In one end of a facility in Silicon Valley goes electricity—lots of it. Out the other, comes an armored truck stashed with diamonds.
In the middle are 8,000°F plasma reactors and more than $100 million in investment to power a startup that is on a mission to make ethical, sustainable diamonds in California.
For its potential to "disrupt" the $80 billion global diamond mining industry, Diamond Foundry has gotten a lot of attention since it launched to the public in 2015, partly because Leonardo DiCaprio, the star of the movie Blood Diamonds, is an investor. But for now the company is still small, churning out 2,000-karats a month and selling out online within two weeks (average price $6,200). The company, founded by former solar industry entrepreneurs, is now negotiating to have its first products sold by a major high-end retailer and work with top designers.
"When we started, it wasn’t clear whether we could master the technology, and then it wasn’t clear whether people would buy it," says cofounder Martin Roscheisen. "The technology turned out to be harder than we expected, and the market reaction has been easier."
Lab-made diamonds aren’t new. Since the 1950’s, they’ve been used in industrial applications, but they always had impurities that kept them out of the jewelry sector until recently. Only in the last five years, a few companies achieved the holy grail: colorless diamonds that could not be distinguished from the real thing. A handful of labs around the world have launched, including Pure Grown Diamonds in Singapore, Scio Diamonds in South Carolina, and New Diamond Technology in Russia.
The founding team began working on Diamond Foundry’s technology in 2013, shortly after their California company Nanosolar, which pioneered thin-film solar technology and raised $400 million, went bankrupt due to a flood of low-cost Chinese solar cells.
To create a man-made diamond that is indistinguishable from what you’d find at Tiffany’s, the team starts with a thin slice of a natural, mined diamond and grows it, atom by atom, in a super-hot plasma reactor. Roscheisen says Diamond Foundry, with its advanced tooling, has reduced the time it takes to grow a diamond and has a unique ability to scale up its operations compared to other players. "If our tooling weren’t as productive, it would be hard to make money," he says. (Energy ends up being its biggest ongoing expense and input, which makes locating in the U.S.—where power is relatively cheap—an advantage this time rather than a downside, he says.)
Right now, the largest diamond the company can make is 10 karats, rough, or 2.7 karats polished, but it’s working to grow larger stones and expanding production. It is aiming to ship "several billion dollars'" worth of diamonds in the next few years.
Today, Diamond Foundry is appealing to ethical-minded shoppers. Conflict-free diamonds do exist, but the verification process has a lot of loopholes, and it’s hard to be sure you’re not complicit in human rights violations when you buy (unless maybe you buy Canadian-mined diamonds). Roscheisen says he thinks that if man-made diamonds can one day present a real challenge to the broader industry, which is dominated by a few giants like DeBeers, it will enable improvements across the board. Still, according to a piece in Racked, lab-made diamonds overall only make up 1% of the diamond market—and prices for mined diamonds are going down.
"There’s very good people in mining as well. They know what the issues are—and through a little bit of competition from us, they also know what to do, and they will be working on ensuring true traceability," he says. "It’s a positive outcome if the industry at large can get better."
Diamonds made in California, however, aren’t benefiting African economies—where most diamonds are mined, or Indian economies, where most diamonds are cut. But Roscheisen notes his company is resuscitating high-skilled labor in the U.S. The tens of thousands of jobs in diamond cutting here have long ago moved overseas, but Diamond Foundry offers couples the option to design their own custom cuts and is starting to hire some skilled labor back. Its master cutter is Maarten de Witte, a former director of the American School of Diamond Cutting.
It’s unclear what impact synthetic diamonds will have on the industry. Existing mines are said to be running low on supply, so grown diamonds could begin to make up much more of the market. For now, though, diamond-makers are fighting back. The Diamond Producers’ Association new slogan seems explicitly aimed at companies like Diamond Foundry (even though they say it is not): "Real is rare."
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