefully, as De Beers is slinking into irrelevance.
Anglo’s entry could provide a catalyst for change but it is beginning to look as if it does decide to make changes the goal posts will have moved on and it will continue like the previous management to desperately be playing catch up.... and failing.
