De Beers stakes its reputation on spotting the difference
De Beers guarantees all its own mined diamonds are natural and authenticates diamonds for third parties.
ENGLAND - In nature it takes billions of years to produce a diamond, or a laboratory can grow one in days and to the untrained eye, it looks the same.
For De Beers, telling the difference is fundamental to protecting its reputation as the world's leading diamond firm by value and holder of a roughly 30 percent share of the market for genuine rough diamonds.
It guarantees all its own mined diamonds are natural, authenticates diamonds for third parties and makes money from selling its detection equipment.
Increasingly sophisticated technology to produce synthetic diamonds drives industry-wide demand for the means to determine whether a stone was created in the earth's mantle or is man-made.
The difference is more than emotional. Synthetic diamonds sell for an estimated 30 percent less than the real thing and have no investment value. Any unscrupulous retailer passing off the man-made as natural would be committing fraud.
"For the diamond business, the one thing you don't want is for consumers to lose trust," Jonathan Kendall, president of De Beers' International Institute of Diamond Grading and Research, said.
Far from the diamond-rich kimberlite rock of South Africa, staff at a De Beers laboratory in leafy Maidenhead, west of London, say they can determine with 100 percent accuracy whether a diamond is natural or synthetic.
De Beers itself has a unit that makes synthetic diamonds, but only for industrial usages, such as drilling and cutting. All the rough diamonds De Beers sells for jewellery are real.
If anything, the pressure on De Beers to be the industry standard has increased as its indebted parent Anglo American (AAL.L) has placed it at the core of a slimmed down portfolio, with a view to strengthening the balance sheet following a commodities rout.
Approximately 300,000 carats of synthetic diamonds are produced a year, compared with approximately 130 million carats of rough diamonds mined annually, analysts say.
They also say technological advances will produce more synthetic diamonds and of better quality, while natural production is expected to stagnate.
De Beers guarantees all its own mined diamonds are natural. It also authenticates diamonds for third parties and makes money from selling its detection equipment.
Kendall says that since De Beers took back a distribution license in late 2012 from the Gemological Institute of America, the world's biggest diamond grading laboratory, it has sold tens of millions of pounds worth of equipment to detect synthetic diamonds to other diamond traders and jewellers.
THE SIXTH ELEMENT
De Beers' synthetic diamond unit Element Six, the world's leading supplier of synthetic industrial diamonds, takes its name from the place of carbon, from which diamonds are made, in the periodic table.
De Beers does not break out Element Six's results, but says demand is affected by factors such as a slow-down in drilling because of cheaper oil.