The Nasty Debate Over Lab Created Diamonds
There is a diamond tidal wave on the horizon, and rather than preparing for that wave the traditional mined diamond industry seems bent on convincing everyone that tidal waves are evil and should be ignored. That tidal wave is the coming flood of created diamonds on the world jewelry markets, and the traditional diamond industry is not handling things well at all.
Most recently, a heated debate on a major jewelry industry discussion group pitted traditional mined diamond dealers against retail jewelers who have opened their doors to the created diamond market. Several of the mined diamond dealers posted caustic accusations that lab created diamonds are “worthless”, “garbage,” are not real diamonds, that they damage the ecology by greater energy use, and that anyone who sells lab created diamonds is ripping off their customers.
As a result of the highly venomous efforts by these traditional diamond dealers to disparage the lab created diamonds and sellers, I spent some time researching these claims to fact-check their accusations. I will start with the complaint from the mined diamond dealers that created diamonds are not “real” diamonds, and selling these is ripping off customers.
Are lab created diamonds…real diamonds?
The problem with the first claim of created diamonds not being “real diamonds” was answered by none other than the United States Federal Trade Commission. The US Federal Trade Commission recently ruled that lab created diamonds are indeed diamonds. This matter was reported by Forbes magazine when they wrote:
“The Commission no longer defines a ‘diamond’ by using the term ‘natural’ because it is no longer accurate to define diamonds as ‘natural’ when it is now possible to create products that have essentially the same optical, physical, and chemical properties as mined diamonds,” the FTC ruled. Forbes August 2018
As a result, the first contention that lab created diamonds are not real diamonds is a false accusation by the traditional diamond industry. According to the FTC mined diamonds and lab created diamonds are both diamonds, period.
Do lab created diamonds use more energy and have more impact on the environment?
For this answer I am not going to rely on any jewelry or diamond industry sources so we can get an independent evaluation of this question. I turned to a well respected publication “Popular Science” in their article titled: 6 Things You Should Know About Lab Diamonds.
“In March, IIa opened the world’s largest diamond-growing facility in Singapore. It’s capable of cranking out more than 300,000 carats a year, using half the energy of diamond mining. Plus it has far less environmental impact.”
Since this issue of energy consumption and the ecological impact debate of mined-v-created diamonds seems to be a major issue, I went a step further to the research posted on the Yale University website: The science between synthetic diamonds and their positive impact on the environment Yale Tribune, November 2018
“However, while one of the largest producers of natural diamonds uses about 80.3 kilowatt-hours per carat over their mining operations, lab-grown diamonds are another story. They only require about 20-28 kilowatt-hours per carat. Therefore, less energy is used when manufacturing them, so the environment is more protected through this method.
Also, they produce fewer carbon emissions compared to natural diamonds. Natural ones require heavy machinery for their production and emit more carbon, so they impact the environment more. Thus, overall, synthetic diamonds are eco-friendlier.”
Clearly, the claim that lab created diamonds are not as ecologically friendly as mined diamonds is a false claim by the traditional diamond industry. Independent research shows us that, in fact, the opposite is true. Lab created diamonds use far less energy to produce, and have a far smaller carbon foot-print than mined diamonds.
Do lab created diamonds cost the same as a mined diamond?
Once again, I turned to independent sources, starting with the above referenced Popular Science article where it stated:
“Lab diamonds are identical to their natural counterparts and cost 30 to 40 percent less.”
We don’t have to rely on someone else’s resource on the issue of how much lower in price are lab created diamonds to comparable mined diamonds. For that we just need to go diamond shopping on the internet. Here are the results of two diamonds of the same quality: one lab created and one mined diamond.
Ecodiamond.com (lab created diamond)
1.00ct. F/VS1 Ideal Cut SKU# 153846688 IGI Grading Report: US$4,431.00
JamesAllen.com (traditional mined diamond)
1.00ct. F/VS1 Excellent Cut SKU:6617229 GIA Grading Report $6,540.00
The lab created diamond, of the same quality and better proportioning, is approximately 33% less in price than a mined diamond, confirming the information in the Popular Science report. According to the Federal Trade Commission both are genuine diamonds. Both are of the same quality with independent lab grading reports. But one is approximately 33% less in price than the other.
