Police in Surat, India, are investigating an alleged switch, in which a “buyer” replaced a 10.08-carat natural diamond, valued at $545,000, with a near-worthless lab grown replica.
The “buyer” examined the heart-shaped D / VVS2 stone and its GIA certificate, agreed terms and put down a $12,000 down payment to secure the purchase.
He left, saying he needed to withdraw money – and has not been seen since.
The owner of the diamond soon realized he’d been left with a lab grown replica of identical shape, color and weight, but worth less than $2,000.
Police say they are pursuing the “buyer” and at least two accomplices, according to a report in the Economic Times.
Declining profits for lab grown diamonds could push retailers into a natural diamond pivot, said Paul Zimnisky, an independent diamond industry analyst.
Last week Zimnisky spoke to Kitco Mining.
The diamond market has been in a tough spot due to declining sales. In September Petra Diamonds reported full-year revenue declined 44%. In February Lucara Diamond announced full year revenue was down 16%, adding that the diamond market is a “volatile environment with market challenges coming from multiple areas.” Storied diamond company De Beers is being sold off by parent Anglo American, which is restructuring after rebuffing a takeover by BHP.
Demographics and growing market share by lab grown diamonds are part of the challenge, said Zimnisky, but exclusivity and rarity of natural diamonds could end up helping. Innovations in production have led jewelers to cut the costs of lab grown diamonds. That may lead jewelers to pivot and prioritize selling natural diamonds over lab grown, said Zimnisky.
“The catalyst could be declining profitability of selling lab grown diamonds, ” said Z. “[That] could incentivize retailers to really push natural diamonds again. That has the potential to be a very positive development for natural diamond industry.”
According to Vantage Market Research the Global Lab Grown Diamonds Market Size is expected to reach a value of USD 27.2 Billion in 2023. The Lab Grown Diamonds Market is projected to showcase a CAGR of 9.1% from 2024 to 2032 and is estimated to be valued at USD 59.5 Billion by 2032.
The lab-grown diamonds market has emerged as a formidable force within the diamond industry, captivating consumers with its ethical and sustainable approach to creating stunning gemstones. Unlike mined diamonds, which are extracted from the earth through an environmentally impactful process, lab-grown diamonds are meticulously crafted in controlled laboratory environments.
This innovative technology replicates the natural diamond formation process, resulting in stones with the same physical, chemical, and optical properties as their mined counterparts. The burgeoning lab-grown diamond market is fueled by a confluence of factors, including rising environmental consciousness, evolving consumer preferences, technological advancements, and increasing disposable incomes.
De Beers Group announced late last week that it will be suspending production of diamonds for jewelry at its Lightbox factory in Gresham, Oregon, pivoting instead to industrial diamonds for technology applications.
The company made the announcement Friday, in the midst of the Las Vegas jewelry trade shows.
The lab-grown pivot is part of a broader new strategy called “Origins,” which is designed to grow desire for natural diamonds while cutting costs.
In an interview with National Jeweler on Friday, De Beers CEO Al Cook elaborated on the decision, including on the future of Lightbox, the lab-grown diamond jewelry brand De Beers launched six years ago.
“Element Six used to produce diamonds because they were hard and they could be used industrially,” he said. “Now, with the price of synthetic diamonds coming down, it opens up this amazing set of technological activities. We’re in partnership with … a number of high-tech companies looking at how you use diamonds as components in the digital era.
“That bit for us is really exciting. And that’s where the future of synthetic diamonds lies for us.”
Despite the transition at the factory, Cook said Lightbox will continue as a brand, drawing upon existing stock for the immediate future.
“At the moment, we’ve got a lot of stones available to Lightbox. Production will continue for a few months to ensure that they’ve got a stock of beautiful lab-grown diamond stones they can sell.”
After Lightbox depletes its existing stock, “we’ll see where the brand goes and we’ll see what happens,” Cook said. “I think it’s too early to say.”
De Beers announced the launch of the Lightbox lab-grown diamond brand during the Las Vegas shows in 2018.
At first, De Beers was growing the diamonds for Lightbox at its Element Six facility in the United Kingdom.
In October 2020, it opened its $94 million Lightbox factory in Gresham, a Portland suburb.
In an attempt to control the direction of the lab-grown diamond market, De Beers set an $800/carat price structure for the line.
It also marketed Lightbox as jewelry for less-special special occasions, like Sweet 16s or graduations, not milestones like engagements or anniversaries, which, it posits, should be celebrated with natural diamonds.
Since the line’s launch six years ago, lab-grown diamond prices have dropped precipitously. Lightbox cut its prices by as much as 40 percent last month.
Cook said De Beers expects the trend to continue.
