Adamas BSU, a Belarusian state unitary enterprise, is the world’s biggest manufacturer of synthetic diamonds, both rough and polished. The company’s products are used in various fields of engineering, electronics, medicine and jewelry business. Diamond mono crystals are grown in 120 synthesis apparatus by the BARS technique. These installations allow not only growing diamonds, but optimizing quality characteristics (color in the first place) of both synthetic and natural crystals. Vladimir Fedorchenko, Deputy Marketing Director of Adamas BSU, answers the questions put by the correspondent of Rough&Polished.

What are the current trends in the market of synthetic diamonds?

According to our data, during the last two years the aggregate demand for synthetic diamonds almost tripled. This was accompanied by a radical change in the structure of demand for mono crystals: if two years ago about 70% of synthetics were used for technical needs and 30% in the jewelry segment, today this correlation is quite the opposite – the jewelry accounts for 70%. Such a development is explained by the following factors: the drop of natural diamond output in physical terms on the background of a continuous growth in demand; levelling of prices and costs for synthetic and natural diamond raw materials used for industrial ends; decision of major gemological laboratories, as for instance that of GIA, to accept synthetic diamonds for certification; and finally the development of processing techniques contributing to greater sizes and quality of synthesized crystals and to optimized color solutions. One can say that the market is gradually getting used to synthetic diamonds and this is an equitable demand of the time.

How difficult is it to distinguish a synthetic polished diamond from a polished diamond made of a natural stone?

One cannot tell a synthetic stone from a natural one judging by their thermal response, electric conductivity and light deflection since both are the same matter which is diamond. Spectroscopy is a more reliable method permitting to detect catalysts used in synthesis in the examined sample. In our products these will be nickel and iron. However, they will not be found in every case. So far polished diamonds made of natural untreated rough diamonds differ from their synthetic counterparts primarily in color. There are virtually no such colors in nature. A serious problem may arise if you have to distinguish a synthetic diamond from a natural one treated by thermo baric annealing – in this instance the error probability will be sufficiently high. I know of cases when gemological laboratories diagnosed lab diamonds free of inclusions as being natural and modified by way of thermo baric annealing.

Such a mistake may cost a fortune, at least in Russia, since natural diamonds circulation in this country is regulated by a rather rigid legislation while there is no similar one for lab diamonds… 

Yes, such a problem does exist. For instance, once we ran into a necessity of proving to the customs that our stones were lab-made. However, on the whole it is an advantage for manufacturers that such stones do not fall within the ambit of laws governing precious metals and gems. This gives more opportunities for market maneuvering.

Is your enterprise able to manufacture absolutely colorless synthetic diamonds?

This is a very costly pleasure. Three years ago we obtained positive results at the level of lab experiments. Colorless crystals require a substantially more complex processing technique involving other types of catalysts, other types of equipment and additional interim expenses. Currently, speaking of tried-and-true yellowish-brown stones we have 90 crystal-filled processes out of 100, while 10 are running blank. One half of the obtained crystals belong to a good gem-quality category, whereas the remaining crystals have inferior characteristics. So our current tasks are to decrease the quantity of blank synthesis and to increase the share of clear and big crystals. If we turn now to synthesizing colorless stones, the share of blank-run synthesis will be more than one half and 80% of the output will be of low quality. Hence, the economic problems are evident. However, the processing essence is clear and production of colorless diamonds is possible - the matter depends on investments.

What is the prime cost of your basic products?

One-carat stones are the most mass-manufactured products of our company and their prime cost is around $100 or a bit more.

What is the dependence between the prime cost and the mass of a synthesized crystal?

The prime cost does not virtually depend on the mass of a synthesized crystal. The point is that the number of big stones is extremely small: in our case we have one 2.5-carat stone out of 1,000 stones. Such is the statistical straggling, whereas initial components are the same as well as energy consumption.

How much feasible is mass production of large gem-quality stones for instance 10 carats in weight?

I think that mass production of such gems is not feasible so far. If we look at our production, we would have to replace all the synthesis apparatus and all the accessories – this would be very expensive. It is possible to order two or three experimental installations and to get some five ten-carat stones in a month – just as an experiment. However, the only preparation to this experiment will cost millions. The larger is the synthesis cell the lower is the process stability. This is why in the case of mass production or large-series production stability is economically more important than exclusive sizes and exclusive quality.

