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Tribune photo by JIM REED

Chris Owens of Gemesis holds a rectangle of material removed from one of the company's diamond making machines. Inside the white rectangle is a new man made diamond.

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By RICHARD MULLINS | The Tampa Tribune

Published: December 16, 2007

TAMPA - Sherry Giglia's eyes light up as she peers into a display case of jewelry made with especially rare yellow diamonds — $5,000 rings, $10,000 bracelets. One $70,000 necklace especially stands out.

But these diamonds did not come from a mine in Africa, or the arctic fields of Canada or Russia.

They were manufactured for a lot less money in about four days in a suburban factory 50 miles south, near Sarasota. Rather than a turnoff, that man-made aspect appeals to Giglia, who describes herself as "a jewelry girl."

"They're beautiful," Giglia said. "I like that they're really environmentally friendly, and they're a real diamond. But they don't come from any horrible places you hear about with the blood diamonds. ... Maybe I'll get one. It's my birthday."

Just in time for the holidays, such manufactured diamonds are poised to shake up the $180 billion world diamond market, shifting perceptions of what a "real" diamond is really worth. This summer, Tampa's upscale Magnon Jewelers started carrying a line of man-made diamonds and has sold several $5,000 engagement rings set with the jewels.

Small and dark manufactured diamonds, used in saw blades to cut concrete and steel, have been around since the 1950s. Now a few companies are making larger, clearer diamonds at sizes and colors sometimes better than gems found in nature — at fraction of the cost. Though made in labs, the stones are chemically and physically real diamond, not fakes, sparking a very real debate among jewelers and diamond companies that rely upon the subjective and widespread belief that rare gems are valuable in their own right.

London-based diamond giant DeBeers, in particular, is launching a "crafted by nature" marketing campaign to defend natural diamond appeal. And diamond associations are pushing the federal government to officially call the diamonds "synthetic" rather than "cultured," as lab-made diamond companies would prefer.

"Of course, my customers would not be interested in those, anything made in a factory," said Tina Little, owner of Queens' Wreath Jewels in Sarasota, which regularly sells $300,000 natural-diamond necklaces. "They have no intrinsic value. There is no value in giving your wife a diamond ring that is not natural, rare — something a person sweats and works to pay for."

Nature's Pressure Cooker

Though a tiny fraction of diamond production overall, the very emergence of manufactured diamonds threatens to shift a complex structure of powerful corporations that make billions off of selling diamonds that come from the ground.

Natural diamonds probably formed millions of years ago, miles underground, under immense pressure and heat that causes carbon atoms to form into raw diamond crystals. Geological eruptions shoot the diamonds closer to the surface.

At one point, DeBeers controlled world diamond distribution and sold diamonds in pre-set groupings to a club of less than 100 invited dealers at non-negotiable prices. Because dealers could only go to DeBeers for diamonds (or risk not being invited back), they paid the required price and passed the cost on to consumers, maintaining the overall price of diamonds in the market.

Now, however, DeBeers controls less of the market as Canadian and Russian companies have developed their own diamond mines and taken control of their own distribution.

Made In Florida

That insular diamond trade attracted the attention of Carter Clark, a retired U.S. brigadier general who ran a company producing antitheft tags for retail stores in the 1990s. While visiting Russia, he heard of scientists researching ways to make diamonds for electronic parts.

They used a washing machine-sized hydraulic press to exert crushing pressure and heat on a capsule of carbon, growing crystals in days. Abandoned by Cold War-era Soviet support for research, the scientists offered the technology to Clark, who brought a prototype machine (and several Russian scientists) back to the University of Florida for development.

After a decade in the lab and some equity investment by the university, a new company, Gemesis Corp., made its first production in 2002 in a Sarasota facility with a half-dozen machines.

The company's big break came in January, when the Gemological Institute of America began officially grading manufactured diamonds with the same characteristics used for natural diamonds: cut, clarity, color and carat weight.

"I think guys tend to like the science behind how they're made, rather than just get sticker shock," said Winnie Magnon Marvel, president of Magnon Jewelers. Rather than describe the gems as interchangeable with natural diamonds, her store plays up the differences with man-made stones — their ecological and social appeal.

Demand this year has surged at Gemesis and other diamond makers. Now each diamond being made in 200 machines at Gemesis is already sold, and the company is building an addition to double its space and add at least 100 more machines.

Other Companies

That rush of business matches growth at other diamond companies. For several decades, Chatham Created Gems Inc. in San Francisco had been making emeralds, sapphires and other gems using tall, hydraulic presses.

Now producing 1,000 diamonds a month, "We can't keep up with demand," said Tom Chatham, president and CEO. "Manufactured diamonds are kind of a problem the industry is trying to get their arms around. They seem to accept cultured pearls, so we'll see."

Recently, a Boston company, Apollo Diamond Gemstone Inc., developed a way to inject superhot gasses into a submarine-looking vacuum chamber embedded with diamond seeds. The gasses crystallize on the seeds into diamonds that are often clearer than many found in nature.