“For a lot of retailers out there, the incentive to sell natural [diamonds] and the incentive to sell lab-grown are reversed. There was a period of time, a year-plus ago, when retailers got more of a margin sometimes from selling lab-grown diamonds.
“They were cheap to manufacture, and they could be sold as near-equivalents to natural diamonds. We didn’t do that in De Beers Group. We made very clear through Lightbox that these were two entirely different propositions,” he said.
“Not everyone followed our approach. It is now very clear that for all the retailers I can speak to here at JCK, the margin you get by selling a natural diamond is far greater than the margin that you get by selling a lab-grown diamond. It’s also clear that the gap is going to grow rather than shrink. We expect the price of lab-grown diamonds to go down and down, to continue collapsing.”
As it transitions production at the Lightbox factory in Gresham, De Beers announced Friday that it also will be consolidating its Element Six chemical vapor deposition (CVD) diamond-growing facilities, going from three factories to the one factory in Oregon.
Lab grown diamonds are a threat to Botswana’s economic lifeblood, says the country’s president Mokgweetsi Masisi.
He was speaking to reporters on Wednesday (29 May) ahead of the first phase in a $6bn project to extend the life of Jwaneng, its flagship diamond mine.
“If lab grown diamonds take our space, then you and I are finished,” he said. He pledged to wage “a peaceful assault against lab grown diamonds, to give confidence to our partners and dampen any attraction to lab growns.”
He was departing for JCK in Las Vegas, where he also said he’d be lobbying the US over G7 sanctions on Russia that route all EU diamonds through a single entry point in Antwerp.
Meanwhile work is about to start to start of the first phase of the Jwaneng development, a establish a drilling platform at a cost of $1bn.
It began commercial operation in 1982 as an open pit operation run by Debswana, a 50:50 joint venture between De Beers and the Botswana government.
Open pit operations are expected to end in 2032 but underground mining could extend Jwaneng’s life to 2050 or beyond.
It currently represents about 40 per cent of De Beers total production (10.3m carats in 2022).
Three quarters of Debswana’s production is currently sold by De Beers. But under a new deal agreed last June, the state-owned Okavango Diamond Company (ODC) will see its share increase over the next decade from 25 per cent to 50 per cent.
Pandora’s abandonment of mined diamonds has apparently not hindered its standing with younger consumers.
Speaking to the Financial Times (FT) Tuesday (May 7), Alexander Lacik, CEO of the mass-market jeweler, said younger buyers helped fuel a boom in lab-grown stones that had led to a decline in sales of mined diamonds, and helped the company best its luxury rivals.
Lab-grown diamonds are opening up the industry to new consumers, he said, as these stones are usually about a third of the cost of the alternative.
“People are discovering that a diamond is a diamond. It’s a different value proposition, and people are voting with their wallets,” Lacik told the FT. “Older customers are more wedded to mined diamonds. Younger ones are more open to lab-grown.”
The report notes that Pandora became the first major jeweler to move to a lab-grown-diamond-only strategy in 2021 as it pushed to expand its offerings beyond the charm bracelets and necklaces for which it had been known.
The company nearly doubled its sales of lab-grown diamonds in the first quarter, increasing revenue by 87%, the FT said.
Gen Z’s embrace of lab-grown diamonds makes sense in light of PYMNTS Intelligence research showing that this age group — more so than other younger consumers — is most likely more likely to point to buying an expensive retail product as their main financial goal than to mention paying for an upcoming event or show.
“In fact, consumers in this group are seven times as likely to prioritize the former as the latter,” PYMNTS wrote last month.
By contrast, millennial and bridge millennial consumers were the most likely to list paying for an event or show as their top goal.
“By 2030, barely five years from now, Gen Z will represent a third of the workforce. Their disposable income is projected to increase by sevenfold and their spending by sixfold as their incomes rise and they begin to benefit from the $90 trillion transfer of wealth headed their way from parents and grandparents,” PYMNTS CEO Karen Webster wrote recently.
“For that reason, Gen Z is the generation that all businesses are courting — they are their future workers, customers, business partners and investors.”
At the same time, this age group is also struggling to make ends meet, with 59% of Gen Z consumers living paycheck to paycheck, despite half of them not paying rent or mortgage.
“With such a financial cushion, the question remains as to why these young adults struggle to live within their means,” PYMNTS wrote last month. “One answer: Gen Z consumers cite splurging on nonessential items as a top reason for their financial lifestyle.”
The American Gem Trade Association announced that, starting at Tucson next year, exhibitors will not be allowed to sell lab-grown diamonds or colored gemstones at the AGTA GemFair.
National Jeweler received a news release on AGTA’s decision via email Wednesday morning. The release also was posted on the AGTA website, though it had been removed by Wednesday evening.
