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.”
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.
Gemological Science International (GSI) has issued a warning to the trade after coming across a “notable increase” in jewelry set with pink, yellow and brown lab-grown diamonds posing as natural.
The jewels, which have been submitted to the lab for grading, often contain synthetic stones mixed in with natural colored diamonds, Debbie Mazar, president and cofounder of GSI, explained Tuesday. Many of the undisclosed synthetics were type IIa, with a single nitrogen atom, and ranged in size from melee to 1 carat.
Additionally, some of the lab-grown diamonds were intentionally cut to mimic natural ones, GSI noted. The GSI observed several with fractures, pinpoint clouds, polish-overs and distinct brown grain lines, features found in natural diamonds, which would potentially enable the fraudulent stones to pass standard gemological evaluation, GSI said.
“The challenge arises as most jewelry-screening equipment in the market is designed to screen white, near-colorless diamonds,” Azar explained.
The advanced technology in diamond growth is contributing to increased success by growers in replicating natural diamonds more and more, GSI added.
GSI’s warning comes on the heels of several from other labs. In December, Italian grading lab Gem-Tech cautioned that it had encountered a number of lab-grown stones circulating bearing fraudulent inscriptions from the Gemological Institute of America (GIA) for natural stones. Last month, the International Gemological Institute (IGI) examined a 6.01-carat lab-grown with a GIA laser inscription for a similarly cut natural, while the GIA reported it was taking steps to combat the recent influx of lab-growns bearing fraudulent inscriptions from the lab by offering same-day report verification.
The International Gemological Institute’s laboratory in Tel Aviv recently detected a 6-carat lab-grown diamond that someone apparently was hoping to pass off as a natural stone.
The 6.01-carat, pear-shaped synthetic diamond was fraudulently inscribed with the Gemological Institute of America report number for a G-color natural diamond of the same size and shape, but with a few key differences, IGI said in a news release issued Tuesday.
First, the lab said, photoluminescence (PL) spectroscopy, which is now widely used by grading labs to separate natural diamonds from lab-grown stones and to identify diamond treatments, shows a wavelength peak of 737 nanometers in the diamond (see chart below).
This is an indicator that the diamond was grown in a factory using the chemical vapor deposition process.
IGI photoluminescence spectra The photoluminescence spectra for the 6.01-carat lab-grown diamond recently examined by the International Gemological Institute
Second, when examined under a microscope, IGI graders saw a carbon inclusion where the feather was indicated on the clarity plotting diagram in the GIA report.
They also noticed a cloud inclusion, resulting in IGI giving the lab-grown diamond a lower clarity grade than VVS1, the clarity grade of the natural diamond.
Lastly, there was a discrepancy between the depth of the diamond IGI examined and the depth noted on the GIA report.
“Everyone in our industry must be vigilant,” said IGI CEO Tehmasp Printer, who took over as head of the lab in October after Roland Lorie retired.
“As attempted fraud increases, the need for ongoing verification is a necessary step to protect consumers from purchasing misrepresented gems and jewelry.”
WD Lab Grown Diamonds, the second largest lab grown producer in the USA, has filed for bankruptcy.
The Washington DC-based company is the first major casualty of the plunge in lab grown prices.
It filed for Chapter 7 protection last Wednesday (11 October) in a Delaware bankruptcy court, with disclosed liabilities of $44m with assets of $3m.
WD pioneered chemical vapor deposition (CVD) diamonds since 2008 and had its own patented process.
In 2016 it produced its first 5 carat round brilliant diamond and in 2018, it set a record for the largest gem quality lab grown, at 9.04 carat.
In 2021 it acquired J2 Materials, and advanced materials and diamond crystal growth laboratory based in Chicago.
WD generated $33m of revenue last year, according to a Financial Times report. But the company has fallen victim to low prices and intense competition from China and India.
One of the world’s most popular types of rough diamonds has plunged into a pricing free fall, as an increasing number of Americans choose engagement rings made from lab-grown stones instead.
