Russia’s state-owned diamond miner, ALROSA, revealed recently that it was exploring whether to enter the lab-grown diamond sector. That action was met with surprise by many – because for years, the mined diamond industry has viewed lab-grown diamonds as a threat – rather than an opportunity.
But Element Six, a De Beers subsidiary, has been producing lab-grown diamonds for many years – albeit only for industrial and technological applications. Last year, there was some reporting in the media that Element Six was in discussions with Swarovski to supply the latter company with lab-grown stones for a jewelry line. The discussions ended up going nowhere, but it was another surprising indication that mined diamond companies are eying lab-grown diamonds – and perhaps for jewelry uses.
Why would diamond miners be considering such moves?
First, as we talk about frequently at AIDIA, the supply of diamonds at mining sites is dwindling – with no new major diamond finds on the horizon. Both analysts and diamond miners have reported this fact. With the growth of large consumer markets in countries such as India and China, there is some worry, long-term, about the supply of diamonds for the increased demand that’s coming.
Next, diamond miners understand what we at AIDIA do – the diamond cutting and polishing industry needs new supplies of rough gems to cut, to ensure its health and sustainability as an industry.
Finally, diamond miners can see the explosion of interest in responsibly sourced diamonds from consumers. Though consumers can now buy diamonds with traceable provenance from a responsible mine if they are willing to pay a premium – the vast majority of generic diamonds are still not traceable. That’s mostly because they are still traded many times before end sale to a consumer, and it’s been practically impossible for diamond or diamond jewelry suppliers or retailers to keep track of their origins. If these companies cannot determine where the diamonds were mined, they are unable to say with conviction about whether those who mined the diamonds were treated well or exploited. Nor are they able to affirm that the miners treated the land they disrupted in environmentally responsible ways.
Thus lab-grown diamonds offer diamond miners a ready-made product about which they can boast a responsible beginning – without the huge challenges of tracking millions of stones. We welcome our counterparts in the mined diamond world to the category.
As a former executive at a mined diamond company, who decided to sell lab-grown diamonds instead, my only question might be: “What took you so long?