From Russia with Diamonds

Yuri Shelementiev, Prof. of Mineralogy at Moscow State Uni, and the Head of the Russian Gemological Center and Sergey Sivovolenko proposed to me the idea that together we host the first ever International Diamond Cut Conference. This was in September 2003. It seemed a big ask, but we pulled it off in April 2004 and bought together major labs (that collectively grade 2/3rds of the worlds diamonds), diamond manufacturers and many technology companies at the forefront of the field. We imagined we would cancel it at the last minute if no-one wanted to come but we closed bookings early once the most important participants registered. There were 18 presentations to be made on a range of topics and, importantly, 2 other research groups also chose this venue to release new cut grading systems.

Sergey and I flew first to Basel the week before our conference for two purposes. Firstly, there was to be a GIA presentation at the Swiss Basel trade fair that we thought might have been the long awaited announcement of their new Cut Grade System (it was just more hot air). Secondly we had arranged negotiations with the heads of HRD (the Belgian semi government diamond Grading lab) to work together to establish our cut grading system. This photo shows Sergey on the left and his Belgian scanner partner Pol and his partner Natasha out for a lovely meal in an out of the way town between Basel and Zurich. Pol had GPS navigation in his car - let me tell you - I am hooked and if ever I drive in Europe again I will buy one of those portable PDA's to help get around.

On the trains back and forward to Basel from Zurich, and the plane to Moscow, Sergey and I began preparing for the diamond cut conference.

Moscow is not the easiest place to organize a conference. Russia has some rough edges so we needed to pick up and drop off all delegates at the airports (yes there are two). We could not arrange accommodation in the same hotel, so guests were spread through four different hotels including the conference venue. We split the delegates into 3 groups. Mr Janak Mistry (agent for Sergey's Helium and my Ideal-Scope Indian agent) looked after his countrymen in the conference hotel. The five-star Belgian's were with Sergey's partner Pol (who joined us for the HRD negotiations in Zurich). My charges drew the short straw. They had one thing in common; they all know me (and spoke English). Those of you who know me well are probably saying "Imagine Garry organizing a Sunday school picnic?" In the photo, L-R, are Peter Yantzer, Bruce Harding, Jose Sasian and Brian Gavin. The shot in the Hotel lobby has Paul Slegers behind me, then Jim Caudil who now runs the new AGS Advanced Gem Instruments division, with Jose and Brian.

The conference began on Friday the 23rd of May 2004, and went for 3 days (with factory and Kremlin tours etc on the 4th). Our groups Mercedes Sprinter mini-bus and Russian speaking driver dropped us off after a 30 minute drive against the traffic at the wrong conference. Fortunately the driver did not get far away, I phoned Andrey, the very capable OctoNus Accountant cum Conference Secretary, and sure enough we were on the opposite side of the city. But the boys all enjoyed the city tour as we crawled through the peak hour traffic and past St Basils. No matter, the Indian flight was late. Eventually my blood pressure settled down.

The opening speech was delivered by Sergey Oulin, the now ex-head of the Governments Alrosa Company, who control 20% of the world's rough diamonds. At the last minute when the Hotel called to say they were doubling the fees and charges (it is Russia remember) Yuri called him, and he made a call to sort out the Hotel, but in return demanded a few more free seats for his team.

We had a gentle start with our first presentation from Gabi Tolkowsky, the Grand Nephew of the mathematician who calculated the proportions in 1919 of what is often called the 'Ideal Cut'. Gabi gave an impassioned presentation on the theme of why consumers buy diamonds and how we should nurture them. Gabi still polishes diamonds and when ever I am in Antwerp I seem to bump into him and enjoy a chat. He is a distinguished and gentle man whose wild moustache and near shoulder length hair ensure he stands out in a crowd; you have probably seen him a few times on TV. His gift with words is second only to his charm. Gabi took 3 years to polish the worlds largest D Flawless diamond (273.85 carat De Beers Centenary). He is a living legend and proved to be a strong unifying force throughout the conference (and a moderators nightmare; he never asks less than 3 questions at a time :). Gabi presented the idea that there should be 2 copies of a diamond grading report, one for the trade, and another that is completely free of jargon and is more emotive and consumer friendly. He also made an excellent point that labs should provide trade name and new cut inventor protection that would be less costly than patents and trademarks. This would lead to more creativity in designing and marketing new cut's or "beauties" as he calls them.

