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Commodities

De Beers defends turf against China's lab-made diamonds

World's largest diamond company frames synthetic gem stones as casual jewelry

Diamonds can be produced in bulk in just a few weeks in a lab.

TOKYO -- Global diamond leader De Beers stunned the industry in late May when it said it would reverse a long-standing policy and start marketing a synthetic-diamond brand, a move made necessary by the rising standards and growing production of the man-made gems by Chinese manufacturers.

Known for the famous ad catchphrase "a diamond is forever," De Beers will launch online sales of the Lightbox Jewelry brand of synthetic diamonds in the U.S. as early as September.

Unlike naturally occurring diamonds, which form over the course of billions of years, synthetic diamonds are made in a matter of weeks. Their affordable price points are the biggest allure: a 0.25-carat stone starts at $200 in retail, and 1 carat at $800 -- less than a tenth the price of high-quality natural diamonds that go into engagement rings.

Naturally occurring diamonds in blue and pink hues are rare, and thus can cost more than $900,000  per carat. But lab-grown varieties in those tones will be within reach even for younger consumers.

De Beers sources diamonds in mines in Africa, and effectively controlled the market through 2000. It is also involved in retailing the gem and is known for a line inscribed with unique identification numbers. It has long kept its distance from lab-made diamonds.

" By promoting the notion that they are for day-to-day use, the company is probably trying to establish a market for synthetic diamonds completely separate from that for natural diamonds," said Nobuyuki Harada of Tokyo-based jewelry trading company Suwa.

Lab-made diamonds look the same as natural stones to the naked eye.

But the mixing of lab-made diamonds with natural ones is a serious problem for natural diamond businesses. Mass-produced diamonds in China are shipped to India, the hub of cutting and polishing operations, where mingling can occur by accident as stones from multiple customers converge at the processing facilities.

Lab-made diamonds have long been used for industrial applications. As technology advances, however, Chinese labs have learned to create not only the smaller, yellowish stones but also larger, colorless versions -- broadening their use in the jewelry business. Diamond labs in China often feature thousands of units of synthesizing equipment, with each one producing 100 gems at a time.

There are ways to detect the artificial gems. Chinese diamonds made in high-temperature, high-pressure conditions glow for a long time when exposed to ultraviolet rays. Jewelry makers and trading companies have no choice but to inspect their diamonds using special equipment -- and the costs are appreciable. "We spend a considerable amount of money to authenticate our products," an official at a big jewelry company lamented.

With technology continuing to advance in China, Ahmadjan Abduriyim, president of Tokyo Gem Science, predicts that production costs will continue to drop. As De Beers embarks on its new venture in synthetic diamonds, all eyes are on the fate of the business and how consumers respond.

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