Questions for Mr. Zarakhani of d.neadiamonds.com lab created diamonds

[diagem]

Date: 6/13/2008 1:28:36 PM
Author: EEFranklin

Date: 6/13/2008 6:51:03 AM
Author: DiaGem
Thanks Eric...,

The surface of the blue synthetic rough seems very smooth..., it actually seems *as* it have been polished..., is that the outcome and sign of the ''regular and consistent growth'' which Clark McEwen said/wrote?

Yes, this follows what Clark was saying, and again, that picture is unaltered, as they come out of the machine.

Could be beautiful enough to leave untouched...

Could you please post images of other examples of different shapes/structured rough? When you get some?

That is the only picture of rough I have available. Clark did post a picture of his yellow rough over here. The two colors primarily grow in each of the two respective shapes shown in ours and Clark''s pictures.

Did you ever witness a growth resulting in a perfect octahedron? Is it possible even?

Now..., I have a hypothetical question...

If a potential client wants to acquire synthetic rough material ''only'' for the use of specialty type cuts..., is/will there be possibility? Presuming we are talking about a type of transaction that will be based on transparency and ethical behaviour!

I think this is beyond the educational scope of the forum. D.NEA only handles the finished product and doesn''t offer rough to anyone. You could contact Alexei offline and discuss this further with him.

I doubt it as it was a hypothetical question only..., not a personal enquiry...
But I think if we learn about the different marketing techniques between MMD''s and ND''s (Natural Diamonds) is certainly educational...

Since unique is becoming a greater demand these day''s..., I would figure a lot of potential lies in serving the needs of innovative cutters that think "out-side the box"

.

Hope you can share my vision...

 

[EEFranklin]

Date: 6/13/2008 4:04:20 PM

Did you ever witness a growth resulting in a perfect octahedron? Is it possible even?

They do not grow in full octahedrons. The yellows grow closer to half an octahedron (as in Clark''s picture) and the blues are the shape you see above.

I doubt it as it was a hypothetical question only..., not a personal enquiry...

But I think if we learn about the different marketing techniques between MMD''s and ND''s (Natural Diamonds) is certainly educational...

Since unique is becoming a greater demand these day''s..., I would figure a lot of potential lies in serving the needs of innovative cutters that think ''out-side the box''

.

Hope you can share my vision...

I suppose I skipped the hypothetical part. Oops! We have had many requests for rough from different entities, but the rough has always stayed within AOTC. Once polished and graded, they go over to D.NEA. The majority of our cuts are round, princess and radiant. That (currently) fits well with our customer''s requests. Personally, just having a blue diamond, regardless of cut is quite unique.

We have done a couple patented cuts, but they are still marketed and sold through D.NEA. Below is an Ice-Flower cut we did. So, the possibility for unique cuts is there, and just depends on the circumstances, consumer demand, logistics for cutting, etc...

 

[Alexei Zarakhani]

Date: 6/12/2008 3:29:07 PM
Author: thing2of2

I''m especially interested in how your lab created diamonds are made, what they are made of

Slowly catching up with questions...

As I''ve I already mentioned, we grow diamonds using a HPHT method. A detailed description of it is available in scientific literature and on internet. I''ll just schematically explain it for educational purposes here.

To grow a diamond you will need an apparatus that could create and maintain tremendous pressure and heat. Also you will need a “growth cell” which you put inside this machine and in which a synthesis of a diamond takes place. A “growth cell” is just a ceramic box on a bottom of which you put a tiny diamond crystal, a so-called “seed”. On top of it you put a mix of powders of different metals and additives, it serves as solvent/catalyst, and a graphite powder which is a source of carbon for a diamond to be grown. When you put a prepared cell into a machine and apply heat and pressure, metal begins to melt and graphite begins to dissolve in that molten metal. When all graphite is dissolved, you start cooling a seed in order to attract “free” carbon atoms to a diamond seed. Under a high pressure these carbon atoms when reach a surface of a seed begin building a diamond continuing a crystal structure (lattice) of the tiny seed. This process could continue until molten mental become poor with carbon, e.i. until most of the initial carbon will crystallize as a diamond. That''s how synthetic diamonds are grown by HPHT method.

In case of mineral (aka natural) diamonds a similar process took place. Natural diamonds were crystallized out of molten rock (not of metal) at much higher temperatures (at which rocks are melting). That''s why in HPHT grown diamonds inclusions are metallic and in natural ones are non-metallic. But the essence of both processes is similar: carbon dissolved in a molten substance, extremely high pressure, a seed, a flow of carbon atoms to a seed, a diamond structure growth. Those are all natural processes. Growing a diamond, we just recreate necessary conditions and allow the nature to do the rest.

Off course, It''s a simplified explanation of the process. In fact, it''s not as simple as it may sound.

 

[diagem]

Date: 6/13/2008 4:58:10 PM
Author: EEFranklin

Date: 6/13/2008 4:04:20 PM

Did you ever witness a growth resulting in a perfect octahedron? Is it possible even?

They do not grow in full octahedrons. The yellows grow closer to half an octahedron (as in Clark''s picture) and the blues are the shape you see above.

Interesting...., thanks for the info.

I doubt it as it was a hypothetical question only..., not a personal enquiry...

But I think if we learn about the different marketing techniques between MMD''s and ND''s (Natural Diamonds) is certainly educational...

