Some years ago, Carol Shriner of Marquette, Nebraska, was turned into a yellow diamond. Her family was one of the first customers of LifeGems, an American company turning cremated ashes into precious stones using advanced technology from GE.

Take a human body and reduce it to carbon in a crematorium. Take that carbon and turn it into a diamond. The price ranges from US$2,500 to US$14,000 or more for a full carat stone. Greg Herro, CEO of LifeGems reports that among the thousands already ‘diamondized’ are horses and cats. LifeGems has opened franchise operations in Europe as well as the US and plans for world-wide expansion are underway.

This is not the future that De Beers anticipated. First it was the global protests about human rights and child labour issues in the industry, then the emergence of artificial diamonds indistinguishable from their own, followed closely by the diamond discounters – and now this! De Beers is believed to be preparing a law suit for the “improper” use of the word ‘diamond’. This is hot on the heels of the protracted, but unsuccessful, attempts to discredit artificial diamonds. Next week’s press announcement by De Beers is eagerly awaited and promises to be the definitive statement on the company’s future strategy.

Carol’s daughter Christine still wears the yellow diamond, laser-etched with a unique id number, around her neck. “Mom’s beauty can be seen all the time now” says Christine.

Diamonds really are forever – but perhaps not from De Beers.

(Read the full story, and discover De Beers’ new strategic focus, in the detailed Analysis/Synthesis section – for subscribers only)

ANALYSIS >> SYNTHESIS: How this scenario came to be

The technologies to make a diamond:
In nature: thousands of years and a unique combination of natural circumstances of temperature and pressure for the world’s hardest material to form naturally.
In a factory: about 50 years ago, GE built huge ovens that could mimic the process to produce industrial quality diamonds to coat drill bits etc. In the late 1980’s GE took the technology further to produce ‘gem quality’ stones. Pressures in excess of a million pounds per square inch and temperatures of more than 2000 degrees Fahrenheit.
Several years ago, De Beers set up what it called the Gem Defensive Programme – a none-too-subtle campaign to warn jewellers and the public about the arrival of manufactured diamonds.
The sudden appearance of multi-carat, gem-quality synthetic diamonds in the past few years has sent De Beers scrambling. At no charge, the company is supplying gem labs with sophisticated machines designed to help distinguish man-made diamonds from mined stones.
Now it appears that even this may no longer be possible. In future, the only distinguishing characteristic may be that the manufactured diamonds are ‘better’ – they contain absolutely no impurities or flaws. What will consumers make of it? What will De Beers do next?

2003: Manufactured diamonds surprise the experts
Two start-up companies have developed techniques to manufacture stones that are ‘indistinguishable’ from the real thing. Stones that are regularly valued by experts at more than US$20,000 were actually manufactured for a few hundred dollars.
This is not cubic zirconium – these diamonds are the real thing – just made faster than in nature, and more cheaply.
“These stones will bankrupt the industry”, says Aron Weingarten, an Antwerp gem trader.
Another aspect of this kind of diamond production is that it would likely not be subject to the human rights and child labor issues that have plagued traditional diamond mining for the past decades. Even this year Amnesty International gave the diamond retail sector the thumbs down for their implementation of self-regulation to support the Kimberley Process, the international scheme launched to combat the trade in conflict diamonds.
Gemesis, the Florida-based company, and Apollo Diamond, in Boston, are start-ups that plan to disrupt the current diamond industry cartel and use the diamond jewellery business to finance their attempt to reshape the world of semiconductors.
Today’s speedy microprocessors run hot – at upwards of 200 degrees Fahrenheit. In fact, they can’t go much faster without failing. Diamond microchips, on the other hand, could handle much higher temperatures, allowing them to run at speeds that would liquefy ordinary silicon.
Apollo’s diamonds will also be ideal for nanotechnology and high performance biotech industrial applications. Their high purity Chemical Vapor Deposition (CVD) process enables monocrystal diamonds to be grown in large sizes for advanced industrial high performance applications including medical products, precision instruments, nano-machines and advanced optics.

2004: LifeGems launches into a suspicious US market
LifeGems’ new service adds new visibility to manufactured diamonds and establishes a global market for turning your loved one’s ashes into a permanent memory. Lifegems’ diamonds are made in factories in Florida, Russia and Eastern Europe.
While some people see this new service as somewhat macabre, market watchers are surprised by the unexpected high take-up and acceptance of these new diamonds.
The quality of manufactured diamonds continues to impress diamond dealers and customers as small niche markets explode for (previously) rare colored diamonds.

2005: Internet diamond sales hit new peak
Blue Diamond, the Internet Diamond Company, now sells as many diamonds as Tiffany, with US$154 million in sales during 2004. The company’s objective is to demystify the industry by telling you exactly what they’re selling you and how much it will cost.
They are bringing consumer openness into the diamond market as their competitive differentiation. It’s worked in the car industry so why not in diamonds?
Later in 2005 several ‘me-too’ competitors emerge who include manufactured diamonds in their product range. ‘Absolute purity – the way nature intended’ becomes the new watchword for these manufactured stones. Profit margins on these new branded stones are double those on mined diamonds and markets grow exponentially.

2006: De Beers goes on the offensive
To protect its dominant place in the traditional US$7 billion diamond industry and to participate in the new markets, De Beers seems to have gone on a retail offensive following on from its establishment of De Beers LV in 2001 (together with LVMH, Louis Vuitton Moët Hennessy, the world’s leading luxury goods company) and its entry into retailing with the establishment of in De Beers stores in London and Tokyo.

In February 2006 De Beers announces the acquisition of two leading US diamond manufacturing companies and a major shareholding in LVMH Moët Hennessy. The new De Beers global marketing organization announced at the same time points to a broad new business focus:

– De Beers Product Marketing: Embraces both natural and manufactured diamonds, with three new brands to be announced later – essentially ranging from “De Beers Premium” to “De Beers Lite”. These brands are said to include a youth brand developed together with FCUK and hip hop artist NanoZ. It is rumoured that De Beers are also planning to market exclusive diamonds manufactured in space. In addition, tie-ins to luxury goods receive massive investment focus.

– De Beers Semiconductors: A joint venture with Intel and IBM that will likely dominate the diamond microprocessor market and the nano-technology industry.

– De Beers Services: A wide new range of diamond-related services, from an on-line bridal registry and valuation services to “From Ashes to Eternity” – a service to turn your cremated loved ones into ‘personal diamonds’.

– De Beers Retail: A global network of stores and web sites to support the new branding, in association with Amazon.