Nov 172014
 

On many diamond reports you will see a clarity characteristic of natural, or indented natural.  A natural is part of the rough diamond skin, where it was not polished.  Often they are confused as chips or damage to the diamond but they do look different than a chip.  See this post for photos of rough diamonds.

Natural on girdle edge

Natural on girdle edge

Normally they are along the girdle of the diamond.  You will often find a diamond with a couple of naturals on opposite sides of the diamond, it is a sign that the cutter took the minimum amount of size off the diamond.

Natural on extremely thick girdle

Here is a trigon, on a diamond facet – but not along the girdle edge.  This is a much more rare type of natural, trigons do form on a lot of diamonds but they are not usually left on a polished stone.

Diamond Trigon

Nov 152014
 

There is a battle going on in the diamond world these days.  People outside the industry will never hear about it of course, it is strictly at the trade level.  Let me give you a real high level overview of what has been going on.

The Diamond Battles

1) EGL International has been over grading diamonds for years.  So far over graded that their reports are simply fraudulent.  See an example in an article on diamonds2cash.com where they have a breakdown of a 4.10ct diamond with a GIA report and EGL International report.  Disgusting results.

2) EGL USA does not have the best reputation amongst the diamond industry.  Maybe because of the way they have graded in the past, or their association with EGL International, but they do leave a bad taste in people’s mouths in the industry.

3) Rapaport decided a few months ago they were not going to allow any EGL reports to be listed on their trading network (worldwide).  It is an attempt to keep the fraudulent reports that EGL International puts out from being traded via their network.

4) Just days before the removal of all EGL reports from Rapaport another network called Polygon also decided to remove EGL reports (they pulled the trigger faster, just so they can claim they did it first I think).  Polygon has left EGL USA reports available on their network.

5) Martin Rapaport is rumored to be starting his own diamond grading lab.

Heart Attack

Point #5 is what I find the most interesting.  Martin reports (ie. controls) diamond pricing worldwide.  If he opens a diamond lab he will both control the pricing and grading of diamonds that run through his lab.  Seems a bit shady if you ask me.

Lets say you had two large restaurants (MacD and Burger Sling).  Lets also say that you run a food supply company called ‘bad for you food distributors’.  Your food company supplies food to two of the largest fast food restaurants.

Your food distributor decides it is going to start their own restaurant (called Heart Attack).  Wouldn’t it be cool if you could eliminate 1/2 of your competition before you even start?  That would be excellent!

So, before you open your new Heart Attack chain, you inform Burger Sling that you will no longer be supplying them with any food (no other vendor large enough to supply them, keeping them in business).   Your essentially giving Burger Sling a death sentence even before Heart Attack opens its doors.

On top of that MacD has issues of its own, due to staffing problems and high demand it takes more than 4 days for them to prepare a simple burger meal.   What customer wants to wait that long?!?

When Heart Attack opens, and Burger Sling out of the way – who are consumers going to go to?  MacD with a four day wait or the new place that can get them their order quick?

EGL RIP

I have used EGL USA a few times, but the demand for diamonds with an EGL report has always been lower than diamonds with a GIA report.  People seem to submit lower color/clarity/cut diamonds to EGL USA, they seems to have a larger tolerance for diamonds of lower clarity.

With Rapaport removing them from the trading network, it is a massive blow to their lab.  I suspect they will either have to close their doors, downsize or the owners/staff of the EGL USA lab will have to start again with a new name.

The new name option seems good to me, I’ve always found it strange that an American diamond grading lab which operates out of NYC – claiming not to be associated with the EGL International labs – would call itself European Gemological Laboratory.

How about AGL (American Gemological Laboratory)…

Anyway, good luck to EGL USA  – my guess is they will not exist by October 15, 2015.

Nov 112014
 

I received the letter below from EGL USA’s Mitch Jakubovic (reprinted with permission).  In my opinion EGL USA is in a fight for it’s life (and will probably not win), I will do another post about what is going on between EGL and Rapaport in another post… here is the letter EGL USA is trying to get out into the wild.


The Truth about Honest Grading: An Open Letter to Martin Rapaport

egl_usaNovember 10, 2014, New York, NY — In response to Martin Rapaport’s article, “Honest Grading,” in the November 2014 issue of Rapaport Magazine, Mitch Jakubovic, director of EGL USA, has issued the following open letter:

Mr. Rapaport,

Like you, all of us at EGL USA believe that honest, accurate gemological grading is essential. And, like you, we are extremely concerned about EGL International’s apparent disregard for it.

As you know, we’ve been engaged in a 10-year federal court battle — fighting EGL International’s flagrant practices of unfair competition and inflated grading. We pursued this action to protect both the integrity of our work and the interests of our customers and final consumers. The judicial decision — which is imminent — could literally make EGL International reports a thing of the past in the US.

In addition, through the years, we have repeatedly asked you to protect the industry by delisting EGL International. Recently, at long last, you heeded our plea. For that, we thank you. However, your simultaneous decision to dismiss EGL USA and issue defamatory statements about our work is simply unconscionable and unacceptable.

We are outraged by your contention that EGL USA is “aiding and abetting” the sale of EGL International reports.

EGL USA has been fighting the good fight for years, while others — including you — have continued to promote, publicize, and profit from EGL International. We can’t help but wonder how much aiding and abetting was provided by RapNet listings for the “hundreds of thousands of diamonds worth billions of dollars … sold to consumers with overgraded reports.”

Adding insult to injury, you claimed that your policy is to “work with good laboratories” and, unfortunately for EGL USA, you are “not sure” about how good we are.

Allow me to refresh your memory: For nearly four decades, EGL USA has provided exceptional gemological service. Just last year you yourself published a survey, “Grading the Graders.” In it, you confirmed that our standards are “comparable” to those of GIA and IGI, two decidedly “good” labs that you work with every day.

If there is confusion in the marketplace, you have certainly contributed to it. And we hope, as an industry leader, that you will finally use your power to improve this situation, instead of making it worse. But rest assured, whether you do so or not, whether you right the wrong and reinstate us or not, we will carry on.

All of us at EGL USA are proud of our outstanding work and our name. And we are incredibly grateful for our loyal customers. We will continue to serve them, working with other fair-minded trading platforms, to promote and protect genuinely honest grading.

Sincerely,
Mitch Jakubovic
Director of EGL USA