Since unique is becoming a greater demand these day''s..., I would figure a lot of potential lies in serving the needs of innovative cutters that think ''out-side the box''

.

Hope you can share my vision...

I suppose I skipped the hypothetical part. Oops! We have had many requests for rough from different entities, but the rough has always stayed within AOTC. Once polished and graded, they go over to D.NEA. The majority of our cuts are round, princess and radiant. That (currently) fits well with our customer''s requests. Personally, just having a blue diamond, regardless of cut is quite unique.

Its getting less and less unique...

We have done a couple patented cuts, but they are still marketed and sold through D.NEA. Below is an Ice-Flower cut we did. So, the possibility for unique cuts is there, and just depends on the circumstances, consumer demand, logistics for cutting, etc...

Yes, I know the possibility for unique cuts is there..., but I hear from you it is only possible within AOTC or D.NEA premises...
If outside entities want to develop innovative cuts, they still depend on the Natural Rough Diamond supply.

Thanks for answering...

 

[Clark McEwen]

Date: 6/13/2008 5:50:49 PM
Author: DiaGem

Date: 6/13/2008 4:58:10 PM

Author: EEFranklin

Date: 6/13/2008 4:04:20 PM


Did you ever witness a growth resulting in a perfect octahedron? Is it possible even?

They do not grow in full octahedrons. The yellows grow closer to half an octahedron (as in Clark''s picture) and the blues are the shape you see above.


Interesting...., thanks for the info.

I doubt it as it was a hypothetical question only..., not a personal enquiry...


But I think if we learn about the different marketing techniques between MMD''s and ND''s (Natural Diamonds) is certainly educational...


Since unique is becoming a greater demand these day''s..., I would figure a lot of potential lies in serving the needs of innovative cutters that think ''out-side the box''

.


Hope you can share my vision...

I suppose I skipped the hypothetical part. Oops! We have had many requests for rough from different entities, but the rough has always stayed within AOTC. Once polished and graded, they go over to D.NEA. The majority of our cuts are round, princess and radiant. That (currently) fits well with our customer''s requests. Personally, just having a blue diamond, regardless of cut is quite unique.


Its getting less and less unique...

We have done a couple patented cuts, but they are still marketed and sold through D.NEA. Below is an Ice-Flower cut we did. So, the possibility for unique cuts is there, and just depends on the circumstances, consumer demand, logistics for cutting, etc...

Yes, I know the possibility for unique cuts is there..., but I hear from you it is only possible within AOTC or D.NEA premises...

If outside entities want to develop innovative cuts, they still depend on the Natural Rough Diamond supply.


Thanks for answering...

Not to hijack Alexi''s thread but to clarify your assumption, each Lab-grown diamond producer has their own distribution model. Unlike AOTC/D.NEA Gemesis sells nothing but rough which allows cutters to polish the stone into whatever shape they want...several of our customers are currently doing proprietary cuts.

 

[Alexei Zarakhani]

Date: 6/13/2008 5:59:48 PM
Author: Clark McEwen

Date: 6/13/2008 5:50:49 PM

Author: DiaGem

Date: 6/13/2008 4:58:10 PM


Author: EEFranklin

Date: 6/13/2008 4:04:20 PM



Did you ever witness a growth resulting in a perfect octahedron? Is it possible even?

They do not grow in full octahedrons. The yellows grow closer to half an octahedron (as in Clark''s picture) and the blues are the shape you see above.



Interesting...., thanks for the info.

I doubt it as it was a hypothetical question only..., not a personal enquiry...



But I think if we learn about the different marketing techniques between MMD''s and ND''s (Natural Diamonds) is certainly educational...



Since unique is becoming a greater demand these day''s..., I would figure a lot of potential lies in serving the needs of innovative cutters that think ''out-side the box''

.



Hope you can share my vision...

I suppose I skipped the hypothetical part. Oops! We have had many requests for rough from different entities, but the rough has always stayed within AOTC. Once polished and graded, they go over to D.NEA. The majority of our cuts are round, princess and radiant. That (currently) fits well with our customer''s requests. Personally, just having a blue diamond, regardless of cut is quite unique.



Its getting less and less unique...

We have done a couple patented cuts, but they are still marketed and sold through D.NEA. Below is an Ice-Flower cut we did. So, the possibility for unique cuts is there, and just depends on the circumstances, consumer demand, logistics for cutting, etc...

Yes, I know the possibility for unique cuts is there..., but I hear from you it is only possible within AOTC or D.NEA premises...


If outside entities want to develop innovative cuts, they still depend on the Natural Rough Diamond supply.



Thanks for answering...

Not to hijack Alexi''s thread but to clarify your assumption, each Lab-grown diamond producer has their own distribution model. Unlike AOTC/D.NEA Gemesis sells nothing but rough which allows cutters to polish the stone into whatever shape they want...several of our customers are currently doing proprietary cuts.

Hi Clark,

You are always welcome. I haven''t followed this thread today, just finished a post on HPHT process. Well, it gets interesting what Eric came up with...

On the shape of blues - natural diamonds of IIa type do not grow as octahedrals en masse. Without nitrogen it is a similar process more or less. Yes, those were our blue roughs pictured in 2004, I thought they are more spherical though. We can grow blue octahedrals as well, but... and here I step into IP issues.

