Jeweller: The Great Diamond Debate - Round II

WORLD FEDERATION OF DIAMOND BOURSES
Keep your diamonds transparent to
avoid misleading consumers
ERNIE BLOM‘S KEY POINTS:
The World Federation of Diamond Bourses allows member bourses to set their own synthetic diamond trading policy
Synthetic diamond manufacturers must be held to the same strict standards as diamond mining companies
Consumers should be fully informed about the attributes of each product, including environmental impact and resale value
The Great Diamond Debate is a very important
conversation that continues to develop. As
president of the World Federation of Diamond
Bourses (WFDB), the largest global diamond
industry body, there are several relevant points
to be made on behalf of the organisation.
At the outset, let me stress that the WFDB allows each
bourse to make its own decision regarding trading in
synthetics on their premises. For example, the Bharat
Diamond Bourse in Mumbai does not allow trading
in such stones.
Meanwhile, the Federation of Belgian Diamond
Bourses has banned trading of lab-growns in any of
the trading halls of its four exchanges, although it will
still be permitted in private companies’ offices; the
same rule applies at the Israel Diamond Exchange.
Earlier this year, a tender of rough synthetics took
place at the Dubai Diamond Exchange.
I must also stress that the WFDB has no issue with
synthetics, just as long as they are fully disclosed.
They are clearly a separate niche market, and
whoever wants to buy such stones is, of course,
free to do so.
Would I recommend proposing to a partner with a
synthetic stone? Frankly, I would not, but we are all
free to do what we believe is right.
ENVIRONMENTAL CLAIMS
However, I believe that consumers must be fully
informed on which type of stone they are spending
their money when they buy such a product.
They must know that they are purchasing stones that
are mass-produced in factories and made in a month
or two using large amounts of electricity in order to
create heat and pressure for the production process.
Since most synthetic stones are made in China and
India, where more than 80 per cent of electricity is
generated by burning coal, their carbon footprint is,
necessarily, high.
This is, therefore, at odds with the claims of synthetics
manufacturers who have described their products as
being ‘eco-friendly’ in order to appeal, in particular, to
Millennial consumers. It is only right that this should
not go unchallenged.
This is also in the interest of the synthetic diamond
manufacturers themselves, who face being ‘caught
out’ by consumers searching for detailed information
about the manner in which the stone they bought
was made.
The WFDB is in favour of complete transparency
regarding diamond mining and this must also be the
standard of the synthetics manufacturers, regarding
production processes.
We accept that diamond mining also has an
environmental impact and miners must use
more renewable energy sources and reduce their
carbon emissions.
In this respect, I would point to the efforts of De
Beers, which is investing in technology to store
carbon in the rocks at mines, and aiming to create its
first carbon-neutral pit.
Clearly, this is still some way from happening, but the
very fact that it is taking place shows the concern of
diamond miners for the environment and climate
change. And with De Beers leading the way, it is likely
that other companies will follow suit.
COST AND VALUE
Another important point that buyers of synthetics
should bear in mind is that the production cost of
these stones is declining continuously. What this
means, in practice, is that they have little inherent
value on the day they are bought and practically no
resale value.
Let us compare that with diamonds from the Earth,
which are billions of years old and have proved for
thousands of years that they retain their value – and,
indeed, can increase with time.
This is the reason that they are handed down from
generation to generation: not simply because of
their sentimental value, but because of their financial
value as well.
I believe it would be fair and accurate to say that this
is unlikely to happen with a synthetic diamond.
And, finally, I would point out that it is important to
keep in perspective the impact of synthetics.
Although the media coverage has been high,
synthetic stones are still a very small part of annual
global polished supply: around 2–4 per cent of the
approximate $US19 billion in polished sales per year.
As I mentioned above, it is incumbent on both the
diamond industry and the synthetic manufacturers to
be completely transparent and honest in marketing
and selling.
This is most certainly the approach that we are taking,
and we hope that the synthetic diamond companies
will do likewise. i
ABOUT THE AUTHOR
Ernie Blom is president of the World
Federation of Diamond Bourses (WFDB) and
serves on CIBJO’s Presidents Council. He is a
lifelong member of the diamond industry.
December 2019 Jeweller 29