Which would you buy? Never mind, that is a rhetorical question right now. We have one more question to answer.
What about the future of the diamond industry?
This is where I realized why the traditional mined diamond industry is in such a panic, the very future of the traditional diamond industry is in jeopardy. Several diamond industry publications are predicting a shortfall in mined diamonds to industry demand in the near future. But if we move outside of the traditional diamond industry and into the formal mining industry publications, the issue is confirmed. From MiningReview.com: Lab-created diamond jewelry market forecast to grow to US$15Bn by 2035 Jan 15, 2019
“On a relative basis, gem-quality lab-created diamonds sold as jewelry have dropped in price by 30-40% over the last two-and-a-half years.
While natural diamonds currently represent an estimated 95% of the diamond jewelry market, the annual supply of natural diamonds is forecast to decline over the next four years and there is reason to believe that the trend will not significantly reverse course longer-term.
Given the scale of production capability, it is reasonable to assume that longer-term, the supply of lab-created diamonds is boundless, and the price of generic goods will be set by the lowest-cost producer”
This opinion is also shared by the most trusted diamond industry publication: Idexonline.com where they published this article: ABN AMRO Diamond Outlook: Lab-Grown Stones to Enter Growth Phase Jan 16, 2019
“We think that 2019 and 2020 will be the years that lab-grown diamonds take off and move from an introduction phase (2018) to a growth phase. Lab-grown diamond producers have been able to produce larger and better-quality lab-grown diamonds.
In a few years from now it is highly uncertain if natural diamonds will hold their value as always has been assumed.”
Clearly, both the mining industry and the diamond reporting industry recognize that lab created diamonds are quickly becoming the future of the diamond industry, and that mined diamond production is on the decline.
What does the fashion industry think about created diamonds?
Let’s face it, if the consumers don’t want created diamonds then the whole issue is moot. To investigate this I turned to Vogue magazine, one of the fashion world’s most trusted publications. In their article: Can Lab-Grown Diamonds Become A Girl’s Best Friend? Vogue 20 November 2018, they interviewed one of the world icons of fashion and gemstones. Here is what she said:
“It will be totally disruptive,” asserts Nadja Swarovski, matriarch of the legendary crystal manufacturer, which began cutting gemstones in 1965. “There’s that belief that diamonds are rare and precious, and I think it’s also going to be a generational thing. My mother would never buy a created diamond, but my daughters would only buy a created diamond.”
And the article carried it one step further…
“…in a survey by market research company MVI, the percentage of consumers willing to buy an engagement ring with a lab-grown diamond is steadily increasing, rising from 55 per cent in 2016 to almost 70 per cent in 2018.” (Vogue)
So 70% of consumers are willing to buy an engagement ring with a lab created diamond that the traditional mined diamond industry is trying to brand as “trash” “garbage” and a rip off to consumers.
But here are some of the comments from the traditional mined diamond group in the recent discussion:
“Buying a lab diamond is like buying a Fake Chanel purse vs a Real one. Same materials, not the same.”
“Lab created has no value, none. Those who sell are selling something worthless. A scourge on the industry.”
“I’d be little more than a prostitute to try and “sell” lab created crap.”
“DONT YOU SEE?? you are taking away food from the poorest people in the world. You are taking away the one meal those miners got all day.”
When I read these posts I could read nothing but desperation of a market segment in total spin control over a tidal wave they see coming over the horizon.
But in the cacophony of posts and responses, there was one that stood out from the rest as the voice of reason, assurance and that there is hope for the future:
“I feel like there is a place for everything… if someone wants a 1ct but cannot afford it why not offer a lab? As long as its disclosed, represented, and priced why not?
It is the same as if someone wants a lab ruby because it is their husband’s birthstone but they can only afford an ugly natural or a beautiful lab…
My jobs to make the world sparkle… I just make sure to do it ethically and honestly”
Now there is someone with a healthy attitude on the gemstone market in general, and one who is preparing to ride that tidal wave of lab created diamonds coming over the horizon…all the way to the bank!
Those from the traditional mined diamond industry using bullying and intimidation to create fear of that created diamond wave coming at them…
These people will eventually get swept away.