On other remark - yes, a normal logic tells me they are getting less and less unique. Most likely, AOTC produce more blue diamonds than it is currently mined. But, hey, we are part of the diamond industry - more diamonds are annually produced, more they become unique, more demand, prices go up and so on... A normal logic doesn''t work here.

And on your third remark - I totally agree with you, it depends on a business model. We outsource cutting keeping our control over distribution. Having said that, we are not closed for other options if we see a potential in them.

Going back to my writing on differences b/w lab created and natural.

 

[Alexei Zarakhani]

Date: 6/12/2008 3:29:07 PM
Author: thing2of2

how exactly they differ from natural diamonds.

Laboratory grown diamonds are real diamonds. They have the same chemical composition, same crystal structure, same physical, optical and chemical properties as natural diamonds. So, vital to any gemologist characteristics such as hardness, dispersion, refractive index, density, etc. are the same for both natural and grown diamond since they are both real diamonds.
However, the difference in growth environment between natural and lab created diamonds certainly leads to minor differences between them.
As I mentioned in my previous post, inclusions (if there are any) are different. HPHT grown diamonds have metallic inclusions while in natural diamonds they are non-metallic.A microscope, or even a loupe, is enough to distinguish between them.
Sometimes, as was the case 5-7 years ago, most yellow synthetic diamond exhibited a characteristic LW UV fluorescence patterns – the famous “green cross” is one of those. We fine tuned the technology and for several years we haven''t this phenomena in our yellows. All our stones (blue, yellow, colorless) do not show any LW UV fluorescence.
So, if there are no inclusions in a lab diamond and it doesn''t exhibit fluorescence then you need more sophisticated equipment – spectrometers, but they are costly. FTIR and EDXRF spectrometers can detect traces of metal (coming from HPHT process) in a diamond. An alternative way is cathodoluminscence (CL) spectrometer which allows to see different growth sectors in diamond. In a vast majority of HPHT created diamonds both cubic and octahedral sectors are present while natural diamonds have only octahedral sectors. Finally, there is a Diamond View machine produced by De Beers, it is based on SW UV imaging and allows to see the same growth patterns as in CL-spectroscopy.

 

[Alexei Zarakhani]

This is to my previous post.

In an attached picture only HPHT diamonds are shown, cubic sectors are much brighter than octahedral. In natural diamonds those bright patterns are not present.

 

[Alexei Zarakhani]

Date: 6/12/2008 3:29:07 PM
Author: thing2of2


Do the diamonds you create start off as rough and then get cut?


I''m also interested in the performance of these diamonds. Do you cut them to the same parameters as a natural diamond is cut to regarding angles, table %, depth %, etc?


Are there different cut grades for your lab created diamonds? Do you create super ideal cut diamonds?


Thank you for your time!

Yes, grown rough diamonds are cut the same way as natural diamonds do. Pictures of rough grown diamonds were posted on this and Clark McEwen''s thread. Usually, the same parameters are applied in regard to geometry (angles, depth, etc), symmetry, surface quality. However, for colored diamonds, natural and created alike, those parameters may vary from those for white stones.

There are several major labs grade laboratory created diamonds now - GIA, EGL and IGI. All of them use the same cut grades as for natural diamonds.

No, currently we don''t do superideal cut.

Finally, I''ve answered all your questions.

 

[Alexei Zarakhani]

Date: 6/13/2008 1:58:58 PM
Author: strmrdr
Have you considered having a cut optimization study done?

If your rough is fairly consistent you could add a ton of money to your bottom line by optimizing for color, performance and yield over just saying cut these.

Answering this I would side with Clark McEwen - no two lab grown diamonds are alike, each one is different. Placement, quantity, size of inclusions differ from stone to stone. Absolutely he same as for naturals.
On the other hand, one could optimize yield (in cutting) by selecting one shape over the other by looking at a model of a rough. However, our choice of shape is based on consumer demand. For example, the best shape for our blues in regard to yield is iceflower - Eric has already posted those pictures - but consumers ask for rounds, princesses, asschers. Thus, we do those.
Color and performance optimization makes sense for colorless diamonds and as soon as this group overtake our colored group we will cut for performance. Currently, our main production is in blues.

 

[Alexei Zarakhani]

Date: 6/13/2008 6:44:46 PM
Author: Alexei Zarakhani

Date: 6/13/2008 5:59:48 PM

Author: Clark McEwen

Date: 6/13/2008 5:50:49 PM


Personally, just having a blue diamond, regardless of cut is quite unique.




Its getting less and less unique...

Hi Clark,




On other remark - yes, a normal logic tells me they are getting less and less unique. Most likely, AOTC produce more blue diamonds than it is currently mined. But, hey, we are part of the diamond industry - more diamonds are annually produced, more they become unique, more demand, prices go up and so on... A normal logic doesn''t work here.

Clark,

Re-reading yours and my own posts. Both of us, probably, meant rare instead of unique. For every diamond is unique. Every diamond carries its own set of imperfections which makes it unique. As I wrote earlier, no two lab grown diamonds are alike.

Good night.

 

[Clark McEwen]

Clark,


Re-reading yours and my own posts. Both of us, probably, meant rare instead of unique. For every diamond is unique. Every diamond carries its own set of imperfections which makes it unique. As I wrote earlier, no two lab grown diamonds are alike.


Good night.




