Scio Diamond Technology’s history began with Dr. Robert Linares and his vision of growing diamond for semiconductor applications. He had previously pioneered the growth and development of gallium arsenide, now found in every cell phone manufactured in the world today. From 2000 onward, Dr. Linares’ team focused solely on diamond and in developing a process by which large, single-crystal diamond could be grown in a controlled laboratory environment. The core technology is based on a chemical vapor deposition (“CVD”) diamond growth system. As of December 2011, Scio Diamond had thirteen patents (10 US [9 issued; 1 claim allowed]; 1 Australia; 2 China) related to its technology with approximately forty (40) domestic and foreign patents pending.
In August of 2011, Scio purchased much of the equipment and intellectual property of Dr. Linares’ companies with the intent of moving into commercialization of the proven technologies his team had developed. Scio Diamond initiated a capital raise during 2011 which was completed in December of that year yielding net proceeds of over $4.5 million. In September, 2011, Scio Diamond Technology Corporation’s shares began trading on the OTCBB under the symbol SCIO.OB.
Soon after the purchase of the diamond-growing equipment and IP, Scio Diamond announced and commenced a movement of production from the Boston area to Greenville, SC. Scio is targeting revenue production from its new facility in South Carolina beginning during the summer of 2012.
Prior to 2008, W.H. Ireland, Ltd. had stated that from a macro-economic fundamentals perspective “the diamond-mining sector is the most positive it has been for more than 30 years.”
- De Beers, who controls approximately forty percent (40%) of the world’s diamonds by value, stated in September 2008 that it “could not get diamonds out of the ground fast enough to meet supply.”
- De Beers achieved record sales through the first nine months of 2008 before fourth quarter sales slowed significantly as a result of the onset of the global economic downturn and the subsequent liquidity squeeze in the key global cutting centers.
- Notwithstanding reduced fourth quarter demand, De Beers’ rough prices increased fourteen percent (14%) in 2008. As a result of the economic climate, demand for rough diamonds declined an average of 30-40% in 2009 from previous 2008 highs.
- In response, many diamond mining operations in 2009 were and continue to be suspended if not altogether shut down and inventories were also reduced.
- In addition, industry investment in exploration and development decreased dramatically in 2009 (e.g., De Beers exploration budget of c. $94 million in 2008 was reduced to c. $44 million in 2009).
- In spite of the effects of the economic crisis, the industry predicts a return to strong long-term fundamentals as recovery occurred.
The aforementioned actions to reduce supply and exploration reductions have created inevitable upward pressure on pricing as the industry is emerging from the recent economic crisis.