Dawn Bennett, Host of Financial Myth Busting, Interviews T.J. Walker of Pure Grown Diamonds

Washington, DC -- (ReleaseWire) -- 06/10/2016 -- DAWN BENNETT: T.J. Walker is from the Pure Grown Diamonds company, which manufactures lab grown gem quality diamonds. Let me just start with a little background on these lab grown diamonds. I am fascinated by it and typically I don't have an interview like this, but there is a lot of global demand for diamonds, thanks in part to the growing middle class in countries such as India and China. It's been a decade since a large diamond mine has been discovered and studies say that by 2019, demand for diamonds is projected to outstrip supply by almost 5 to 6 percent. Luckily, pure grown diamonds can be made in the lab. Diamonds of course are known as one of the hardest known materials. But what's fascinating to me, they can withstand high levels of radiation and it doesn't trigger an immune response, which make them useful in construction, nuclear engineering and medicine. As much as to the naked eye these lab grown diamonds are indistinguishable from natural ones, I still wonder if they are going to be a tough sell for jewelry because they are seen as inauthentic, even though they are identical. That's where I want to start today. TJ, welcome to Financial Myth Busting.

TJ WALKER: Great to be with you. Thanks for having me.

BENNETT: Your company, Pure Grown Diamonds, has invented a way to manufacture diamonds that mimics exactly the way they're created in nature. For those of us who haven't read about how diamonds are created, can you give us a quick refresher on the process?

WALKER: Sure. You start with a diamond seeds made of pure carbon. It's put in a greenhouse. It then grows for 9 to 12 weeks. It comes out, it looks like you would find any other diamond in the ground, which is not particularly pretty. You then cut the diamond, you polish it, you mount it and sell it. It takes about nine months, from concept until the consumer can be wearing it on a finger or an ear. Let me address the issue you brought up right off the bat, as far as whether it's equally as desirable. If someone gives you a beautiful collection of roses or lilies, can you necessarily tell if it was grown in a greenhouse or in their backyard? Or would you even care, necessarily, if they're beautiful and they're real? That's the issue. So when it comes to lab-grown diamonds, it's important for people to realize these are genuine diamonds, these are type 2A diamonds, the highest quality of all diamonds.

BENNETT: If you watch the auction houses; at Christie's and Sotheby's, they auction off precious gems, and I do follow that, just from an investment perspective. I don't recall ever having seen any lab-created diamonds, although I do know they're objectively identical. Why is that?

WALKER: Well, lab-grown diamonds have been around since the 1940s; GE actually created it for industrial use. It's only been available for just a few years now, when it comes to the jewelry grade diamond, these type 2A diamonds.

BENNETT: Right.

WALKER: So my guess is it's just too early in the life-cycle, and that's why. I would stress the main reason I think someone wouldn't want to get this, if they're looking at finances, is the lab-grown diamonds and true grown diamonds, in particular, are typically 30% to 40% less expensive than mined diamonds. So if you're getting, say, a one carat engagement ring that typically would be $5,000 for a mined diamond, a lab-grown diamond is more like $3,000, so you've got a couple of thousand dollars more for a wedding, a honeymoon, down payment on a car, other expenses. So that's one of the three big attractions to a lab-grown diamond. Another, specifically, it's eco-grown. There's just so much less of an impact on the environment in a lab-grown diamond from a mined diamond. International consulting firm Frost and Sullivan has concluded that there's only one-seventh of the impact on the environment from a lab-grown diamond. Because a mined diamond, you've got mining, you've got moving around all the dirt, you've got the water pollution, air pollution. The third big reason why many people are attracted to lab-grown diamonds, there's the social element of all of this, because you don't have problems with conflict diamonds. Don't listen to me; go to Amnesty International's website and look at what they have to say about mined diamonds. It's going to support tyrants, civil wars, you're supporting child labor in the Philippine's, you've got 11 year olds diving 80 feet underwater with a little hose in their mouth, having to dig in, you know, dark muddy water for diamonds. It's just not a pretty process, if you really look at how people are treated in the mined diamond process. You don't have those issues when it comes to lab-grown. So that's why a lot of people, especially younger people, millennials these days, actually prefer a lab-grown diamond, because it's much better for the environment and it's much better for people.

BENNETT: Is there a stigma to diamonds that aren't discovered somewhere deep in a mine in Africa?

WALKER: Depends on your perspective. In some people's eyes, there would be a stigma on a diamond that has a legacy of support a tyrant, rebel war, child laborers. It all depends on what your values are. And in some, there's a stigma attached to a product that is causing a lot of environmental problems. So it all depends on what your values are.

BENNETT: Do people really consider these to be "real" diamonds?

WALKER: Well, but let's be careful here; again, these diamonds are 99.95% pure carbon, 99.9% devoid of nitrogen. They come in brilliant, brilliant emerald princess cuts. They come in fancy pink, bright yellow, colorless or white. So these are not just like any other diamond; these are like-- these are the top 2%, these are type 2A diamonds. So when you think of the diamonds that are most celebrated in popular culture, the Elizabeth Taylor diamond, others, those are type 2A diamonds, those are the most beautiful and the rarest, and that's what the lab-grown diamonds are.

BENNETT: How is De Beers, for example—the name everyone thinks of when they think of harvesting diamonds—responding to lab-grown diamonds? Have they attacked the process, or are they also working on growing them as well?