Hi Alexei,

It was not my post it was from DiaGem....my post was attached to their''s.

Cheers,
Clark

 

[EEFranklin]

Author: Alexei Zarakhani

Clark,

Re-reading yours and my own posts. Both of us, probably, meant rare instead of unique. For every diamond is unique. Every diamond carries its own set of imperfections which makes it unique. As I wrote earlier, no two lab grown diamonds are alike.

Good night.

Author: Clark McEwen
Hi Alexei,


It was not my post it was from DiaGem....my post was attached to their''s.


Cheers,

Clark

I believe that was my post. I used the word "unique" in reference to DiaGem''s quote about the specialty cuts:

Date: 6/13/2008 4:04:20 PM
Author: DiaGem

Since unique is becoming a greater demand these day''s..., I would figure a lot of potential lies in serving the needs of innovative cutters that think "out-side the box".

Yes, rare may have been the better term. Sorry for any confusion.

 

[denverappraiser]

Hi Alexei,

In your d.nea advertising you offer a trade-in credit for people who wish to upgrade their AOTC stones purchased through d.nea in the future that is based on the then present price of a comparable stone as of the date of the trade in. This raises a concern over the expected changes in pricing over time. With mined diamonds there is a long history backed by limited supply, labor costs, etc. but synthetics are a completely different model that seems to be mostly limited by how much your investors and your competitors are willing to invest in the production facilities and the ability of your engineers to come up with new and better ways to do things. Engineers seem to always win in this sort of arms race so I think it’s fair to expect that both you and your competitors will improve in both skills and tools over time. This holds the potential for drastic changes in value. What do you foresee happening with the prices and availability of synthetic diamonds in general and AOTC diamonds in particular for, say, the next 10 years? Do you expect significant changes in, for example, your ability to grow larger and/or less included stones?

As an only slightly related question, is your tradein policy transferable? If one of your customers sells their stone to someone else, can the new buyer trade it in on a different stone using this program?

Neil

 

[diagem]

Alexei or Eric..., thanks for the interesting dialogue...

We both (natural and laboratory Diamond industry members) can profit from these types of dialogues...

Another question..., do you create elongated rough crystals for long shapes? Is the outcome of shape controllable?

 

[Alexei Zarakhani]

Hi Clark,

Sorry for the mess. I looked at the last post and answered it thinking that highlighted text is yours. Please accept my apologies.

Kind regards,

 

[Alexei Zarakhani]

Date: 6/14/2008 12:03:38 PM
Author: DiaGem



Another question..., do you create elongated rough crystals for long shapes? Is the outcome of shape controllable?

We don''t grow elongated shapes. That''s why marquise cut is extremely rare with our stones.
We can control only hight to planar dimensions (parallel to a seed area)ratio, making a rough taller or shorter. Planar dimensions in 99% cases are squarish or roundish.

 

[Alexei Zarakhani]

Date: 6/14/2008 9:27:16 AM
Author: denverappraiser
This raises a concern over the expected changes in pricing over time. With mined diamonds there is a long history backed by limited supply, labor costs, etc. but synthetics are a completely different model that seems to be mostly limited by how much your investors and your competitors are willing to invest in the production facilities and the ability of your engineers to come up with new and better ways to do things.

Neil

Hi Neil,

Indeed, D.Nea offers a lifetime trade-up and and buy back (see policies here ). Currently, those policies are applied only to loose AOTC Created diamonds and they do not apply to finished jewelry. We fully understand risks involved and liabilities stemming from such policies. A few remarks, though:
1. D.Nea is a retail front-end of AOTC, it''s just a tip of AOTC'' distribution network. A number of stones sold through D.Nea is is single percentage points of overall AOTC sales. So, it is not financially difficult for AOTC to support those policies should something nasty happens.
2. So far, D.Nea sells only to retail customers. It has just recently started a pilot program for other retailers and jewelers. The policies in question do not apply to those sales.
3. Statistically, a percentage of customers willing to trade-up or sell back is quite small. BTW, D.Nea already have a few cases of trade-up.

We adopted those policies on a retail level to give our customers a piece of mind in regard of owning a lab created diamond. Having said that, our decision if favor of those policies was made not on the basis of our marketing but on a strong belief that prices will be firm going forward.


Needless to say, there lots and lots of cliché/stereotypes circulating around created diamonds. You mentioned only a few of them.


It is true that majority of people really expect that synthetic (grown, created, whatever) diamonds should be inexpensive. It is just a common belief created by mass media which is absolutely not true.(Why media created such a cliché is another question?).
Why lab grown diamonds should be inexpensive? In fact, they are not, a cost of production (synthesis) is relatively high and, probably, is on par if not higher than of mined diamonds.

