Before I change my name and flee to Panama, let me just say this about lab-grown diamonds: the received wisdom is baloney. They are not greener or more ethical than mined. They’re cheaper. Don’t buy them for any other reason. There. I’m off now.
The recent history of diamonds goes like this. Eighty billion dollars’ worth of jewelry sold in 2018. Ditto 2019. In early 2020 the pandemic hit. Sales fell off a cliff while everybody stayed home and ransacked the Internet for toilet paper. Then, a few months later, all stocked up on bathroom essentials and finding themselves still solvent, people started buying diamonds again.
“It happened quite suddenly,” says Paul Zimnisky, a top diamond-trade analyst. “There were signs of returning buyers in the third quarter, and then in the fourth, sales just took off.” Some dealers increased their sales by as much as 50 percent from the year before, and at the high end of the market, sometimes more than 100 percent. “It was pent-up demand for a luxury product,” Zimnisky says, “at a time when other choices, like foreign travel, just weren’t there.”
Sales boomed. They’re still booming. And that includes the new gem on the block: lab-grown.
Pressed for Cash
It’s no secret why people buy synthetic diamonds: price. In a survey cited by Forbes, getting a bigger stone for less money was the main reason for buying a synthetic.
The math is stark. I compared two diamonds available online. Each was a 1.01-carat ideal cut, F color, VVS2 clarity. Only an expert with the right equipment could distinguish them. Chemically they were the same mineral. Yet the natural stone cost $8,493; the synthetic, $2,650.
Diamonds are a feel-good buy. Resale prices are lousy for natural, but for lab-grown they’re more like zero. So the up-front price is the clincher.
But that’s not the claim you most often hear. The real marketing tailwind for synthetics comes from the perception that the stones are greener and more ethical than mined diamonds.
Take a recent story in The Washington Post. Pandora ditching mined diamonds for lab-grown ones, the headline announced. The story called Pandora the “world’s biggest jeweler.”
Huh? Pandora? No one shopping for a diamond would go to Pandora. They’re what the trade calls a fashion jeweler. Less than one percent of what they sell even has a diamond in it. “We use very few, and the ones we use are very small,” Johan Melchior, a company executive, told me from Copenhagen.
But that wasn’t the real point of the Washington Post story anyway. Its point was to trash mined diamonds, if not explicitly, then certainly by innuendo, linking Pandora’s action to a catalogue of supposed diamond-mining horrors.
The real marketing tailwind comes from the perception that the stones are greener and more ethical than mined diamonds.
Diamond miners helped create their own bad press, first by trying to duck the blood-diamonds scandal when it broke in 1998, then, later, by rigging the audit process meant to clean it up. The term “blood diamonds” refers to the multi-billion-dollar slave-labor mining operations run by guerrillas and mercenaries to pay for their wars in places such as Sierra Leone and Angola.
De Beers was still the Darth Vader of diamonds at the time, ruling its empire from the Death Star at 17 Charterhouse Street, London. Many enormities have been laid at that door, and buying dirty diamonds was among them. That disgraceful trade has dwindled, and was always a small fraction of all diamonds. But the reputational hangover endures, attentively nurtured in the marketing of synthetics.
The truth is that most mined diamonds come from large, modern, industrial operations, strictly regulated by governments. In Canada, the world’s third-largest diamond producer, where most deposits exist under Arctic lakes, mining companies can’t even start to drain the water until they’ve counted the fish, because when they are done, they have to put them back.
On the socio-economic front, the driver of a mine truck can make $100,000 a year. About half the non-professional workforce is indigenous. Not only that, a percentage of the royalty that mining companies pay the government goes to native groups as part of a revenue-sharing scheme—in one recent five-year period, more than $30 million.
And it’s not just mines. Botswana, the world’s top high-value-diamond gusher, muscled the well-known diamond sales called “sights” out of London. Now buyers come to Gaborone, the capital, filling its hotels and restaurants as they fly in to snap up the goods.
I remember all the moaning when the switch was announced. “It will kill the culture of diamonds,” one sightholder told me, staring desolately around his suite at Claridge’s. The next month he was on a plane to Gaborone.
Soon enough, so was everybody. That’s where Prince Harry got the three-carat stone for Meghan’s engagement ring, adding two smaller diamonds from Princess Diana’s collection to bulk it up. Keep this in mind when reading about Meghan’s devotion to lab-grown bling.
Green as Money
The term “lab grown” is less a description than a marketing coup. It makes a synthetic mineral produced in factories sound like something raised in a greenhouse by people in white coats with watering cans.
The mission is essentially industrial: make stuff, and make it fast. You can grow a diamond in a week and be home mowing the lawn while Mother Nature is still raking around in the magma for bits of carbon that take eons to form into a crystal.
As for the green utopia—the world’s biggest producer of synthetic diamonds is China. They make 10 billion carats a year. That’s roughly 100 times the entire global output of natural diamonds. Most of this cataract goes to drill bits and abrasives, but some four million carats flow into the jewel trade. It takes a stupefying amount of energy to make all that, but no problem: the plants can draw on China’s plentiful supply of coal-fired power.
According to a report prepared for the natural-diamond industry by environmental analyst Trucost, a division of S&P Global, it takes more than three times as much energy to make a one-carat polished lab-grown diamond as it does to produce its mined equivalent.
Five years ago, synthetics made up less than one percent of the gem-diamond trade. Now it’s more than four times that.
It takes a stupefying amount of energy to make all that, but no problem: the plants can draw on China’s plentiful supply of coal-fired power.
One American company, Diamond Foundry, based in San Francisco, reportedly plans to boost its annual output into the millions of carats. Diamond Foundry is the company Leonardo DiCaprio invested in after helping to savage the reputation of natural sparklers in the movie Blood Diamond.
Another company, WD Lab Grown Diamonds, has already sold out its production to the middle of next year. The Maryland company recently acquired a technical leader in the field, and claims it will now be able to produce bespoke stones at scale.
The ability to just turn on the tap and deliver exactly what your customer wants—maybe this month it’s G color, two-carat ovals—is the wet dream of gem-grade synthetics. Miners, by contrast, must sell whatever they dig up, including unpopular sizes and grades.
WD Lab Grown will provide buyers with certificates of “climate neutrality.” That’s admirable, but they can do it only by making offset investments—not because lab-grown itself is green.
Now Darth himself has joined the synthetics party. Element Six, a De Beers company, has set up a plant in Oregon to manufacture its synthetic Lightbox line. The pink diamonds are as cheap as chips.
When I lived in London, I often checked out jeweler Laurence Graff’s window in Mayfair, pressing my nose against the glass to gaze at some one-carat puff of rosy breath, mine for only $80,000. You can order one from Lightbox for a grand. But it’s not the same, and nobody thinks it is.
In the latest of its annual surveys of the diamond business, Bain & Company asked 496 people in America who’d either bought or received diamond jewelry in the previous 24 months what came to mind when they thought about lab-grown diamonds. “Artificial” and “Fake” led the way as the top two answers. Sustainable came sixth, and I couldn’t find a single other ethical issue among the responses.
My advice to the lab-grown buyer: Feel good about the price. That’s what you really came for.