Diamond demand across the board has weakened after the pandemic, as consumers splash out again on travel and experiences, while economic headwinds eat into luxury spending. However, the kinds of stones that go into the cheaper one- or two-carat solitaire bridal rings popular in the US have experienced far sharper price drops than the rest of the market.
The reason, according to industry insiders, is soaring demand for lab-grown stones. The synthetic diamond industry has paid special attention to this category, where consumers are especially price-sensitive, and the efforts are now paying off in the world’s biggest diamond buyer.
The shift doesn’t mean engagement rings are about to go on deep discount — the impact is limited to the rough-diamond market, an opaque world of miners, merchants and tradespeople that is several steps removed from the price tags in a jewelry store.
However, the scale and speed of the pricing collapse of one of the diamond industry’s most important products has left the market reeling. Now, the question is whether the plunging demand for natural diamonds in this category represents a permanent change, and — crucially — if the inroads made by lab-grown gems will eventually spread to the more expensive diamonds that are typically dominated by Asian buying.
Industry leader De Beers insists the current weakness is a natural downswing in demand, after stuck-at-home shoppers sent prices soaring during the pandemic, with cheaper engagement rings having been particularly vulnerable. The company concedes that there has been some penetration into the category from synthetic stones, but doesn’t see it as a structural shift.
“There has been a little bit of cannibalization. That has happened, I don’t think we should deny that,” said Paul Rowley, who heads De Beers’ diamond trading business. “We see the real issue as a macroeconomic issue.”
Lab-grown diamonds — physically identical stones that can be made in a matter of weeks in a microwave chamber — have long been seen as an existential threat to the natural mining industry, with proponents saying they can offer a cheaper alternative without many of the environmental or social downsides sometimes attached to mined diamonds.
For much of the last decade, the risk remained unrealized, with synthetics eating away at cheaper gift-giving segments but making limited headway otherwise. That is now changing, with lab-grown products starting to take a much bigger bite of the crucial US bridal market.
De Beers has responded to weakening demand by aggressively cutting prices for the category known as “select makeables” — rough diamonds between 2 and 4 carats that can be cut into stones about half that size when polished, yielding centrepiece diamonds for bridal rings that are high quality, but not flawless.
De Beers has cut prices in the category by more than 40% in the past year, including one cut of more than 15% in July, according to people familiar with the matter.
The one-time monopoly still wields considerable power in the rough diamond market, selling its gems through 10 sales each year in which the buyers — known as sightholders — generally have to accept the price and the quantities offered.
Price drop De Beers typically reserves aggressive cuts as a last resort, and the scale of the recent price falls for a benchmark product is unprecedented outside of a speculative bubble crash, traders said.
In June 2022, De Beers was charging about $1,400 a carat for the select makeable diamonds. By July this year, that had dropped to about $850 a carat. And there may be more room to fall: the diamonds are still 10% more expensive than in the “secondary” market, where traders and manufacturers sell among themselves.
De Beers declined to comment on its diamond pricing.
One of the clearest signs of the traction being made by lab-grown diamonds is their share of diamond exports from India, where about 90% of global supply is cut and polished. Lab-grown accounted for about 9% of diamond exports from the country in June, compared with about 1% five years ago. Given the steep discount that they sell for, that means about 25% to 35% of volume is now lab-grown, according to Liberum Capital Markets.
The impact on De Beers was clear in the first half. The Anglo American Plc’s unit’s first half profits plunged more than 60% to just $347 million, with its average selling price falling from $213 per carat to $163 per carat. Its August sale was the smallest of the year so far.
De Beers has responded by giving its buyers additional flexibility. It’s allowed them to defer contracted purchases for the rest of the year of up to 50% of the diamonds bigger than 1 carat, according to people familiar with the situation.
While lab-grown diamonds are currently hurting demand for natural stones, the upstart industry is also suffering. The price of synthetic diamonds has plunged even more steeply than that of natural stones, and are selling at a bigger discount than ever before.