If you look into our production cost structure you''ll see that the major component is consumables - high purity metals, graphite, etc. - prices for those go up regardless of what we do.
The next component is labor - unfortunately, by default we can''t reach the same level of automation as in chipmaking or electronics - it will still have to employ x number of people to operate and service y number of machines. Off course, more capacity you have less employees you need per one growth unit. But those savings are very insignificant. Labor costs will remain our second largest expense without regard where our production facility is. A qualified personnel is now very expensive everywhere and priced more or less equally. An engineer in Shanghai earn, probably, more than its peer in the American Mid-west. And concerning your reference to labor costs in a diamond industry, they in our case are higher per employee and per carat produced.
Some think – and that''s another stereotype - that a production of lab grown diamonds is quite simple, not more complicated than operating a microwave. Bought necessary equipment, plugged it in, pressed a button and, voila, diamonds in great numbers start rolling out, all of them of D color and, for sure, of IF clarity (that''s another batch of stereotypes, btw).
No, the process is complex and demands highly skilled employees. Plus, equipment is rather expensive.
So, the third our component is capital cost. Again, equipment is getting more and more expensive. It''s a general trend. Commodities, labor went up, so did equipment.
If we (lab grown diamond producers) are to take 10% of thee world diamond market, we have to produce at least 15 MM cts annually. To be able to do so we need to spend only on equipment somewhere around $10 bln. Not a small amount! Probably, it would be less expensive to buy shovels an go digging somewhere in Canada.
BTW, energy is minor component in overall cost.

Summing up, I don''t see major downward changes in production costs and in our overall cost structure unless, as you suggest, scientists and engineers come up with something "new and better".

I will stop here and continue to answer your questions later. Have to go now. Sorry.

 

[denverappraiser]

Andrei,

These preconceptions come from a variety of different sources. Perhaps there is something of an agenda at play but I think more significantly it’s a matter of observing what is seen as a pretty high tech product and the general lack of ‘real’ information about it made available to the public. That’s why I’m so pleased to see you, Eric and Clark being so forthcoming, presumably because of the value of the intellectual property involved. Other industries, microchip makers come to mind, manage to make some mindbogglingly complicated products for unbelievably cheap prices and people have become accustomed to that being the pattern to expect. Things like successfully dropping a robot on Mars barely even makes the news because people have become so accustomed to miracles like this. Making of diamonds seems somehow ordinary. Part of the problem may also be that with most of these other products, there’s a reasonable expectation of product obsolescence. The next generation is expected to be better and this is ok because an 'upgrade' is expected where diamonds, pretty much by definition, don’t have this. The usable life can reasonably be expected to last forever.

I was actually asking about the tradeup program from the consumers perspective rather than how you would financially support it although that too is an interesting topic. It does seem to be fairly unique in the synthetic industry and even rather few natural diamond retailers will match it. It’s definitely a vote of confidence in your products. You didn’t mention if it’s transferable from one consumer to another. For a tradein or a buyback to be valid, does it need to be submitted by the original buyer? Also, you mentioned that it doesn’t apply to stones bought through retailers. Does this include Pearlmans? While we're on the topic of the trade in program, if someone trades in a stone for a new one, does the new one come with the same privileges as the first and are there any limits to this?

If the Toronto stock exchange is any evidence, a lot more people seem to want to invest in Canadian shovels than manufacturing labs as a way of sourcing diamonds but that doesn’t mean those people are making a sound decision. There doesn’t seem to be any pure plays for investors wishing to get a piece of the synthetic business and financial data is pretty hard to come by. Although it's theoretically available with the big and public companies like Sumitomo it’s very difficult to separate their diamond businesses from their numerous other activities. Private companies obviously are interested in keeping their financial affairs to themselves and this leaves an opportunity for lots of wild speculation.

Neil Beaty,
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[iheartscience]

Date: 6/13/2008 9:19:12 PM
Author: Alexei Zarakhani

Date: 6/12/2008 3:29:07 PM

Author: thing2of2


Do the diamonds you create start off as rough and then get cut?


I''m also interested in the performance of these diamonds. Do you cut them to the same parameters as a natural diamond is cut to regarding angles, table %, depth %, etc?


Are there different cut grades for your lab created diamonds? Do you create super ideal cut diamonds?


Thank you for your time!

Yes, grown rough diamonds are cut the same way as natural diamonds do. Pictures of rough grown diamonds were posted on this and Clark McEwen''s thread. Usually, the same parameters are applied in regard to geometry (angles, depth, etc), symmetry, surface quality. However, for colored diamonds, natural and created alike, those parameters may vary from those for white stones.

There are several major labs grade laboratory created diamonds now - GIA, EGL and IGI. All of them use the same cut grades as for natural diamonds.

No, currently we don''t do superideal cut.

Finally, I''ve answered all your questions.

Thank you for all of your answers! This is a very interesting and informative thread. I think I was feeling extra curious when I came across it because I felt the need to bombard you with questions!

 

[EEFranklin]

Date: 6/14/2008 7:53:24 PM
Author: denverappraiser
Andrei Alexei,

These preconceptions come from a variety of different sources. Perhaps there is something of an agenda at play but I think more significantly it’s a matter of observing what is seen as a pretty high tech product and the general lack of ‘real’ information about it made available to the public. That’s why I’m so pleased to see you, Eric and Clark being so forthcoming, presumably because of the value of the intellectual property involved. Other industries, microchip makers come to mind, manage to make some mindbogglingly complicated products for unbelievably cheap prices and people have become accustomed to that being the pattern to expect. Things like successfully dropping a robot on Mars barely even makes the news because people have become so accustomed to miracles like this. Making of diamonds seems somehow ordinary. Part of the problem may also be that with most of these other products, there’s a reasonable expectation of product obsolescence. The next generation is expected to be better and this is ok because an ''upgrade'' is expected where diamonds, pretty much by definition, don’t have this. The usable life can reasonably be expected to last forever.