The next presentation was from another elder statesman. Bruce Harding, an engineer and hobby gem cutter from Massachusetts, who was working on a stone faceting in the early 1970's when he noticed that when his head blocked the single lamp, the gem went completely dead. He did some calculations and drew up charts for bad proportions that result in too much light being directed to and from the observers head (head blocks light sources). A few years ago Drena and I drove up from New York to his home near Boston to visit him. I had failed to convince him via emails that a diamond needs some of that obstruction of light in order to create some contrast that makes the diamond sparkle. Face to face we worked it out and we have been on good terms ever since.
http://www.cutstudy.com/conference/DiamCutGrading.pdf

I followed Bruce with a brief run down of the GIA's presentation in Basel, with the aid of a power point presentation made up of photographs Sergey took of the GIA's slides.

Next was Udi Lederer from Sarin in Israel. Sergey's Helium scanner is a superior product to Sarin's range, and this puts me in a difficult situation; Sarin agent and new threatening competitor's friend and alliance partner. I tried (unsuccessfully) to bring the two together. Sergey is a scientist and developer who is not that interested in running a manufacturing business, and even less so in marketing, distributing and providing support for precision devices. Janak Mistry in India is a German trained design engineer with a couple of hundred workers making diamond cutting equipment. He is very capable of running the Helium business there. He takes a box of German lenses, camera and circuit boards and bolts them together on a locally machined slab of aluminum. Sarin will need to get used to Janak as a competitor there, but it is a huge market - 80% of Sarin's world wide sales. But sales and service in other countries, like America and Japan, are a worry and my solution for Sergey is for Sarin to assemble and distribute in those other markets. But Zeev, the CEO of Sarin, and Sergey play out the typical scenario; a blunt and direct Israeli, and a Russian who sees spies all around him. The solution is to get them out to a few dinners with some decent Aussie wine, they are both partial to a good red! But we have had one small success; the DiamCalcSarin Realistic Viewer that Sarin have ordered several hundred of and I brokered.

Anyway Udi (sitting to the left of Janak and Siddhartha) gave an excellent and wide ranging presentation. Sergey was impressed, it never seemed to occur to him that the opposition had any intelligent and articulate employees. And at the dinner in my favorite Moscow restaurant, the Aristocrat, Udi and Sergey ordered exactly the same dishes, and rated the wines together. (Maybe this food and wine thing is becoming an obsession with me?) Udi did make one surprise announcement.
www.cutstudy.com/conference/sample_abstract11.htm

After Udi, Sergey showed a video presentation of the Helium scanner (with my voice over - how embarrassing). For the record scanners have 2 uses. Firstly you pop a rough diamond on the rotating stage and build a 3D image. Then the wizzoo software calculates the biggest best-est diamond or diamonds you should polish out of the rough. Secondly, after the job is done, you can scan the finished stones and either give a proportion grade based on 'parametric' charts or build a 3D model and do ray trace analysis (more about that latter). OctoNus invented Helium because they needed a more accurate scanner that took into account not only each facets angle or slope, but also the direction in which it faces (its compass point or azimuth orientation).

Then yours truly presented lessons in how to interpret ideal-scope images and what they can and can not do for diamond manufacturers and buyers.
www.cutstudy.com/conference/sample_poster1.htm

After that I moderated a 'Technical' round table discussion with Erik Wanten from HRD, Janak Mistry, Udi Lederer, Siddharth Mehta a bright young manufacturer from Shairu Gems in Surat India, Prof Jose Sasian from Uni of Arizona, Bruce Harding and Sergey. The photo shows Jose, Eric and Sergey during the first Panel session.

American Paul Shannon from Diamond Technologies Inc, attended with his Aussie minder, Mike Mitchell (who I have known for a good few years). Mike worked for Rio Tinto and Argyle Diamonds and is now a semi retired consultant. Paul has been doing computer ray trace modeling for 15 years. Mike has told me since that Paul was a bit taken aback that he is not the 'market leader' any more.

