De Beers: No Need to Flag Synthetics Treatments

RAPAPORT... De Beers claims it doesn't need to disclose treatments to its lab-grown diamonds, placing itself at odds with many synthetics traders pushing for full transparency in the sector.The company's synthetics brand, Lightbox, applies post-growth enhancements to its colored lab-grown diamonds, it confirmed with Rapaport News. However, it doesn't need to tell consumers, because the processes don'taffect the value, and are just one more step in a man-made technological process, a spokesperson argued."Our colored (pink and blue) stones are manufactured by a combination of modifications to the synthesis conditions and treatments after synthesis," Sally Morrison, chief marketing officer at Lightbox, wrote in an email to Rapaport News last week. "Lab-grown diamonds are a manufactured product, and as such it really doesn't matter how many stages there are to the overall manufacturing process, or whether these comprise separate stages of synthesis and post-synthesis treatment."The company also has no problem with the wider lab-grown trade treating diamonds without disclosure, though Lightbox doesn't enhance its own white stones. Those items come out of its presses with good-enough color, enabling it to keep the cost down by avoiding an extra manufacturing phase. Many other producers do improve the color of their white stones through processes such as High Pressure-High Temperature (HPHT). Morrison refused to specify which enhancement methods Lightbox used. "All HPHT treatments really do is add cost and complexity to the manufacturing process," Morrison noted. "This may in part explain why some other lab-grown-diamond manufacturers charge higher prices than Lightbox."Still, the production cost is roughly the same forLightbox's white, blue and pink stones, despite the extra stages involved inthe latter two colors, Morrison noted. That's one of the reasons the companysells everything at $800 per carat, rather than charging more for coloredstones, she said. Full transparency? De Beers' stance on disclosure places the company as anoutlier in the debate on whether such transparency is necessary in thelab-grown sector. The US Federal Trade Commission's jewelry guidelines, whichinstruct businesses how to market diamonds fairly to consumers, give threecircumstances in which sellers must disclose treatments to natural or syntheticstones: If the process is not permanent, requires special care, or has asignificant effect on the stone's value. The first two do not apply to colortreatments to lab-grown diamonds, but the third might. "In my opinion, since post-growth treatments are typicallydone to make the laboratory-grown diamonds marketable, that triggers the thirdprong of treatment disclosure," noted Sara Yood, senior counsel at the JewelersVigilance Committee, which advises the trade on legal matters. The issue is important for the industry as the syntheticsmarket is full of white stones with undisclosed treatments, according to BenHakman, a consultant on lab-grown diamonds at New York-based Diamond DNASolutions. The largest producers, mainly in India, pump out brownish goodsintended as whites, and then treat them for color. "The consumer is supposed to know about it," Hakman said,arguing that disclosure standards should apply equally to natural and syntheticstones. "What does it have to do with...[it] being a lab-grown diamond? You'rejustifying treating something without disclosure, and that makes Lightbox nodifferent from all the other guys." In certain categories, consumers will pay about 10% more for untreated whitesynthetics than enhanced lab-growns with the same characteristics, Hakmanreported. "There is a premium [on untreated], but the thing is, theyjust fly off the shelf," Hakman said. "In fancy shapes up to 1.99 carats androunds from 1.30 to 1.99 carats, the untreated goods sell the day they arriveon the market." Pinks are slightly different: It's almost impossible tocreate them in a machine without further treatments, so "as-grown" goods barelyexist, explained Tamazi Khikhinashvili, president of Russian synthetics makerNew Diamond Technology. Yet, full transparency is essential for all colors, heasserted. "It's very important for the buyer that people know whatthey're buying," he noted. Image: Lightbox jewelry. (De Beers)