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Technology vs monopoly. Market review of lab-grown gem quality diamonds. Part 2. Midstream*

15 july 2020

Authors: Valery ZAKHAROV, Galina PLATONOVA, Ultra C Company

* Midstream includes cutting diamonds and making jewellery. The first part of the article is in the column Expert Reports dated May 11, 2020

(«Навигатор ювелирной торговли») - Lab-grown diamonds are a high-tech product that quickly captures the jewellery market. The opportunities they provide today are unique. These are diamonds of various hues of yellow, blue, pink, red or a variation of green and brown colours. They provide an opportunity for manufacturers to order sets of stones that are perfectly calibrated in size, shape, colour and optical properties. And, of course, at various the price! The technological advances make luxury stones more affordable.

The Ultra C experts unveiled more details about all this and other things in the second part of the Market review of lab-grown gem quality diamonds.

We continue to review the lab-grown diamond market and move from the production to the midstream - a cutting and polishing industry and rough and polished diamond dealers. The market for natural diamonds formed against the backdrop of monopoly, then oligopoly, and created a marketing system based on the supply of diamonds from their producer to sightholders, and then further along the ‘diamond pipeline’ to smaller dealers and cutters.

The classic ‘diamond pipeline’ (naturally mined diamonds), practically, has no vertically integrated companies engaged simultaneously in all market segments, from mining to retail. The lab-grown stones (we defined them as a ‘disruptive technology’) have changed the existing system. Now, many diamond growers do their best to cut and polish as much of their own grown diamonds as possible and then sell the polished diamonds, but so far, they have to sell some of the goods as rough diamonds to maintain their liquidity. The Indian companies mostly are full-cycle ones, from the synthesis to the jewellery manufacture and sale under their own brand (New Diamond Era, ALTR and others).

India is the centre of the global cutting and polishing industry

Nowadays, a significant part of rough and polished diamond dealers participate in the turnover of both natural and lab-grown stones. The main supplier of rough diamonds to the market is China. Local producers cut only a small part of their own products. Small-sized roughs making up a significant part of China's products, are cut and polished at the Indian enterprises specializing in cutting and polishing this size category. Thus, in India, all the locally produced rough diamonds are cut as well as most of the Chinese roughs, and partly the products by diamond growers from other regions.

Diamond manufacturing cost

The price range for cutting and polishing in Surat starts from about $30 per carat of rough stones (2-3 grainers). Cutting larger crystals costs more, from $40 to $80 per carat depending on the cut requirements and the rough sizes. In small size category (while screening, 200 polished diamonds per carat, and smaller stones), the cost of the cutters’ work is formed differently and is based on labour costs per crystal. This is approximately $0.5-$1.0 per cut and polished stone. Thus, in the cost of the smallest polished diamonds (400 polished diamonds per carat), the cut will cost approximately $300 per carat (labour costs only). In small sizes, the cost of cutting makes up the bulk of the polished diamond cost. This applies to both grown and mined crystals, so in these size categories, the difference in prices for the two products is minimal.

At present, India accounts for more than 85% of the global cutting and polishing market by weight of the roughs cut and polished, which roughly reflects the situation in the natural diamond market, too. In the midst of extreme leverage of the most polishing units in India, cutters willingly cut and polish grown diamonds to maximize the utilization of their production capacities and accelerate the turnover, which allows refinancing their existing financial debts. According to a survey of cutting and polishing units, more than 30% of those who traditionally worked with natural diamonds began to take grown diamonds for cutting. According to forecasts, over the next five years, their number will double.

Most of India's cutting and polishing units are located in Gujarat. The world cutting and polishing centre is the Surat County, with Surat as the capital with the population of more than 5 mn people. And also, there is a recently formed, but rapidly growing cluster with its centre in the city of Bhavnagar located on the other shore (from Surat) of the Gulf of Cambay (Khambhat). India's leadership in the industry is largely explained by the low labour cost in these regions in addition to rich historical traditions.

Lab-grown diamond cutting and polishing

Cutting and polishing the lab-grown diamonds has no fundamental differences from cutting and polishing the natural ones, but nevertheless, it has its own features that are primarily based on their morphological properties. Unlike the mined diamonds characterized by a variety of crystallographic forms (Russian GOST provides 13 basic terminological groups for a shape), the situation looks different for the lab-grown crystals. In fact, there are two standard forms - cuboctahedron and cube.

The Ultra C company purchased roughs from more than 10 diamond growers and carried out their cutting and polishing. The yield numbers given below are based on an experiment data.


As a rule, the HPHT diamond crystals are of a cuboctahedral shape (Figure 1).

Figure 1. Single crystals of HPHT diamonds. In the photo, the seeds are clearly visible in the crystals, produced in China, 2018.


For such crystals, the cutting and polishing process is generally the same as for an octahedron. However, there is also an octahedron shape (Figure 3) that can be grown on octahedral facets, if necessary (Figure 2).

Figure 2. A high pressure cell after the synthesis with octahedral crystals.


Figure 3. The octahedral form of the HPHT single crystal.


Thus, the optimal yield suitable for the HPHT crystals is obtained when cutting the ‘rounds’ and ‘cushions’. The manufacture of other fancy cuts results in significant loss of the original crystal weight. The optimal yield for the ‘round’ cut HPHT diamonds obtained experimentally was over 40%; for a ‘cushion’ cut, it was 50%, for a ‘pear’ cut - less than 30%, and for a ‘marquise’ one it barely reached 20%. The above yield data corresponds to high quality rough stones; for diamonds with a large number of inclusions, cracks, and other defects and those having a flattened shape, the yields can be significantly lower.