That night the 3 of us worked very late making sense of Sergey and Yuri's two presentations. For dinner we shared various quiches, tarts and cheese cakes in the "Coffee Bean" café. Did I mention Russian women? Hm hum! Oh and also - I have been accused of fast driving, but I would never drive at 100km an hour past St Basils, the Kremlin and around the Moscow shopping precinct. It is fairly common there on the 5 lane roads.

After breakfast with our crew at our Orolenk Casino hotel, we bundled into our mini bus and headed off again. The morning started with Prof. Jose Sasian who has been working with Peter Yantzer and Jim Caudill from AGS to develop a new cut grading system that will have been released firstly for princess cuts 1st of May 2005. The American Gem Society (AGS) run a niche US lab that is a perceived market leader in cut quality grading. Their current system only works for round diamonds, and is a very basic type of parametric approach. They have come up with a parametric system with 'sloping' crown and pavilion that is very like HCA (they even used my colour scheme) and they have added 2 direct assessment refinements. Firstly they have developed a multi colored Ideal-Scope type device based on the GilbertsonScope and called 'ASET' which I am making for them under license. It produces images that indicate the direction that returned light comes from. Secondly they have a 'FireGram' system that has little images showing dispersed light in the diamond.
www.cutstudy.com/conference/sample_abstract6.htm

Executive Director, AGS Laboratories and Gemological Sciences

Peter's presentation that followed described a number of additional 'one strike' and the stone is out of the top grade methodology; e.g. a poor spread or a very thin girdle that could cause durability problems. They initially used DiamCalc to design their system, but have since copied the program with the help of, yes, you guessed it; a Russian programmer! While I believe Sergey's cut grade approach has many advantages, it would appear the AGS is better thought out than what we know of GIA's. We should also note the passion that Peter Yantzer brings to this topic. He has sought outside expert help and explored every available avenue. We disagree on only a few points, like the idea that a diamond should look good at a very close viewing distance of 250cm or 10 inches from your head. That is too close in my book, but Peter argues that any diamond that looks good that close up can also look good at a greater distance. We also had some interesting debates about the use of the word "Ideal". Pete's passion for the word, and the fact that AGS 'own' it, makes a very strong case that they continue to use it. The top cut grade of 'AGS 0' and Ideal have become synonymous.
www.cutstudy.com/conference/sample_abstract4.htm

Next Yuri presented in English on behalf of OctoNus and MSU on the strategy of cut grading systems based on 3D models. This presentation outlined a process to verify the basic light responses (those we verbalize when describing diamonds, brilliance, fire etc) using master stones.

MSU is one of the seven imposing examples of Lenin architecture in Moscow. I call it ugly beautiful.

This master stone set (MSS) will be made available to all major labs (including GIA and Japanese labs who did not attend) to ensure that diamonds with similar appearance will be given similar grades by all labs. There was a strong consensus at the conference that this is important to build consumer confidence.
The MSS should not be thought of as a grading set like color masters. It will consist of many diamonds that might be described as 'good', or 'excellent', or 'bad' for a wide variety of reasons. They will be selected or manufactured to indicate various features of Basic Light Responses (e.g. light return, leakage, contrast, fire, scintillation, brilliance etc) that result from various proportions and symmetry defects. We would begin with 57 facets round brilliants.

The MSS will be examined by industry experts from all levels and geographic regions. Their reported appearance will be recorded and the information compared with Basic Light Responses from 3 Dimensional models. These 3 D models will be created using the most accurate scanning device (Helium from OctoNus).
Neural (fuzzy logic) statistical applications will be applied. Refinements will then require new examples of stones will be produced to find boundaries for 'good' and 'bad' for specific Basic Light Responses that result from variations in both proportions and specific symmetry variations. Eventually the basic light responses (BLR's) will be refined and verified to the point that it is possible for the most effective grading systems to be predictive of human perception of diamond appearance with a high degree of accuracy. It might be expected that there will be geographic and demographic preferences. These can then be quantified and can be the basis for new refinements to production, distribution and marketing of diamonds.
This process will also work for fancy shaped diamonds. Advantages of a predictive 3 D approach:
1. It will be a simple task to complete a fancy cut grade for any cut. Manufacturers should submit at least one good and one bad sample to become part of the MSS.
2. 3D modeling software based systems can 'reverse engineer' to design beautiful new cuts as well as improve the appearance of existing diamond cuts
3. New shapes that better utilize a variety of rough shapes will lead to improved yields.
4. This could raise the value of diamond mines that produce more of certain shaped rough. www.cutstudy.com/conference/sample_abstract5.htm