"It can be a temperamental technology," said Bryant Linares, president of Apollo Diamond Gemstone, which intentionally prices its diamonds about 15 percent below the price of natural stones. "But we're formally selling to customers through Web inquiries and a jeweler in Boston, and we're making gem-quality diamonds up to 2 carats right now."

The Chicago company LifeGem markets its diamonds another way: offering to convert the ash remains of loved ones into diamonds.

One of its big breaks came two years ago, when actress Drea De Matteo, who played Adriana La Cerva on HBO's "The Sopranos," told a talk-show host her dog died but she would have its remains turned into a ring by LifeGem.

"All the sudden, our Web site went nuts," said Dean VandenBiesen, a co-founder of LifeGem. "We're on pace to sell 1,000 gems this year."

Market Demand

This rush of development comes at a turbulent time for diamond companies. The 2006 Leonardo DiCaprio film "Blood Diamond" dramatized warring factions in Africa funding their operations by selling raw diamonds — leaving a lasting impression on some diamond shoppers. Meanwhile, the last major diamond field was discovered more than a decade ago in arctic Canada.

Global diamond production may have peaked at 2004 levels of about 165 million carats a year, according to Richard Wake-Walker, president of the London research firm WWW International Diamond Consultants Ltd. Any new mine would take seven to eight years to establish.

Meanwhile, India and China have rapidly growing middle classes that are fast adopting the American tradition of giving diamonds, adding to demand. Wake-Walker forecasts diamond prices will rise 50 percent during the next decade.

While prices of rarer so called "fancy colored" diamonds vary, an intense yellow diamond may cost $20,000 per carat. A similar-sized version from Gemesis might cost $6,000 to $7,000 per carat, company officials said.

Gemesis mostly makes a yellowish diamond, partly because the nitrogen that creates a yellow hue can be hard to eliminate. Soon, Gemesis and Chatham expect to start selling higher-priced pink and blue diamonds.

Jewelers Disagree

With progress come skeptics. More than a dozen jewelers have started selling Chatham, Apollo and Gemesis diamonds. Other jewelers are less enthusiastic, including several in the upscale shopping area of St. Armands Circle, a few miles from the Gemesis factory.

"I don't have people coming in here raging for lab-created diamonds," said Skip Ennis, owner of the Joan Michlin Galleries art jewelry store that has some diamond pieces selling for $58,000 or more. "They're interesting, but I'd have to learn a lot more about them."

Neither Tiffany & Co., Cartier nor BlueNile.com, the nation's largest online diamond seller, intend to sell manufactured diamonds.

There may be a long way to go before large numbers of customers accept and desire man-made diamonds, Gemesis officials say.

But they note that all pearl production at one time came from naturally occurring oysters. Now more than 90 percent are "cultured" in industrial farms offshore.

This month, Gemesis launched a publicity push, buying seven pages of Town & Country magazine to advertise jewelry companies using Gemesis diamonds — including the $70,000 Solaura necklace that caught Giglia's eye.

Cost Comparison

Prices vary widely for diamonds. Colored stones are rarer and more expensive than clear ones — and they're growing in popularity. Now lab-made diamonds are entering a market dominated by naturally occurring jewels. Below is a rough comparison of their prices.

COLORLESS STONES

Natural: Prices for clear, round diamonds, the stalwart tradition of engagement rings, vary from $1,000 to $30,000 per carat, based on size, shape, clarity and color. A half-carat stone can cost $1,700. Online jeweler BlueNile.com sells a 1-carat, colorless, ideal cut, very clear stone for $8,200.

Manufactured: Half-carat stones and larger came to the market this summer, some with clarity better than any found in nature. Boston-based Apollo sells a half-carat, clear stone, which can cost $1,500.

COLORED STONES

Natural: Yellow, pink and blue diamonds are exceptionally rare and becoming more popular — typically the richer the better. A 2.2-carat, round cut, yellow diamond can cost $30,000. BlueNile.com sells a 10.38-carat, fancy yellow diamond for $185,000 and a 1.5-carat, yellow-green, vivid stone for $375,000.

Manufactured: Companies such as Gemesis, Chatham and Apollo sell stones wholesale to polishers and jewelers. Retail prices range from $2,000 to $4,000 per carat but rise exponentially with size.

Cubic Zirconia. A staple of knockoff jewelry, CZ is synthesized material that is hard, clear and often polished to replicate diamonds, although a close look reveals its origin. A clear, 1-carat stone can cost $50 or less. Changing the chemicals involved in the process, technicians can make CZ into virtually any color.

Sources: Gemesis Corp., Chatham Created Gems Inc., Apollo Diamond Gemstone Inc., Gemological Institute of America, BlueNile.com, staff research

Reporter Richard Mullins can be reached at (813) 259-7919 or rmullins@tampatrib.com.

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