WALKER: Well, you'd have to talk to them; I'm not an expert on what they do. I can tell you at Pure Grown Diamonds, we're just focused on creating the most beautiful diamonds at the best cost for our customers. And the whole industry is seeing an increase in demand. As you mentioned in the prologue, demand is up worldwide. You've got hundreds of millions of people in India and China entering the middle class, and they want the same things they see Americans having. You know, they see Jennifer Anniston getting a diamond ring in a rom-com movie, that's what they want. So there's only more and more demand for diamonds of all persuasions worldwide, and as you mentioned, the diamond mines, many of them are reaching depletion. So it's kind of a good time to be in this business.

BENNETT: In my understanding, from a scientific point of view, an engineering point of view, they have unsurpassed thermal conductivity, which makes them an ideal heat sink for electronics, which means the future for this, that you can continue to grow them, must be tremendous. I mean, eventually the semi-conductor industry's going to go crazy for you.

WALKER: Well, as I mentioned, this process was created in the 1940s by General Electric, so industrial grade diamonds have been around a long time and are in use in a lot of those situations. I'm not an expert on all that; all I can tell you is in just the last handful of years, the system has been perfected to the point where the type 2A diamonds, the really highest quality, gem quality diamonds can now be created affordably, and that's what we're offering to the public, and that's where we're seeing a lot of excitement, frankly.

BENNETT: How difficult is the process of growing diamonds in a lab? Do you get paid for the time-consuming process? And are they being mass-produced, or is it one at a time?

WALKER: These are one at a time. It's not as simple as just buying a bunch of microwaves and pushing a button and everything coming out exactly the same size. It's a very capital-intensive process, and it's not a simple or inexpensive process to get involved with. So that's why you're not going to see little machines in the back of jewelry stores making diamonds. It is not that simple. It's complex, it is expensive, there is a lot of technology involved. And that's why we feel very good about the pure grown process, and why we're seeing it increase in interest and demand from consumers and jewelry stores all over the country.

BENNETT: Can this process be easily replicated by other companies? Have you seen competitors pop up? Even if Pure Grown Diamonds isn't planning on plotting the market, can you prevent other companies from entering the marketplace and creating a similar production process?

WALKER: Well, the beauty of capitalism is no one can ever truly prevent other companies from trying to enter a marketplace. All I can tell you is it is a very expensive process. There's a lot of infrastructure and capital involved; it's not an easy business to enter. And we have a lot of patents and proprietary technology. There are a few other companies in the market; I'm not an expert on those. But I think the bigger picture is we are going to see lab-grown diamonds increasingly be a part of the marketplace, and a certain percentage of the public is actually going to prefer them, because, I mean, we're seeing this in Hollywood already; a lot of stars have in previous decades said, 'I don't want a diamond,' because they associate that with bad for the environment, blood diamonds. You get the whole, you know, Leonardo DiCaprio movie thing that turned people off.

BENNETT: Right.

WALKER: And now you've got a solution. People really like not just the beauty of a lab-grown diamond; they like the story behind it. They like the fact that their partner or their loved one had a diamond essentially created for them. They know where it came from, they know exactly what the impact on the environment was. It was created in a safe and worker-friendly laboratory in Singapore. And they like the fact that no child labor was involved, no money was used to support a dictator in some country. So people are actually drawn to that.

BENNETT: Some religions, some spiritual practices, like Hinduism, believe that the stones, the precious stones that come out of earth, bring some type of energy with them. It's part of several Asian belief systems. Have you heard anything about that on Singapore?

WALKER: Well, I personally am based in New York, so you've got me on that one. But again, I would point out that these are made from carbon, you know, so depending on how you look at it, this is genuine. This is not plastic made to look like something else, this is not synthesizing plastic to turn it into something visually that tricks your eye. This is 99.95% pure carbon, 99.9% devoid of nitrogen. That's what any diamond is, any type 2A diamond is, regardless of whether it comes from a mine or a lab.

BENNETT: When a jeweler looks at a 2A diamond out of the earth and one that came from your lab, how can he tell the difference?

WALKER: They cannot tell, except for one identifier, which we put on. We feel so proud of our diamonds that we want people to know that they're getting what we think is frankly superior, because of those other issues. We actually put an inscription below the girdle, and it says LG, which stands for lab-grown, and an identification number. Now, this is not visible to the naked eye; you have to put one of those so-called loops, those little magnifying glasses and look at it just the right way. And that's the only way you can tell. Other than that, no matter how experienced the jeweler is, they cannot tell, regardless of the magnifying glass that they're using. And I will confess to you, I have held up a loop, looking for the girdle with the number; I personally couldn't find it at all, so it's definitely not something that anyone can spot on a finger two feet away or anything like that. I couldn't even find it when actively looking for it. But my understanding is any jeweler knows exactly how to look and where.

BENNETT: Thank you, T.J.

For over a quarter century, Dawn Bennett has been successfully guiding clients through the complexities of wealth management. Her unique vision and insight into market trends makes Bennett a much sought after expert resource with regular appearances on Fox News Channel, CNBC, Bloomberg TV, and MSNBC as well as being featured in Business Week, Fortune, The NY Times, The NY Sun, Washington Business Journal in addition to her highly regarded weekly talk radio program - Financial Mythbusting. Through prudent and thoughtful advice, Dawn Bennett has strived to consistently provide the highest quality of guidance.

About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com.

She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.

She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett.

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