AGTA CEO John W. Ford Sr. said the news release was “pulled by error,” and would be reposted today.
According to the release, AGTA’s new rule bans the display of loose gemstones or jewelry “comprising non-natural gemstones, ones that are man-made, synthetic, or lab grown.”
AGTA said its dealers can still sell lab-grown gems if they are disclosed, but only natural gems can be made available for purchase at GemFair.
The association said it enacted the ban to “thwart potential confusion,” confusion it sees happening in the lab-grown diamond industry and fears will affect the colored gemstone industry, even though lab-grown colored stones have been around for more than a century.
When asked what led to the belief that confusion was occurring, or could occur, in the colored gemstone market, Ford said in an email to National Jeweler, “Look no further than the chaos created by synthetics in the diamond industry … Our action is also in response to considerable concerns voiced by AGTA membership in relation to the adverse effects that synthetics could also potentially cause in the colored gemstone industry.”
While the AGTA’s decision has made headlines, it does not seem poised to have a big impact on AGTA GemFair exhibitors, few of whom sell lab-grown gemstones anyway.
In his email, Ford said out of the 260 exhibitors of loose or set gemstones at the 2024 AGTA GemFair Tucson, only two list that they sell synthetic gemstones in the AGTA Source Directory.
“Since sending out over (260) 2025 AGTA GemFair Tucson renewals, we’ve had an overwhelmingly positive response from the vast majority of our exhibitors, greatly outweighing any negative responses,” he said.
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In its news release, AGTA also noted that lab-grown gemstones lack the value inherent to natural gemstones, which are rare and sometimes inimitable.
“AGTA felt that it needed to be crystal clear to buyers that when they attend an AGTA show, they know that they are only shopping mined natural gems from the earth,” said Kimberly Collins, AGTA board president and owner of Kimberly Collins Colored Gems.
“AGTA dealers pride themselves in sourcing superior gems that are rare, beautiful, and natural.”
AGTA also notes that “synthetic gems are not minerals.”
The association said it recognizes two definitions of the word “mineral”—that of the British Geological Survey, defining a mineral as “a naturally occurring substance with distinctive chemical and physical properties, composition, and atomic structure” and that of the U.S. Geological Survey, which defines a mineral as a “naturally occurring inorganic element or compound having an orderly internal structure and characteristic chemical composition, crystal form, and physical properties.”
“The definitions are essentially the same, but the keyword in both that is important is use of the word ‘natural,’” said AGTA board member John Bradshaw.
“It’s important to indicate that synthetic gems are not considered minerals, because minerals are natural, and synthetics are not.”
Ads for synthetic diamond jewellery have been banned after the UK company behind them, Skydiamond, did not make it clear they were not real.
Even though the strapline of the newspaper advert was the “world’s first and only diamond made entirely from the sky” and a social media ad said “love is… a diamond gift made from the sky”, there were complaints from the National Diamond Association.
The advertising regulator upheld the complaints and concluded that the ads were misleading and said they could not appear again in the same form, including on the company’s website without, better explanation.
Skydiamond, the trading name for The Sky Mining Company Ltd, was told by the Advertising Standards Authority not to use the terms “diamonds”, “diamonds made entirely from the sky” and “Skydiamond”, and not to describe its synthetic products “without a clear and prominent qualifier”.
The firm was told by the ASA that it must use terms such as ‘synthetic’, ‘laboratory-grown’ or ‘laboratory-created’, “or another way of clearly and prominently conveying the same meaning to consumers” and were not to use the claim “real diamonds” to describe synthetic diamonds.
Sky Mining said both the ads and extensive information and graphics on its website set out that their diamonds were manufactured in a laboratory, with detailed information on the production process on its website.
The company said the very brand was built on the premise that their diamonds did not come from the earth and do not have the negative environmental impacts associated with diamond mining, with all components required sourced from the sky: atmospheric carbon dioxide (as a source of carbon), rainwater (as a source of hydrogen) and renewable energy from solar and wind power.
As explained on the company’s website, Skydiamonds are made from carbon dioxide and hydrogen extracted and produced using proven industrial processes and combined to form methane in a biological process, with methane fed into chemical vapour deposition machines in which diamonds developed at a high temperature over 14 days.
It says for every carat of Skydiamond produced, greenhouse gas emissions are reduced by 99.79% compared to mined diamonds, and that compared to growing diamonds in a laboratory, mined diamonds produce 4,383 times more waste, use 2.14 times the energy and 6.8 times as much water.
The ASA acknowledged that further information on the Sky Mining manufacturing process appeared on About Us pages of the website among other pages.
“However, in the absence of a clearly worded and prominent qualification such as ‘synthetic’, ‘laboratory-created’ or ‘laboratory-grown’, or another way of clearly and prominently communicating the same meaning, we considered it was still ambiguous as to whether the diamonds were synthetic or not,” the regulator said.
