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DISRUPTIVE TECHNOLOGY
From Site Selection magazine, July 2019
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A New Day for Diamonds

Lab-created gems are shaking up the jewelry market.

DISRUPTIVE TECHNOLOGY
Emerging diamond technology produces in weeks what nature needs eons to do.
Source: Lightbox

by GARY DAUGHTERS

To re-phrase a well-known marketing message, diamonds take forever.

Formed under extreme pressure and high temperatures deep inside the Earth and delivered toward the surface by volcanic eruptions, conventional diamonds are typically more than a billion years old.

Now, machines can do the job in under three weeks.

They are not “fake,” either. Synthetic diamonds grown in laboratories have the same chemical properties as natural diamonds. Long employed for heavy, industrialized purposes and more recently used in goods such as flat screens, medical equipment and solar panels, lab-grown diamonds are set to disrupt the jewelry market by offering a nearly boundless supply of stones at prices a fraction of what natural diamonds cost.

“The interest in this has just exploded over the past few years,” says Paul Ziminsky, an independent diamond analyst and consultant based in New York.

Perhaps the surest sign yet that lab-grown diamond jewelry is catching on is a 60,000-sq.-ft. (5,600-sq.-m.) synthetic diamond factory soon to open in the Portland suburb of Gresham, Oregon. What pops out is the name: De Beers. The world’s largest producer of diamond jewelry, De Beers had long resisted entry into synthetics, fearful of cutting into its own brand. But times have changed, and so has the market.

“We see an opportunity that’s been missed,” says De Beers Chief Executive Bruce Cleaver. “Affordable fashion jewelry may not be forever, but it’s perfect for right now.”

Only in the last five years have synthetic diamond producers begun to create stones of sufficient aesthetic appeal to compete with natural diamonds. With jewel makers having adopted technology developed by the solar industry, the quality of lab-grown diamonds has progressed to the point where even gemologists, using the naked eye, can’t always distinguish what’s synthetic from what’s natural.

Lab-created diamond production for use in jewelry, says Ziminsky, now exceeds 1.5 million carats annually. He predicts that the synthetic diamond jewelry market, now an estimated $1.9 billion, will grow at 22% annually to $5.2 billion by 2023 and to $14.9 billion by 2035.

Presently, there are two popular methods of growing synthetic diamonds. High Pressure, High Temperature (HPTH) is a process used for decades to manufacture diamonds for industrial use, which still account for 99% of the worldwide synthetic market. Used primarily in China, HPTH simulates the brutal force of subterranean Earth by applying searingly high temperatures and high pressure to dissolve carbon into a diamond seed.

More recently, synthetic diamond makers have adopted a newer process called Chemical Vapor Distribution (CVD). Akin to 3D printing, CVD layers carbon on the diamond seed in a vacuum chamber. Increasingly favored for use in the jewelry market, CVD is easier to control and monitor than HPTH. It also requires less heat (6,000 degrees Fahrenheit) than HPTP, which employs temperatures comparable to the outer layer of the sun.

“What’s interesting about the CVD method,” Ziminisky says, “is that it was largely developed by the solar industry, which invested heavily in it to produce polysilicon for solar panels. The LED light bulb industry also spent a lot of money advancing that technology for light bulb production.”


“… it’s an industry that can eventually be worth in the hundreds of billions of dollars.”
— Paul Ziminsky, Independent Diamond Analyst

Ziminisky says that as CVD technology improves, industrial uses for lab-grown diamonds are likely to grow more exotic.

“The new frontier,” he says, “is going to be producing very high-quality diamonds that can be used for laser equipment, processing chips, quantum-computing components and nuclear batteries. We’re not there yet because companies can’t produce those higher quality diamonds at a low enough price for high-tech industrial uses, but that’s CVD’s longer-term goal. So, it’s an industry that can eventually be worth in the hundreds of billions of dollars.”

De Beers says it will invest $94 million over four years to develop the Portland-area facility, which is expected to reach its full output potential of 500,000 carats a year in 2020. Element Six Technologies, an Oxford, England-based synthetic diamond technology company owned by De Beers, is to manufacture gems at the plant exclusively for De Beers’ new fashion-jewelry brand, Lightbox.