After the first of the two OctoNus and MSU presentations Ms Peeters, head of the HRD research division, made an announcement that HRD would co-operate with OctoNus and that they will hold the MSS. This was a very important announcement that took a ridiculous amount of time to agree on the correct (dry) wording. (9 months later Sergey pulled the plug after many hassles with HRD's lawyers)

The next presentation was by Iiro Suuko, a jewellery retailer from a small town in Finland. Iiro became interested in topics discussed on diamond forums where he is known as 'Sibelius'. With the information learned and contacts he made he transformed his small business into a super ideal cut diamond specialist. Iiro's passion has greatly improved his profitability and focused his product range from generic to specific. He spoke of the very different relationship he now has with his clientele; he is no longer just a vendor, he is a friend and advisor. He no longer has competitors; other jewellers simply can not do what he has done. www.cutstudy.com/conference/sample_abstract2.htm

Following Iiro, was Marrten de Witte who works with Hearts on Fire (HoF), the most successful American distributor of Hearts and Arrows branded diamonds. Marrten runs training courses for retail sales staff at the HoF 'University' and manages customer contacts via their corporate website and call center. I made 3 pages of notes during Marrten's stirring speech. He picked up right where Gabi left off and contributed throughout the conference. He has a cutting, or rather, a 'fashioning' background and has studied science. His presentation was summed up with his closing statement. "Facts tell. Emotions sell." www.cutstudy.com/conference/sample_abstract10.htm

Next Sergey spoke (in Russian, we had an excellent head phone translation service) about the second OctoNus presentation on the stages of development and implementation of the proposed cut grade system. He introduced a new concept of ETAS or 'effective total angular size'. Using an analogy that Jose Sasian had earlier introduced, that the crown facets of a diamond are a set of windows that open onto more and still more windows that reflect the diamonds surrounding environment. We can call these facets that look into facets that look into more facets etc 'Virtual Facets'. And we know for example that any diamond should have a certain variety of virtual facet sizes. For example some of the bigger facets, like the ones that make a star pattern inside the table of a symmetrical Tolkowsky 'ideal cut', are necessary to create a good amount of fire in a stone smaller than, say, 1 to 2 carats. But in a 5 or 10 carat stone these virtual facets can be too large, and Sergey has proposed that very specific deviations in symmetry, or additional facets could improve our pleasure from such larger diamonds.
Conversely there needs to be plenty of smaller virtual facets like those we see in a princess cut diamond. Princess cuts below half a carat, however, lack sufficient virtual facets of adequate size to produce enough contrast, scintillation or fire. Mark Goossens from Inter Gem-Claes raised the issue that in his business, specializing in making smaller sized rounds, he avoids the so called ideal cut because they look too dark. In Mark's experience, markets prefer larger table diamonds for pave' setting. This reminded me of the only question Sergey wanted (me) to ask at the GIA's Basel presentation a week earlier (they expected more ?'s from us). "If you were to grade two diamonds with identical color, clarity and proportions, but one is 0.30ct and the other is say 5.00ct, would your proposed grading system give both the same cut quality grade?" Tom Moses answered "Well, ah yes, these diamonds would have different appearances, but yes, we would give them the same grade." This single question should have been sufficient to raise some doubts about the GIA approach. An OctoNus cut grade system will first build a scaled 3D model from a scan of the actual diamond and calculate the number of and Angular Size of the potential rays that an observer could see (given 2 eyes & pupil diameter etc) from any given vantage point. The rays coming from a smaller diamond would be different to those from a larger diamond.
The ETAS data for any accurate scanned 3D model of a diamond can be statistically analyzed and compared to algorithms based on the basic light response results from the various master stones. So, rather than attempt to quantify each of these human perception factors, like brightness, brilliance, fire, contrast, scintillation, etc, OctoNus will match the probability of each 3D model being attractive and, even, indicate which demographic or geographic market might be most attracted to that particular stone. This approach can then be used to plan the cutting of each rough diamond.
www.cutstudy.com/conference/sample_abstract3.htm