Those are some very insightful comments, Neil. People do come to expect Moore''s Law to apply to most everything high-tech anymore, myself included. These mass produced items that will be obsolete in just a few years causes that uncertainty, though like you pointed out, diamonds don''t become obsolete, unlike my Commodore 64

.

There is much to be understood about the growth process for diamonds and the associated costs. Alexei''s comment a couple posts up addresses many of these issues. It is certainly not an assembly line that grows diamonds by the truck load, like you see in microchips or other high-tech industries.

I was actually asking about the tradeup program from the consumers perspective rather than how you would financially support it although that too is an interesting topic. It does seem to be fairly unique in the synthetic industry and even rather few natural diamond retailers will match it. It’s definitely a vote of confidence in your products. You didn’t mention if it’s transferable from one consumer to another. For a tradein or a buyback to be valid, does it need to be submitted by the original buyer? Also, you mentioned that it doesn’t apply to stones bought through retailers. Does this include Pearlmans? While we''re on the topic of the trade in program, if someone trades in a stone for a new one, does the new one come with the same privileges as the first and are there any limits to this?

The Trade-up/Buy-back policies were developed to promote consumer confidence and stability, given how relatively new the gem-quality synthetic diamond industry is. We didn''t have a team of lawyers develop these policies and there isn''t any fine print, so we will be refining and adapting them as needed. In fact, I think I wrote the first draft myself. Since the diamonds are all graded and laser inscribed, I don''t see transferability being much of an issue, though we should probably incorporate a "transfer of ownership" program to keep a paper trail. All the trade-ups we have had so far were from the original buyer, but I don''t see that as an absolute requirement.

Our retail program is still in it''s pilot stages, so it isn''t completely developed, and we haven''t finalized any retailer-specific policies yet. As of today, the current policies are applicable to all stones we have sold.

Because of Pearlman''s relationship with D.NEA, D.NEA''s policies apply in full. In fact, if you call Pearlmans to make a purchase, the sale actually goes through D.NEA, not Pearlmans.

When trading in, the current policies apply fully to the new stone.

Disclaimer (since this thread should be viewable for years to come): Though we have yet to change our policies, we reserve the right to adapt and refine them over time, especially to further define and clarify some of the above topics.

 

[EEFranklin]

Date: 6/14/2008 9:17:54 PM
Author: thing2of2

Date: 6/13/2008 9:19:12 PM

Author: Alexei Zarakhani

Yes, grown rough diamonds are cut the same way as natural diamonds do. Pictures of rough grown diamonds were posted on this and Clark McEwen''s thread. Usually, the same parameters are applied in regard to geometry (angles, depth, etc), symmetry, surface quality. However, for colored diamonds, natural and created alike, those parameters may vary from those for white stones.

There are several major labs grade laboratory created diamonds now - GIA, EGL and IGI. All of them use the same cut grades as for natural diamonds.

No, currently we don''t do superideal cut.

Finally, I''ve answered all your questions.

Thank you for all of your answers! This is a very interesting and informative thread. I think I was feeling extra curious when I came across it because I felt the need to bombard you with questions!

Please, bombard away! We are here to educate you and the others on PS.

Something Alexei briefly mentioned that I wanted to further emphasize, that we get quite a few questions on, is the cut. The cut parameters you see for white diamonds, like these, don''t necessarily apply to colored diamonds.

 

[diagem]

Date: 6/15/2008 12:12:41 AM
Author: EEFranklin

Date: 6/14/2008 9:17:54 PM
Author: thing2of2

Date: 6/13/2008 9:19:12 PM

Author: Alexei Zarakhani

Yes, grown rough diamonds are cut the same way as natural diamonds do. Pictures of rough grown diamonds were posted on this and Clark McEwen''s thread. Usually, the same parameters are applied in regard to geometry (angles, depth, etc), symmetry, surface quality. However, for colored diamonds, natural and created alike, those parameters may vary from those for white stones.

There are several major labs grade laboratory created diamonds now - GIA, EGL and IGI. All of them use the same cut grades as for natural diamonds.

No, currently we don''t do superideal cut.

Finally, I''ve answered all your questions.

Thank you for all of your answers! This is a very interesting and informative thread. I think I was feeling extra curious when I came across it because I felt the need to bombard you with questions!

Please, bombard away! We are here to educate you and the others on PS.

Something Alexei briefly mentioned that I wanted to further emphasize, that we get quite a few questions on, is the cut. The cut parameters you see for white diamonds, like these, don''t necessarily apply to colored diamonds.

What would be the difference?

After all, your (and others) colored synthetic rough looks (to me) as solid and even full bodied type color hue''s..., unlike natural colored rough that suffers from color-zoning, natural color coating, and many other factors that stand as obstacles for the cutter to conquer.

I have not searched much..., but I did notice that the synthetic colored diamonds are cut to normal ''colorless'' type cuts..., than why dont normal cuts apply to your colored Diamonds?

 

[Clark McEwen]

Date: 6/15/2008 4:19:36 AM
Author: DiaGem

Date: 6/15/2008 12:12:41 AM

Author: EEFranklin

Date: 6/14/2008 9:17:54 PM

Author: thing2of2

Date: 6/13/2008 9:19:12 PM


Author: Alexei Zarakhani


Yes, grown rough diamonds are cut the same way as natural diamonds do. Pictures of rough grown diamonds were posted on this and Clark McEwen''s thread. Usually, the same parameters are applied in regard to geometry (angles, depth, etc), symmetry, surface quality. However, for colored diamonds, natural and created alike, those parameters may vary from those for white stones.