The colours of the HPHT diamonds can vary from D to the lowest quality. High colours are mainly obtained by the European manufacturers, while G-H-I colours prevail in diamonds grown by the Chinese, as a rule. There are often rough lab-diamonds of Chinese origin that give blue and greenish hues in the polished lab-diamonds.

The clarity can also vary from VVS to ‘pique’, mainly the diamonds are VS-SI. Characteristic defects of the HPHT diamonds are elongated needle-shaped metal inclusions, which can be quite long, but thin. Sometimes such a ‘needle’ has to be left open, coming to the surface, not to sacrifice the stone mass.


CVD diamond crystals grow in layers on a seed. A specially prepared seed (substrate), as a rule, is square, which determines the shape of the future crystal. During the synthesis in a growth chamber, the CVD diamond begins to overgrow with a polycrystal at a certain stage. When removed from the chamber, such crystals have a cubic shape and are covered with a black opaque very hard ‘crust’ of overgrown small diamonds. In Figure 4, a polycrystalline ’coat’ enveloping the sample is clearly visible.

Figure 4. A 9.73-ct CVD diamond, produced in China, 2018.


When purchasing rough stones, an unremoved polycrystal makes it difficult to assess the purity of the future polished diamond since the possible presence of deep ingrowths is not visible. As for clarity, the CVD crystals can vary over a wide range, from VVS to ‘pique’. Typical defects are non-crystallized carbon inclusions.

Removing the polycrystal required when working with the CVD diamonds creates additional difficulties due to its extremely high abrasive properties and requires cutter’s special skills. The polycrystal can be cut off by laser or by disk machining. The method of removing the polycrystal is determined by a planner and a cutter and depends on the nature of the tension in the place where the polycrystal grows. The shape of the CVD diamonds determines certain shapes of future diamonds, for example, princess, radiant, cushion, Asscher cuts. When making a round diamond from a CVD rough diamond, small fragments remain (since corners are cut off), which can be cut to obtain ‘small sieve’ diamonds. The experimentally obtained yield (initial weight including polycrystal) optimal for the CVD crystals to make a round cut reached 30%, for a cushion cut it reached 35%, for a pear it was slightly above 25%.

It is worth pointing out the formation of a new approach to cutting lab-grown stones. The historical approach to the cutting of natural diamonds was based on the principle of maximum yield from available rough stones. Therefore, it was problematic to collect stones similar in shape, colour, and optical characteristics for one jewellery piece, and this required additional costs. Today, more and more diamond growers offer calibrated polished diamonds to the jewellery market. Of course, the yield of such goods suitable for a parcel is definitely a bit lower but the liquidity and price increase.

Grown diamond colour

The CVD diamonds without a post-growth treatment typically have a colour no better than H. The diamonds obtained from the rough stones grown by some manufacturers may sometimes have a light pinkish hue. Some of these stones are sold ‘as grown’ (as they were grown), the other ones undergo post-growth treatment.

Post-growth treatment is carried out for two main purposes - to improve the colour of near-colourless crystals (usually by 1-3 grades) and obtain fancy coloured diamonds.

Up-to-date technologies of the diamond post-growth treatment, including irradiation with high-energy particles (mostly with electrons) in combination with annealing in the diamond stability zone (HPHT annealing) or in the graphite stability zone (UHT, APHT, LPHT annealing), or without this, taking into account the diamond production method, the content of atomic impurities make it possible to obtain rough and polished diamonds of unique fancy colours - light blue/dark blue, pink/red, yellow/green.

The colour of diamonds depends on two main factors - the presence of atoms of the elements such as boron, nitrogen, nickel, and others in the crystalline lattice, and intrinsic defects of the lattice, for example, vacancies or plastic deformations.

Nitrogen atoms give a diamond yellow hues, from saturated (single nitrogen) to light (grouped nitrogen atoms). Very low boron content in a diamond makes its light blue and dark blue. Yellow and dark blue lab-grown diamonds, as a rule, have this colour from their origin, since nitrogen and boron are added directly during the growth process. Thus, they are not post-growth treated additionally. New Diamond Technology is an established leader in growing the coloured dark blue and yellow diamonds, its stones are shown in the photo.


Pink and red hues of diamonds are the result of plastic deformations. A series of sequential exposures to obtain structural changes is carried out in the laboratory to have the desired hues. The problem of obtaining beautiful pink and red colours of the desired saturation (not very dark) has not yet been fully resolved, however, some Russian companies are close to solving it. 



The monopolistic-and-oligopolistic market for natural diamonds is able to control both the price of rough diamonds and the margin of the cutting and polishing sector to some extent. The entry of the lab-grown diamonds has attracted many cutters for two reasons - due to an access to rough diamonds and higher margins. That is why some companies invested in the equipment for growing diamonds and set up vertically integrated structures.

The technology allows to obtain polished diamonds from 0.8 mm to 5-6 carats (a small number record stones at the moment can be above 10 carats). The yield data presented gives an explanation of why the lab-grown diamonds of certain cuts are sold at a lower discount compared to the Rapport prices, as well as the calibrated stones; it is due to the large loss of stone mass due to the morphological structure.

The technology gives jewellers new opportunities to obtain calibrated stones of any fancy shape and selected by colour, size, and optical characteristics. Such goods gain the popularity rapidly. Today, the demand exceeds the supply. Until recently, coloured diamonds have been used for the exclusive jewellery only. However, they open up new horizons for creativity in designing jewellery at an affordable price today.