On Sunday morning Olga Okhrimenko presented To Brand or Not To Brand - FAQ's and Practical Answers. Olga has a wide experience as a marketing consultant with CBI Consulting. She has helped introduce multinational global brands to Russia. She understands many issues concerning the diamond industry.
She raised the issue that many companies want an advertising campaign for this or that product, but this is the wrong way. Firstly, they should undertake an analysis of core strengths and weaknesses. This process must involve senior management and is time consuming, so therefore it is costly. After this review of the match between business goals and profitable customer profiles leads to the establishment of a 'brand essence'. The company should firstly communicate this idea throughout the various levels of the organization and align and focus its efforts. Only then can an advertising campaign or marketing communication be truly effective. In many cases the approach and target market might be so clearly defined that the cost to communicate your unique proposition or message to the market may be much smaller than first thought. It might even be unnecessary!
Olga drew a chart that had 'thought' as a vertical axis and 'feeling' on the horizontal. A purchase that involved little thought or feeling, like soap or shampoo, would be on the lower left. Buying a sports car involves a lot of thought and feeling, and would fit in the upper right on the chart, as a high emotional and intellectual pursuit. My interpretation of this chart is that diamonds are usually extremely high 'feeling' gifts, or indulgent self purchases, because they are generally bought at highly emotive times. The larger the purchase, the more likely the buyer will become intellectually involved; visa ve the phenomenon of researching via the Internet, although an engineer type would be more likely to want to learn all the details before making a purchase than say a more 'feely - touchy' person like perhaps a hairdresser.

Russia's largest diamond manufacturer, Kristall Smolensk, employed the Russian Federal Nuclear Center - All-Russia Scientific Research Institute of Experimental Physics to devise a diamond cut grading system. Director Victor Baranov presented On the introduction of a new Integral Coefficient of Diamond Beauty Brilliance. This new system combines the idea of a parametric and direct assessment, to produce a single numeric value called Charm. Above 1.0 would be most desirable, below 0.8 would be less so. The scientists created ray tracing software that produces remarkable large images of a parametrically perfect diamond. They used this software for two things. Firstly they developed values for basic light responses (BLR) of intensity (brightness) dispersion, sparkle and pattern. Using this data they produced parametric cut grade charts based on table, crown and pavilion proportions. Secondly they 'verified' the system by placing 10 'charming' ladies in front of computer monitors to observe many thousands of computer generated movies on monitors. They also showed a slide of a device that is currently being patented. This photographic device will rate a diamonds 'charm', accounting also for the negative effects of low color and clarity which can influence a diamonds beauty.
They have used this software to reverse engineer or predict new desirable diamond cuts. One example was an octagonal stepped cut called the 'Stealth' which had unusually flat proportions. www.cutstudy.com/conference/sample_abstract9.htm