There are several major labs grade laboratory created diamonds now - GIA, EGL and IGI. All of them use the same cut grades as for natural diamonds.


No, currently we don''t do superideal cut.


Finally, I''ve answered all your questions.

Thank you for all of your answers! This is a very interesting and informative thread. I think I was feeling extra curious when I came across it because I felt the need to bombard you with questions!

Please, bombard away! We are here to educate you and the others on PS.


Something Alexei briefly mentioned that I wanted to further emphasize, that we get quite a few questions on, is the cut. The cut parameters you see for white diamonds, like these, don''t necessarily apply to colored diamonds.

What would be the difference?

After all, your (and others) colored synthetic rough looks (to me) as solid and even full bodied type color hue''s..., unlike natural colored rough that suffers from color-zoning, natural color coating, and many other factors that stand as obstacles for the cutter to conquer.


I have not searched much..., but I did notice that the synthetic colored diamonds are cut to normal ''colorless'' type cuts..., than why dont normal cuts apply to your colored Diamonds?

I''ll jump in on this one...you are absolutely right, there are no differences in the cut parameters after all they are both diamond...in fact we find that lab-grown stones tend to be cut "better" than natural stones for two reasons...the stones don''t exhibit the same amount of color zoning and typically have more "saturation" of color so the need to play with the cut to push more color through the top is not necessary. Ane the second reason is due to the fact that unlike a natural stone each point does not represent the same extremely high value so cutters are more apt to cut the lab-grown stones for life rather than trying to save a few points.

 

[Alexei Zarakhani]

Date: 6/15/2008 4:19:36 AM
Author: DiaGem

Date: 6/15/2008 12:12:41 AM

Date: 6/13/2008 9:19:12 PM


Author: Alexei Zarakhani


However, for colored diamonds, natural and created alike, those parameters may vary from those for white stones.

What would be the difference?

After all, your (and others) colored synthetic rough looks (to me) as solid and even full bodied type color hue''s..., unlike natural colored rough that suffers from color-zoning, natural color coating, and many other factors that stand as obstacles for the cutter to conquer.


I have not searched much..., but I did notice that the synthetic colored diamonds are cut to normal ''colorless'' type cuts..., than why dont normal cuts apply to your colored Diamonds?

I''ll clarify my earlier message on cut parameters for colored diamonds.

First of all, my words may vary, in fact, in no way meant that we are using some different (from colorless) set of cut parameters. No, currently we use exactly the same. Those issues that you''ve just mentioned referring to natural diamonds are not characteristic for lab grown diamonds, so as Clark has already addressed, there much less obstacles for cutter with synthetic diamond vs natural. Cut optimization to enhance color, which is widespread for natural stones, is not necessary for lab grown - color of our stones is saturated enough, plus we can change saturation levels at synthesis stage.

Secondly, by saying may vary I actually meant the following. A white light entering a colored diamond is being absorbed and only a light of a certain color is being reflected/emitted. For example, in a blue diamond all colors of a spectrum are being absorbed and only blue light is reflected, in red diamond - red, in yellow one - yellow. Strictly speaking, refraction increases as wavelength of emitted light decreases. Blue light (shorter wavelength) is slowed more and therefore experience more bending than do red light (longer wavelength). So, a white light entering colorless and, say, blue diamond will be reflected at slightly different angles because of different refraction indexes. Ideally, cut parameters to enhance light return for blue and red diamonds should be optimized for this and vary from those of colorless diamond. For yellow and green diamonds it is not necessary to do since respective wavelengths for green and yellow fall close to a center of a color spectrum.

On a side note, radiant and princess cuts produce more saturated color than a traditional round cut.

 

[Alexei Zarakhani]

Date: 6/14/2008 7:53:24 PM
Author: denverappraiser

Other industries, microchip makers come to mind, manage to make some mindbogglingly complicated products for unbelievably cheap prices and people have become accustomed to that being the pattern to expect. Things like successfully dropping a robot on Mars barely even makes the news because people have become so accustomed to miracles like this. Making of diamonds seems somehow ordinary. Part of the problem may also be that with most of these other products, there’s a reasonable expectation of product obsolescence. The next generation is expected to be better and this is ok because an ''upgrade'' is expected where diamonds, pretty much by definition, don’t have this. The usable life can reasonably be expected to last forever.

A HPHT method of growing diamond is over 50 years old and many scientists and engineers from many countries worked and continue to work it. Indeed, over those years microchip and electronics industries experienced tremendous progress with prices for the same level of performance were steeply falling every year and continue to do so while in case of synthetic diamonds everything was more or less stable. But I don''t think it''s prudent to compare this industry to microchip manufacturing – you are trying to compare production of raw material to device manufacturing, it''s not right. I''d rather compare our industry to steel making. Steel making had several millennia of R&D with thousands of scientists and engineers still trying to improve processes, properties, yield, quality, etc. Despite those efforts prices didn''t go down to the same extent as in microchip industry. Besides, over those years no revolutionary method was invented to significantly (as in case of microchips) reduce cost of steel production. I see here a lot of similarities.

