Deal for Columbia River hydropower clears path for diamond making in Wenatchee

Jun 6, 2019

When you think of made-in-the-Northwest products, diamonds are probably not on your list. But soon, they could be. A contract signed Thursday for Columbia River hydropower clears the way for a foundry to make lab-created diamonds in Wenatchee, Washington.

A young, San Francisco-based company named Diamond Foundry developed a crystal-culturing process to rapidly grow diamonds layer by layer. It happens in a plasma reactor that gets as hot as the outer core of the sun -- 10,000 degrees Fahrenheit. The technique borrows from approaches used in the manufacture of solar cells and semiconductors. It requires enormous amounts of electricity.

Kyle Gazay, president of production for Diamond Foundry, said the company chose the Wenatchee Valley because the Chelan County Public Utility District could supply enough renewable hydropower.

"We don't want to just grow diamonds," Gazay told reporters Thursday. "We want to grow carbon-neutral certified diamonds, so that was a really important part of that mission."

The electricity contract the diamond factory signed allows for up to 19 megawatts, which means its one building could consume the same amount of power as a town with around 11,000 typical Pacific Northwest homes.

Steve Wright, Chelan PUD general manager, said when the diamond manufacturer achieves full production it will draw four times more power than the current biggest retail customer of the utility, fruit packer Stemilt Growers. Wright said his utility was glad to help recruit new economic activity to replace some of the jobs lost when the even more energy-intensive Alcoa Wenatchee aluminum smelter shuttered.

Diamond Foundry said it is planning to hire between 35 and 50 employees in Wenatchee. The company leased and renovated a fire-damaged, surplus fruit warehouse from Stemilt Growers in north Wenatchee. It has already begun limited operations there.

"Stemilt looks forward to Diamond Foundry becoming yet another gem of our community," said Stemilt president West Mathison, during a contract signing ceremony at the PUD headquarters.

Mathison was by no means the first to rock some puns. Chelan PUD Commissioner Randy Smith said he could foresee grounds for an amendment to Wenatchee's civic moniker.

"I can see the new reader board outside of Wenatchee, 'The apple capital of the world and the jewel of the Columbia,'" Smith said, prompting laughter from fellow board members, as the PUD leadership voted to approve the contract Monday.

A Diamond Foundry spokeswoman said the new facility would allow the manufacturer to scale up production to 1 million carats per year from 100,000 carats now. A current diamond-making facility in San Francisco will remain in operation to help meet demand.

Diamond Foundry positions itself in the jewelry marketplace as "morally pure." The company launched in 2015. It counts Hollywood actor Leonardo DiCaprio among its investors. On the Diamond Foundry website, DiCaprio praises the cultivation of real diamonds in America without the human and environmental toll of mining in places such as Africa or Russia. The company said its conflict-free diamonds are atomically identical to natural, mined stones.

In late March, Diamond Foundry was one of eight jewelry companies to receive warning letters from the Federal Trade Commission. The FTC staff expressed concern that consumers could be deceived by some online advertising because it did not consistently precede the word "diamond" with a qualifier, such as "laboratory-grown" or "laboratory-created." The FTC also took issue with the advertisement of diamond jewelry as "eco-friendly," "eco-conscious" or "sustainable."

"We note that marketers must have a reasonable basis for any environmental benefit claims they make for their products, and qualify any such claims adequately to avoid deception," FTC associate director James Kohm wrote in his letter.

"We have worked collaboratively with the FTC for years," Diamond Foundry CEO Martin Roscheisen  responded, in a prepared statement. "We pride ourselves on being a lab grown diamond producer and this point of differentiation is what our success is built on."

Roscheisen said his company's sustainability claims have been independently assessed. He said Natural Capital Partners certified Diamond Foundry as being carbon neutral.