The synthetic gems will sell for $200 for a quarter-carat stone and $800 for a one-carat version, says Element Six. Natural diamonds, by contrast, generally cost more than $5,000 per carat.

Oddly enough, De Beers has dismissed the distinctiveness of its own new products. The company said it would not grade its lab-grown diamonds because “we don’t think they deserve to be graded.” Industry analysts say such sentiments reflect the company’s wider interest in protecting the natural diamond market, where it dominates. Last year, De Beers generated more than $6 billion in revenue for its parent company, Anglo American.

“De Beers,” says Ziminisky, “has long been one of the front-runners with synthetic technology, but they never really used it to make diamonds for jewelry because they didn’t want to directly compete with the natural diamond industry. But I think the development of some of the other companies has progressed enough where they wanted to get in the game and use their marketing and distribution power to try to steer the public perception of what man-made diamonds are. They don’t necessarily see this as a significant revenue contributor for the company. Maybe at some point they will, but I think this is more of a strategic marketing position ploy at this point.”

De Beers says its manufacturing process is extremely energy intensive, which made the relatively low electricity costs typical of the Upper Northwest a major factor in choosing the Portland area for the new factory.

Steve Coe, Element Six’s chief operating officer, told The New York Times that, “Given the pressure required to create lab-grown diamonds, it’s akin to the Eiffel Tower being stacked on a can of Coke. If you look at the detailed numbers, the energy consumption levels between natural and man-made diamonds are in the same ballpark.”

The Element Six facility is being constructed in the Gresham Vista Business Park, inside an Enterprise Zone that offers a five-year property tax abatement on new investment. Owned by the Port of Portland, the park is located next to an ON Semiconductor campus less than a mile from I-84. Other park tenants include Subaru, which recently located its master distribution center of auto parts logistics there.

“Element Six is a wonderful addition to the region’s portfolio of international brands,” says Janet La Bar, president and CEO of Greater Portland, Inc. “This foreign direct investment from the UK further cements Greater Portland’s reputation for advanced manufacturing capabilities, bringing quality jobs and global attention to our partners in Gresham and the Port of Portland.”

Feeding the Planet

Jerry Feitelson wants to help save the world. And, yes, make some earthly bucks in the process.

By now, you’ve probably heard the inconvenient forecast. The United Nations estimates that by 2050, the world population will reach 9.1 billion, an increase of more than one-third, necessitating 70% more global food production. Feitelson, co-founder and CEO of San Diego-based Agribody Technologies, Inc (ATI), takes the UN forecast as a personal and professional challenge.     

Sea Kit
The first commercial sea-crossing of an unmanned boat delivered a box of oysters.
Source: SEA-KIT

“It’s why I’m so passionate,” Feitelson says. “We need to leverage every sustainable technique we can to improve food yields. I don’t see too many ways to do it outside of using the most modern breeding technologies that we have available.”

For ATI, it all begins with seeds. Feitelson, with degrees from MIT and Stanford in molecular genetics, says he can tweak two specific genes present in all plant species, resulting in higher crop yields of up to 45%, enhanced stress and disease tolerance, and two to three times longer shelf life.

“Increased shelf life is really important for a number of reasons,” Feitelson says. “We now lose about 70% of our vegetables and fruits to waste in the field, during transport and in the home. If we can triple shelf life without changing nutrition or taste, that would not only increase the value of those products, but of course it would aid the food supply. Reducing food waste is so important because as high as 3% to 4% of greenhouse gas emissions come from rotting food.”

ATI’s patented technology sprang from a 2001 discovery by Feitelson’s eventual co-founder, Prof. John Thompson of Canada at his lab in Waterloo. The original proof of concept involved transgenic methods of inserting foreign genetic material into plant cells. Two years of replicated field trials in alfalfa gave unprecedented 20%-45% yield increases with no loss of quality, Feitelson says.

Scooping up the 15 associated U.S.-issued patents, Feitelson theorized that he could achieve the same results through the newer technique of genome editing, which he confirmed last December in rice and canola with the filing of a broad utility patent. Not only cheaper than transgenic techniques, genome editing also is non-GMO, meaning less government regulation and quicker speed to market. It also avoids no small amount of stigma.