About five years ago, lab-grown gems sold at about a 20% discount to natural diamonds, but that has now blown out to around 80% as the retailers push them at increasingly lower prices and the cost of making them falls. The price of polished stones in the wholesale market has fallen by more than half this year alone.
De Beers started selling its own lab-grown diamonds in 2018 at a steep discount to the going price, in an attempt to differentiate between the two categories. The company expects lab-grown prices to continue to tumble, in what it sees as a tsunami of more supply coming onto the market, Rowley said. That should create an even bigger delta in prices between natural diamonds and lab-grown, helping differentiate the two products, he said.
“With the increase in supply we’ll see prices fall through the price point and reach a level where, long term, it does not compete with bridal because it comes too cheap,” said Rowley. “Ultimately they are different products and the finite and rarity of natural diamonds is a different proposition.”
A US advertising watchdog has called on e-tailer Agape Diamonds to make the origins of its synthetic and simulated stones clearer.
The recommendation came from the National Advertising Division (NAD) of BBB National Programs — a nonprofit that helps businesses self-regulate — after the National Diamond Council (NDC) challenged Agape’s claims, the NAD reported last week.
Agape’s promotional material, including how it was presenting products for sale on its website, did not clearly and conspicuously disclose the origins of its stones, the NDC had argued, according to the NAD. As such, the council claimed, the online retailer and lab-grown manufacturer was violating the Federal Trade Commission (FTC) guidelines on jewelry marketing.
Agape changed its advertising across its website and social media in response to the NDC’s complaint, and the NAD declared the company’s modified disclosures effective and consistent with the FTC rules. However, other online advertising lacked “clear and conspicuous” origin disclosure, the watchdog said.
Race to the Bottom? Retailers’ Lab-Grown Doubts
The NAD urged Agape to rectify this by including words such as “simulated” or “lab-grown” immediately before the words “diamond” or “stone,” with “equal conspicuousness so as to clearly disclose the nature and origin of the product and the fact that it is not a mined gemstone.”
Agape and the NDC were unavailable for comment on Sunday. In its advertiser statement to the NAD, Agape said it was “committed to accurate and truthful advertising, as recommended by NAD and as codified in the federal regulations and enforced by the FTC.”
The research documents by MRFR indicate that the “Synthetic Diamonds Market Research Report Information by Application, Product, Region, Type, and Manufacturing Process – Forecast Till 2032”, the Synthetic Diamonds market is predicted to grow substantially over the assessment timeframe from 2022 to 2032 at a healthy CAGR of around 7.80%.
The reports even share predictions regarding the market’s growing revenue share, which will likely reach USD 29.9 Billion by the end of 2032. As per the reports, the market was worth nearly USD 15.2 Billion in 2022.
The primary market factors accelerating market expansion include rising demand from the semiconductor and electronics sectors as well as increased demand for computer chips and other microchips used in many other types of electronics.
The increase in demand for synthetic diamonds from the semiconductor and electronics industries is the primary factor behind the growth of the global market for synthetic diamonds. The increase in disposable money among the general population benefits the market.
The World Jewellery Confederation (CIBJO) and the International Grown Diamond Association (IGDA) have agreed to collaborate to protect consumer confidence around synthetic diamonds.
The organizations have signed a memorandum of understanding (MoU) calling for the pair to develop standards, operating principles and terminology for lab-grown diamonds, they said Monday. IGDA president Joanna Park-Tonks will sit on CIBJO’s laboratory-grown diamond committee, which has created a “Laboratory-Grown Diamond Guideline” governing standards for trading and handling synthetic stones.
The honest and accurate presentation of sustainability issues is a current focus for CIBJO’s laboratory-grown committee and was an element during the discussions between CIBJO and IGDA, the organizations said.
“We have had open lines of communication for some time already, and IGDA did participate in the public review before we released the ‘Laboratory-Grown Diamond Guidance’ document in 2021,” said CIBJO president Gaetano Cavalieri. “Over the past several years, the laboratory-grown diamonds sector has grown into a large and a prominent part of our industry, and we all have a vested interest in each other’s success.”