Brilliant Earth’s sales grew 4% year on year to $124.3 million in the fourth quarter amid a record number of orders.
The 18% increase in individual orders offset a 12% decline in the average value per sale during the three months that ended December 31, the retailer said last week. Net profit for the period fell 69% to $1.9 million.
Engagement rings were one of the top sellers for the company, with demand for those above $10,000 increasing year-on-year in the fourth quarter, Brilliant Earth CEO Beth Gerstein said last week in an earnings call, transcribed by Seeking Alpha. The average sales price for engagement rings was up 4% year-on-year during the three months.
Additionally, new campaigns featuring celebrities and influencers brought in consumers. The launch of Brilliant Earth’s Sol collection, in partnership with Emmy-nominated actress Camilla Morrone, proved popular, with productivity “far outpacing” that of prior collection launches, Gerstein explained. The company’s new lab-grown Capture collection, made with synthetic diamonds manufactured using 100% renewable energy, also “resonated strongly” with consumers, it said.
For the full-year, sales rose 1.5% to $446.4 million, while net profit dropped 75% to $4.7 million.
Brilliant Earth expects sales for the first quarter of 2024 to reach between $96.5 million and $98.5 million, ranging from a decrease of 1% to growth of 1%, chief financial officer Jeff Kuo noted on the earnings call. For the full year, net sales are anticipated to rise 2% to 5% to between $455 million and $469 million.
Human-made diamonds come with an appealing claim: Manufacturers say the stones are produced ethically using renewable energy. But many of the products do not meet that claim or their producers do not confirm the electricity sources they use. And, laboratory diamonds require a lot of electricity to produce.
In the United States, lab-grown diamond sales increased 16 percent in 2023 from 2022, says Edahn Golan, an industry expert. The stones cost much less than natural diamonds.
Bario Neal is a jewelry store in Philadelphia, Pennsylvania. It uses lab diamonds. All of the stones are either made with renewable energy or neutral use of energy through the carbon credit system. Credits pay for activities like planting trees, which capture carbon.
Social media posts show Millennials and Generation Zs proudly explaining the purchase of their lab-grown diamonds for sustainability and ethical reasons. But the sustainability of production is questionable. A high number of manufacturers are not transparent, or open, about their operations.
Many of the manufacturers are in India, where about 75 percent of electricity comes from burning coal. The companies use words like “sustainable” and “environmentally-friendly” on their websites. But they do not release reports on the environmental effects of their operations.
Cupid Diamonds, for example, says on its website that it produces diamonds in “an environmentally friendly manner.” But it did not answer questions about the sustainability of its operations.
Solar energy is quickly expanding in India and there are some companies, such as Greenlab Diamonds, that use renewables in their manufacturing processes.
China is the other major country producing laboratory diamonds. The largest makers did not return requests for comment. They also did not release details about their electricity source.
More than half of China’s electricity came from coal in 2023.
Paul Zimnisky is a diamond industry expert. He said few companies are honest about their supply chains and their use of renewable energy.
Zimnisky said a lot of companies claim to make an “environmentally-friendly product when they aren’t really doing anything that’s environmentally friendly.”
How it is made
Lab diamonds have been in production around seventy years. Producers treat carbon to high pressure and high temperature. The idea is to copy the natural conditions that form diamonds underground. But, nature spends at least one billion years to make a diamond. Lab diamonds are complete in a few weeks.
In the past, the stones were used mostly in industries like stone cutting, mining and dentistry tools.
Over time the laboratories, or foundries, have gotten better at making stones. Production costs have dropped as technology improves.
Companies now can manufacture as many stones as they want and choose their size and quality.
Diamonds, whether lab-grown or natural, are chemically identical and entirely made out of carbon. Experts can identify between the two using lasers to examine their atomic structures.
Marketing battle
The lab diamond is competing in the same market as natural stones. Worldwide, lab-grown diamonds are now 5 to 6 percent of that market. And, the public battle for customers has begun.
The natural diamond industry and some experts argue that lab-grown diamonds will not hold value over time.
Zimnisky predicts that natural diamonds will continue to sell in the thousands and tens of thousands of dollars for engagement rings.
And the human-made stone?
“Five to ten years into the future, I think there’s going to be very few customers that are willing to spend thousands of dollars for a lab diamond,” he said.
Page Neal said she co-founded Bario Neal in 2008 to “create jewelry of lasting value that would have a positive impact on people and the planet.”
She added: “We want to only work with materials that we feel like our clients would be proud to own.”
I’m Dan Novak.
Dan Novak adapted this story for VOA Learning English based on reporting by The Associated Press.