“When you make a small mutation without any foreign DNA, it’s indistinguishable from what could naturally occur,” Feitelson says. “We’re particularly excited about the positive impacts on public perception.

“GMO technology,” says Feitelson, “has largely been under the purview of the biggest agricultural-chemical companies because they’re the only ones that can afford it. And generally, it’s only been applied to the biggest row crops. Since genome editing is so relatively inexpensive and fast, it allows small- to midsize companies like us and dozens of others to release products on the market in many specialty crops that are really good for humanity. It democratizes crop improvement. That’s why I started this company.”

ATI projects revenues of $320,000 in 2019, climbing to $30.6 million in 2024. It says its 13 targeted crops, which include corn, soy, wheat, canola and flowers, represent a market value of $13 billion. The company doesn’t directly sell seed to farmers but, instead, generates revenues through licensing agreements and co-development partnerships with agriculture companies. ATI has inked deals with St. Louis-based Benson Hill, J.R. Simplot, Tropic Biosciences, Sustainable Oils, TWR, Stark-Ayers and Intrexon, among others.

“Our exit will not be an IPO,” Feitelson says, “I think that’s unrealistic. But I expect that we’ll be purchased at a good price by one of our customers. So, every time we do a deal, in addition to the revenue and the credibility, we get a potential acquirer.”

Autonomy on the Water

A box of native oysters from the east coast of England arrived May 7 at the Dutch port of Oostende. The Mersea Island mollusks had crossed the North Sea on a boat called USV Maxliner, operated by Britain’s SEA-KIT International. The unmanned vessel was guided remotely from an onshore control room in Essex, making it the first-known commercial sea crossing without a crew on board. Maxliner returned to Britain with a consignment of Belgian beer. Traveling at about four knots, the boat navigated each leg of the 83-mile (134-km) journey in 22 hours.

Some day in the future, virtually every transportation machine will steer itself. While autonomous cars still could be decades away, unmanned watercraft, both autonomous and remotely controlled, have emerged on the near horizon. Yara Birkeland, an autonomous container ship developed by Norway’s Kongsberg, is set to make chemical deliveries beginning next year between the Norwegian ports of Brevik and Larvik.

Developers say that, as transport vessels, automated ships will reduce the risk of accidents with the potential of saving staggering amounts of money, beginning with eliminating labor costs. In addition, removing human support systems such as living quarters would yield sizable weight reduction and free up additional cargo space; at a mere 40 ft. (12 m.) long, the unmanned Maxliner is built to carry up to 2.5 tons.


“We now lose about 70% of our vegetables and fruits to waste …”
— Jerry Feitelson, Co-Founder and CEO, Agribody Technologies, Inc.

Designed and built in Britain, Maxliner was initially developed to find new ways to map the sea floor. In addition to transportation, it could serve other uses.

“It’s a fundamentally versatile model,” says Ben Simpson, SEA-KIT’s managing director. “It’s potential lies in its ability to be adapted to a range of tasks, whether it be transit, hydrographic surveys, environmental missions or marine safety and security. We’re tremendously excited to push the technology to its limits and see what we can achieve.”

The defense industry is deeply involved in the development of autonomous vessels. Seagull, a multi-role unmanned surface vessel (USV) manufactured by Israel’s Elbit Systems of Haifa, is being outfitted now with mini torpedoes, manufactured by Italian contractor Leonardo. Unveiled in 2016, Seagull is capable of conducting mine counter-measures, anti-submarine warfare (ASW), maritime security and hydrography.

In February, the Israeli Navy deployed Seagull in an ASW exercise that included lowering a sub-hunting sonar device initially designed for helicopters, but recently retrofitted to be dropped into the water from the surface. Elbit says Seagull minimizes risk to human life and can lead to significantly lower operating costs.

Gary Daughters
Senior Editor

Gary Daughters

Gary Daughters is a Peabody Award winning journalist who began with Site Selection in 2016. Gary has worked as a writer and producer for CNN covering US politics and international affairs. His work has included lengthy stints in Washington, DC and western Europe. Gary is a 1981 graduate of the University of Georgia, where he majored in Journalism and Mass Communications. He lives in Atlanta with his teenage daughter, and in his spare time plays guitar, teaches golf and mentors young people.

 




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