Next Nicholas Del Re from EGL-USA presented on his passion, patents and gemstones. Nick has researched this topic in more detail than one could imagine is possible. He took us through both the history of patents and of diamonds and lapidary in a story form that could make a saleable book.
Cutting for Certificates, Or Cutting the Profit? A review on Indian Diamond Manufacturing was presented by Janak Mistry, partner in Lexus SoftMac, India. Janak is a German trained engineer with US production experience who by chance became involved in making equipment for the diamond industry in his home town of Surat where around ½ the worlds diamonds are manufactured. Before getting to the substance of his presentation Janak presented a slide show of the new breed of factories in India. Many people in the audience were surprised by the state of the art technology and equipment in world class working environs being utilized by well trained skilled workers. Janak, who I have seen in action, proceeded to show a typical flow chart for diamonds as they are pre-planned on one of more than a dozen Sarin Laser DiaMension's. We followed the flow chart for a factory that produces 6,000 stones a day. After the stones are sawn they are returned for post planning in each step of the process through bruting and blocking to their final proportion scan and possible return to the wheel for repairs or improvements. Next Janak made his main point. The yield achieved on half of a randomly chosen 100 piece sample was 39.7% when they were cut to AGS 0 (the goods are mostly makeable chips which usually have lower yields). The other half were cut using Ideal-Scope images whilst planning to optimize the stones beauty and performance. The yield on this half was 41.4%. If these better yielding and more beautiful stones were accepted in the market and sold for the same premium as the AGS 0 stones (which they currently do not), the additional yield would translate to an additional $2 million dollars profit a year. Janak then gave a specific example of a bruted stone being on his Lexus Planner that would return 1.89ct to 1.92ct using GIA very good and AGS 0 parameters. The lexus planner comes with DiamCalc and, by using the Ideal-Scope view, showed the GIA and AGS stones had very bad table leakage. Two other options were planned that returned 2.02 and 2.03ct and had wonderful ideal-scope images. The point being made was that the currently accepted proportions preferred by labs result in poorer yields and worse looking diamonds.
www.cutstudy.com/conference/sample_abstract12.htm

Brian Gavin from A Cut Above gave the final presentation on the key facets that effect Hearts and Arrows patterns and his standards for grading H&A's which he has proposed as a standard that lab's might adopt. Brian explained by showing diamonds at various stages of production how "it is all in the Hearts". There are 5 facets that must be correctly proportioned and symmetrical with relation to each other in order for each heart pattern to be perfect. They are 2 pavilion mains, 2 lower girdles and 1 star facet. Brian would like all labs to grade H&A's. Brian also pointed out that lower girdle facets can not be longer than 80% as this causes split (broken) hearts. Marc Brauner from IGI explained that they make their own judgment on H&A's grades and they put a photograph on the report. That way also the H&A's grading is clearly displayed for both buyers and sellers to judge for themselves. Peter Yantzer said that he and his board are not in favor of H&A's grading until it is clear that H&A's provide a beauty benefit, but he does understand that it can provide a craftsmanship rating. We are also aware that HRD now make H&A's comment.
Finally we had our last Open Panel. We had a large circle with about a dozen people on the 'panel', mostly people who had made presentations. But by now we had established such an informal community that even shy people felt happy to contribute their opinions. There were only a few people who choose to be passive observers; some because they were there to observe and report back to base and others because perhaps they felt language was a barrier, but I am sure their questions were asked by associates.

One stand out panel member was Siddharth Mehta. Siddharth is a partner in Shairu Gems and has already implemented an advanced planning process into his families manufacturing business that he now runs in Surat. Paul Jacobs also provided excellent answers to many questions. Paul represented a well known tool manufacturer before taking a senior position in Venus Jewel, an innovative Indian manufacturing firm. And IGI Director, Marc Brauner, posed many dilemmas and difficult questions. But there were many wonderful people at this conference, and I have only named a handful. Shown below is Marteen De Witte from Hearts on Fire, Peter Yantzer and Marc Brauner.

Poster presentations were also on display. Michael Cowing had some excellent photographic examples showing the importance of contrast. (Contrast was covered by many presenters). There was a brief demonstration with high tech 3D glasses by OctoNus showing an optical illusion of the way our minds trick us with subtle differences in shades. I attempted to show a new Rapid Photographic System for making images of diamonds and auto cropping out the background and sending the image to specific reports etc. This has been produced by OctoNus and Ideal-Scope to provide reliable and reproducible Ideal-Scope and realistic photos. The system can work with H&A's and other images also.

Here is a photo of Andrey the Organizer standing outside the Moscow State University, the side entrance to the geology faculty. OctoNus offices are in the attic red brick area with the tiny port hole windows beneath the clock on the left side.
Next year we would like to hold a second Cut Conference, but we hope it will be in the USA or India, and that someone else will lose a month or two's productivity by hosting it.

On behalf of Sergey Sivovolenko and Yuri Shelementiev and many others who helped make this conference the success that it was, we thank all the participants.

Garry Holloway