Expectations of majority of people that lab grown diamonds should be inexpensive, most likely, stem from misrepresentation and excessive use of “lab-grown”, “synthetic”, “man-made”, etc. standing before a word “diamond” to describe various diamond simulants, imitations. It''s just a common perception – everything “synthetic” (leather, fabric, etc.) should be much less expensive than natural. True, those simulants (CZ, moissanite, etc.) are really inexpensive but they aren''t real diamonds either. This practice of such misrepresentation is officially forbidden in majority of countries, including the USA (by FTC). And, apparently, Jewelers Vigilant Committee (JVC) has to stand on guard to protect and educate consumer but, unfortunately, I don''t see much progress. At least not in this case. That''s why we, producers of lab-grown diamonds, patiently have to educate public on all the aspects of what we do.

 

[Alexei Zarakhani]

Date: 6/14/2008 9:27:16 AM
Author: denverappraiser

Engineers seem to always win in this sort of arms race so I think it’s fair to expect that both you and your competitors will improve in both skills and tools over time. This holds the potential for drastic changes in value. What do you foresee happening with the prices and availability of synthetic diamonds in general and AOTC diamonds in particular for, say, the next 10 years? Do you expect significant changes in, for example, your ability to grow larger and/or less included stones?


Neil

The current process can and will be improved. It will be possible produce diamonds of better clarity, colors and larger sizes, we can optimize our production technology further to achieve certain cost savings but those improvements won''t be significant for “drastic changes” in cost. Now we can grow a reasonably clean yellow 3 ct diamond within four days. I doubt it can ever be done within 1 hour. A diamond grows by the laws of nature and those can''t be changed.

There is another method to grow diamonds – CVD process. Despite all the euphoria around it, CVD has yet to prove its viability as method of growing diamonds in application to jewelry industry. Shape of crystals and resulting size ranges, colors (I''m comparing whites to whites), cost of production do not match en masse to stones grown by HPHT or to natural diamonds. Besides, diamond growth rates are no higher than with HPHT.

 

[diagem]

Date: 6/16/2008 10:08:39 AM
Author: Alexei Zarakhani

Date: 6/14/2008 7:53:24 PM
Author: denverappraiser

Other industries, microchip makers come to mind, manage to make some mindbogglingly complicated products for unbelievably cheap prices and people have become accustomed to that being the pattern to expect. Things like successfully dropping a robot on Mars barely even makes the news because people have become so accustomed to miracles like this. Making of diamonds seems somehow ordinary. Part of the problem may also be that with most of these other products, there’s a reasonable expectation of product obsolescence. The next generation is expected to be better and this is ok because an ''upgrade'' is expected where diamonds, pretty much by definition, don’t have this. The usable life can reasonably be expected to last forever.

A HPHT method of growing diamond is over 50 years old and many scientists and engineers from many countries worked and continue to work it. Indeed, over those years microchip and electronics industries experienced tremendous progress with prices for the same level of performance were steeply falling every year and continue to do so while in case of synthetic diamonds everything was more or less stable. But I don''t think it''s prudent to compare this industry to microchip manufacturing – you are trying to compare production of raw material to device manufacturing, it''s not right. I''d rather compare our industry to steel making. Steel making had several millennia of R&D with thousands of scientists and engineers still trying to improve processes, properties, yield, quality, etc. Despite those efforts prices didn''t go down to the same extent as in microchip industry. Besides, over those years no revolutionary method was invented to significantly (as in case of microchips) reduce cost of steel production. I see here a lot of similarities.

Expectations of majority of people that lab grown diamonds should be inexpensive, most likely, stem from misrepresentation and excessive use of “lab-grown”, “synthetic”, “man-made”, etc. standing before a word “diamond” to describe various diamond simulants, imitations. It''s just a common perception – everything “synthetic” (leather, fabric, etc.) should be much less expensive than natural. True, those simulants (CZ, moissanite, etc.) are really inexpensive but they aren''t real diamonds either. This practice of such misrepresentation is officially forbidden in majority of countries, including the USA (by FTC). And, apparently, Jewelers Vigilant Committee (JVC) has to stand on guard to protect and educate consumer but, unfortunately, I don''t see much progress. At least not in this case. That''s why we, producers of lab-grown diamonds, patiently have to educate public on all the aspects of what we do.

Alexei...,

When it comes to production, marketing, and value..., how would you compare between synthetic vs. natural Diamonds and synthetic vs. natural colored gem stones?

Is it comparable? Or similar?

 

[Garry H (Cut Nut)]

Date: 6/16/2008 10:37:37 AM
Author: DiaGem
Alexei...,

When it comes to production, marketing, and value..., how would you compare between synthetic vs. natural Diamonds and synthetic vs. natural colored gem stones?

Is it comparable? Or similar?

That is probably unfair because the cost of a mined stone includes the cost of prospecting which is never quoted in the miners 100% mark up DG

 

[Alexei Zarakhani]

te:[/b] 6/16/2008 10:37:37 AM
Author: DiaGem

Alexei...,


When it comes to production, marketing, and value..., how would you compare between synthetic vs. natural Diamonds and synthetic vs. natural colored gem stones?


Is it comparable? Or similar?[/quote]

Hi DiaGem,

I haven''t forgot about your question. I just can''t devote enough time to PS, I''m so sorry. Such a short question required a detailed answer. Nevertheless, I''m readying my reply, hope it will be out towards the end of the day.