Wednesday, January 26, 2022

The glitter of De Beers’ diamonds is under threat from the sparkle of synthetics

Proposing to your loved one with a gift made from an artificial diamond could be considered disingenuous for the obvious reason that one has failed to add value and emotional attachment to the whole process. But how many of us can tell the difference between a natural diamond and a synthetic one?

Industry experts say for a regular buyer, it is difficult to outwardly distinguish a synthetic colorless diamond of high quality from a similar natural stone. However, this is possible for an expert equipped with certain devices. The emergence of synthetics is traced way back to the 1950s when they were widely used for industrial purposes such as drilling, crushing, sawing, milling, optics, sensors and electronics. Until recently, synthetic diamonds were not used to make jewelry.

The large scale production of synthetic diamonds, mostly from China and Russia, is less worrying to De Beers than the real threat of the US$ 6 billion per annum sale of synthetics being passed off as natural diamonds. China, the main producer of synthetic diamonds, churns out more than 10 billion carats of synthetic diamond powder per annum, of which 80percent of which used within China, captains of industry say.

“The problem is not the production of synthetics but the undisclosed synthetics that are being passed as natural diamonds. We have had instances of synthetic diamonds being passed as natural diamonds,” says David Johnson, De Beers Midstream Communications Manager.

Johnson says it is important for De Beers’ customers to know the origin of diamonds, whether or not they are conflict or blood diamonds and whether they are synthetic or natural, either through detection or disclosure. He added De Beers has shifted its business focus to the financial and emotional value of diamonds as well as ethics and product integrity. To this end, De Beers recently announced the introduction of an Automated Melee Screening (AMS) instrument to differentiate natural diamonds from synthetics at its key diamond trading hubs of Antwerp, Mumbai, Hong Kong and Tel Aviv. The AMS screens near-colorless and colorless round diamonds from 0.2 carats down to 0.01 (about 1.4 mm in diameter) to determine whether or not they are natural.

Johnson further revealed that De Beers also employs a new legally binding declaration in invoices from its sight holders stating that the diamonds they sell to the company are natural, in line with a requirement of the World Federation of Diamond Bourses (WFDB).

The WFDB is a body setup to protect the interests of affiliated bourses and their individual members, and to further the amicable settlement or arbitration of differences and disputes between individual members of affiliated bourses and between affiliated bourses. The AMS will not be introduced in Gaborone until such a time that the future diamond hub starts trading in polished diamonds, said Johnson.

Is Gaborone ready to become a diamond hub city?

“From virtually every cutting and trading centre, the trip to Botswana is much than London. And we are talking substantially longer. From New York to London is six to seven hours; New York to Gaborone, 17. Which means, for U.S. clients, a trip that used to take a few days now takes closer to a week,” Rob Bates, Senior Editor at JCK Magazine, wrote.

Apart from the fact that Gaborone lacks direct international flights, the city has no glamorous entertainment centres like London. Rather, Gaborone’s night life is dull and hours of operation for bars and clubs are restricted ever since Ian Khama assumed power. However, De Beers is not so sure whether Botswana’s non-existent night life would blight its business with its global sight holders.

“Yes it would be better if there were international direct flights to Gaborone. Our sight holders however tell us Gaborone is extremely welcoming and gives a better experience than London. They also mention the availability of leisure facilities. They are happy with the WI-FI connectivity at hotels and a short trip from the airport,” Johnson revealed.

His colleague Pat Dambe-Hansen adds that though Gaborone may not have the type of facilities found in the first world it has its own unique offerings.

“A house can be pretty basic but if the hospitality is warm and inviting it embraces everything around you. Things you see in a developed country aren’t pivotal reasons for you to be there. Service appeal is there in our DNA to welcome our [business] guests,” says Pat Dambe-Hansen, De Beers’ Corporate Affairs head honcho.

De Beers conducts 10 sights every year, with each generating an average of between US$ 500-600 million or US$ 5-6 billion annually. This means therefore from now, these large sums of money will be generated locally. Since the diamond beneficiation began, 3,000 jobs have been created.
Technology has also moved from around the world to Botswana, bringing with it expectations of skills development and burning ambition to turn Gaborone into yet another diamond centre like Tel Aviv, Dubai or Antwerp.

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