The signing took place on Sunday during the National Association of Jewellers (NAJ) Summit in Birmingham, UK.
De Beers’ Lightbox lab-grown diamond brand is trialing sales of engagement rings, marking a major shift for the company, which previously insisted synthetic stones were not a product for important milestones.
The retailer is publicizing lab-grown diamond engagement rings on its home page, promising a “stress-free and risk-free” shopping experience. “Our cutting-edge technology ensures each of our lab-grown diamonds are quality guaranteed,” the site reads, with the marketing line: “Because great chemistry deserves great chemistry.”
A link takes viewers to a page listing 16 items featuring regular Lightbox lab-grown diamonds, or stones from the brand’s Finest line, which have higher color and clarity. The standard collection usually sells for $800 per carat plus the cost of the setting, while Finest retails at $1,500 per carat. The selection includes white, pink and blue stones, with prices ranging from $500 for a three-stone ring to $5,000 for 2 carats.
Lightbox was unavailable for comment on Sunday, but told Women’s Wear Daily (WWD) and JCK it was running “a small in-market test of consumer preferences in the lab-grown diamond engagement ring segment.”
When De Beers launched Lightbox in 2018, Bruce Cleaver, the miner’s CEO at the time, presented lab-grown as a product that “may not be forever, but is perfect for right now,” claimed there was “no real emotional value in lab-grown diamonds, because they’re not unique,” and said the stones did not warrant grading. It later debuted the Finest line, introduced stones larger than 1 carat, and started declaring the cut quality, color and clarity of its stones.
Diamonds have long been revered for their beauty, rarity, and association with luxury. However, traditional diamond mining comes with ethical concerns and environmental impacts. In recent years, laboratory-grown diamonds have emerged as an alternative, marketed as a sustainable and eco-friendly choice. This article explores whether laboratory-grown diamonds truly live up to their claims of sustainability and environmental friendliness.
The Process of Laboratory-Grown Diamonds: Laboratory-grown diamonds, also known as synthetic or cultured diamonds, are created in controlled environments using advanced technology. They are produced through two primary methods: High-Pressure High-Temperature (HPHT) and Chemical Vapor Deposition (CVD). Both methods involve replicating the natural conditions that cause diamond formation but in a shorter time frame.
Environmental Impact: a) Land Disruption: Traditional diamond mining often requires extensive land clearing and excavation, leading to habitat destruction and soil erosion. In contrast, laboratory-grown diamonds are produced in labs, eliminating the need for land disruption.
b) Energy Consumption: The production of laboratory-grown diamonds does require significant energy inputs, mainly in the form of electricity. However, advancements in technology have made the process more efficient, reducing energy requirements over time. Renewable energy sources can also be used to power these facilities, further minimizing their carbon footprint.
c) Water Usage: Traditional diamond mining can consume substantial amounts of water, contributing to local water scarcity and ecosystem degradation. Laboratory-grown diamond production generally requires significantly less water, making it a more environmentally friendly option.
d) Chemical Usage: While the production of laboratory-grown diamonds involves the use of chemicals, the industry is continually striving to reduce their environmental impact. Responsible manufacturers are working on developing greener chemical processes and minimizing the use of harmful substances.
Ethical Considerations: Traditional diamond mining has long been associated with human rights issues, including exploitative labor practices and conflicts (so-called “blood diamonds”). Laboratory-grown diamonds, on the other hand, offer a more transparent and traceable supply chain. Consumers can be confident that their diamonds are not contributing to human suffering or funding conflicts.
Long-Term Sustainability: a) Repurposing Waste: Laboratory-grown diamond production generates significantly less waste compared to mining. Additionally, by-products from the manufacturing process can be repurposed, further reducing the ecological impact.
b) Circular Economy: As laboratory-grown diamonds gain popularity, a potential future advantage lies in their ability to be recycled and repurposed. This aligns with the principles of a circular economy, where materials are reused rather than discarded.