Are the installations used at your enterprise manufactured in Belarus?

No, they were retrofitted in Belarus, while the “hardware” was made in Russia, mainly in Saint Petersburg.

Do you collaborate in some way with Russian enterprises engaged in synthesizing diamond mono crystals?

We are absolutely out of contact. It is even considered indecent for them to come to us and correspondingly the other way around. There is no competition in the usual sense because our ways never cross on the market. Probably, sometimes they see our stones and once in six months we hold their samples in our hands – one or two crystals. However, their market share is small compared to ours.

In what way do you evaluate the U.S. production organized with the help of you former colleagues? (Ten years ago the former Adamas BSU top executives immigrated to the United States and organized production of synthetic diamonds at Gemesis. – Editor’s note.)

I know for sure that two years ago they had 24 apparatus for synthesis. They worked on improved golden yellow hue, a sort of egg-yolk yellow hue, and were trying to increase the size and quality of stones and invested huge amounts of money into advertising all the way in the United States. I believe that precisely these efforts made certification of lab diamonds possible. They made the market accustomed to the idea that this was a decent and civilized kind of business. Our ways in the market do not cross and though they were reported to increase the number of their installations to 100 we have no actual proof to this effect; moreover, we know that some time ago they were seeking a buyer to sell their whole factory to.

Diamond market analysts are discussing a possibility of thoroughgoing expansion of De Beers in the gem-quality synthetic diamond market. Is it possible to establish a monopolistic framework in the synthetic diamond market similar to the one which was once set up in the natural diamond market? 

Some 90% of the synthetics market are represented by polycrystalline products and powders, not by mono crystals. Until recently, the Element Six Company (De Beers) mainly produced such abrasive materials. This is one of the pacesetting companies, but it is hardly possible to monopolize this market. I think that China has developed a fairly wide-scale production of diamond abrasives. Cheap workforce and a simple management structure are quite sufficient to let the Chinese compete in the filed of industrial diamonds. The fact that Element Six is switching over to mono crystals for the jewelry industry is certainly a new trend and it is difficult to tell what will happen to the synthetics market in this case. But if the techniques of natural diamond mining is comprehensible and does not contain any secret elements – be there something to mine, - the synthetic diamond production is quite another thing having its own know-how and secrets. Partially we got rid of secrecy, but it is preserved for the basic elements of processing techniques. This is a state secret. And by the way, this is one of the reasons for absence of workshop alliance in our business.

But what kind of secrets are we speaking of if the experts in processing techniques are in the United States?

The specific feature of any production of synthetic mono crystals is its singularity – the basic processing technique is inevitably modified by a whole range of changes and amendments selected empirically. It is possible to say that such production is unique. 

Who is the owner of patents for this processing technique?

The processing technique was developed in the USSR, in Novosibirsk, at the local branch of the Academy of Sciences. It was probably patented in the USSR. I don’t know the full picture of patent rights for this processing technique. However, in Belarus the diamond synthesis is patented.

Does you enterprise have its own cutting facility or do you cut you products in Gomel?

We have our own cutting workshop, but if there is a large-scale order and we are unable to cope with it we pass it over to Gomel for cutting.

Do you consider a possibility to attract strategic investors?

So far as secrecy is decreasing being left to narrow processing passages, our interest towards potential investors into production is growing. I do not exclude that even this year such matters may come up for specific discussion. We are also interested in cooperation with a large-scale dealer, which could buy one half of our products or maybe the whole output. And finally, we are interested in a potential partner in the jewelry segment.

Have you got any information pertaining to sales of synthetic diamonds, may be made by your company, under the guise of natural stones?

I heard about small companies in the post-Soviet area which practice a certain element of wiliness not mentioning on their price tags that diamonds they sell are synthetic. These companies are not our clients or partners. They get hold of insignificant number of stones passed over second or third hands – may be some twenty crystals a year. The future is not theirs for sure.

Is there any jewelry brand, which is working exclusively with synthetic diamonds?

No, there is not. There were some attempts to establish one, but currently such a brand does not exist on the market.