The image of the diamond industry was somewhat soiled last year when it emerged that several synthetic stones had been marketed as natural.
The incident that set several tongues wagging took place in May 2012, when the International Gemological Institute (IGI) received 1,000 stones at its labs in Antwerp and Mumbai to be certified as natural diamonds.
Of these stones, only 400 were natural diamonds, while the rest turned out to be synthetics.
One industry source cited in the AWDC and Bain & Company third annual report on the global diamond industry claimed that some synthetics were induced impurities that made them appear natural upon first inspection.
IGI co-chief executive Roland Lorié was quoted by Rapaport News as saying that there had not been a similar occurrence of so many goods caught at its labs at one time since last May. However, he said that the volume of individual stones or pieces of jewelry being detected had increased.
“Every week, we have a few stones or rings that come in as natural diamonds but are proven to be synthetic,” he said.
“So we’re not dealing with big quantities, but there have definitely been more occurrences.”
IGI said it had received four synthetic stones out of 19 submitted by a large unnamed retail chain during the last week of October this year.
Lorié said the biggest challenge remains in detecting those really small melee goods which are sold in parcels consisting of thousands of diamonds.
Such continued fraudulent activities had prompted the Rapaport Group to issue out a trade alert last month to the diamond industry warning buyers of these synthetic lab-grown diamonds that are being mixed with natural diamonds in parcels of melee and pointers.
De Beers’ Diamond Trading Company Research Center also reported several cases of undisclosed submissions of synthetic diamonds to grading labs in China and India.
It said such mixed parcels were mainly prevalent in Asia.
“It said such mixed parcels were mainly prevalent in Asia.”
“We have offices in India and people on the ground in China. There are mixed parcels out there. This is not make-believe. I don’t believe people should think all is well. There is a real problem out there,” said Rapaport chairperson Martin Rapaport.
“This creates a very dangerous situation for the structure of the industry in terms of the smaller- and medium-sized dealers.”
He argued that there was need for the diamond industry players to have better control of their supply chains.
“I hope the solution is that we will pay more attention to who we buy from,” he said. “You need to know your suppliers. How much do you trust your people?”
Laboratories such as AG&J, HRD and IGI are said to be developing and actively marketing new testing equipment in response to attempts to pollute the pool of natural diamonds.
De Beers also recently announced that it had developed a synthetic melee detector that can automatically check large volumes of small diamonds for authenticity.
The diamond giant was confident that the equipment would be effective in detecting small synthetics in parcels.
It was also hoping that the deployment of the device would strengthen the industry’s ability to detect synthetics in the pipeline.
However, Rapaport News noted that as it stands there was no foolproof way to test the parcels as the current technology required sample testing.
“As it stands there was no foolproof way to test the parcels.”
It said the current tests were also done in a “tedious and expensive stone-by-stone basis, using the De Beers-developed DiamondView, DiamondSure, or DiamondPlus machines”.
[two_third]The Rapaport Group argued that the industry should insist on full transparency of synthetic diamonds based on the three D’s.
These were sufficient detection, disclosure and documentation of synthetic diamonds.[/two_third]
“The three D’s : Detection, Disclosure and Documentation.”
Alarming, as it might sound, Lorié said he was afraid that the cheating problem could reach unsettling levels within two to three years if it was not dealt with properly now.