Conclusion:
Laboratory-grown diamonds offer an alternative to traditional diamond mining that addresses many of the ethical and environmental concerns associated with the industry. While there are energy and chemical inputs involved, the overall impact is significantly reduced compared to mining. Furthermore, the transparency and traceability of laboratory-grown diamonds provide assurance to consumers seeking an ethical and sustainable choice.
As with any industry, continuous improvements are needed to enhance the sustainability of laboratory-grown diamond production. Manufacturers should prioritize the use of renewable energy, minimize chemical usage, and explore recycling options. By doing so, laboratory-grown diamonds can truly become a more sustainable and eco-friendly option, offering consumers the beauty and luxury they desire without compromising the environment or human rights.
Lightbox has promoted Adam O’Grady to the newly created role of chief operating officer, effective March 27.
The executive will lead all aspects of supply chain and manufacturing activity for the De Beers-owned lab-grown diamond company, it said last week. These include diamond synthesis and jewelry manufacturing, cutting and polishing, and research and development.
O’Grady has been general manager of the Lightbox lab since 2019. In addition to his new responsibilities, he will continue to oversee operations and engineering at the company’s advanced manufacturing lab in Gresham, Oregon, where he is based.
“He is a transformational leader with deep knowledge of the lab-grown diamond category,” said Lightbox CEO Antoine Borde.
Prior to joining Lightbox, O’Grady spent his two-decade professional career at Element Six, De Beers’ industrial super-materials and synthetic-diamond business. He served in a series of general management and senior project roles in South Africa, China and the UK. In 2019, he oversaw the design and construction of Lightbox’s $94 million manufacturing lab in Gresham, which opened in October 2020.
As of 2021 the laboratory-grown diamond trade market was estimated to be worth around $1.9 billion, according to a report by Frost & Sullivan.
This market is expected to grow significantly in the coming years, with some estimates suggesting that it could reach a value of over $15 billion by 2035.
laboratory-grown diamond trade has been growing steadily in recent years. There are several factors driving this growth.
Price: Laboratory-grown diamonds are typically less expensive than natural diamonds, which makes them an attractive option for consumers who are looking for high-quality jewelry at a more affordable price.
Ethical concerns: Some consumers are hesitant to purchase natural diamonds due to concerns about ethical issues such as conflict diamonds. Laboratory-grown diamonds are considered to be a more ethical alternative, as they are produced in a controlled environment and do not have the same potential ethical issues as natural diamonds.
Environmental concerns: The process of mining natural diamonds can have a significant environmental impact. Laboratory-grown diamonds are generally considered to be more environmentally friendly, as they do not require mining.
Advancements in technology: The technology used to produce laboratory-grown diamonds has improved significantly in recent years, making it easier and more cost-effective to produce high-quality diamonds. All of these factors have contributed to the growth of the laboratory-grown diamond trade, and it is expected to continue to grow in the coming years.
The answer is not yet: It is worth noting that natural diamonds still hold a significant share of the diamond market, and it remains to be seen how much of an impact laboratory-grown diamonds will have on the industry as a whole over the next decade.
Laboratory grown rough diamond type 2A carbon crystal.
The main difference between a natural mined diamond and a laboratory grown diamond is their origin. Natural diamonds are formed deep within the Earth’s mantle under extreme heat and pressure over millions of years, while laboratory grown diamonds are created in a controlled environment in a laboratory setting. Some other differences between natural mined diamonds and laboratory grown diamonds include:
Cost: Laboratory grown diamonds are generally less expensive than natural mined diamonds, as they don’t require expensive mining and extraction processes.
Clarity: Laboratory grown diamonds are generally more consistent in terms of their clarity, as they are grown under controlled conditions. Natural mined diamonds can have inclusions or blemishes, which can affect their clarity and value.
Size and Colour: Laboratory grown diamonds can be grown to larger sizes and in a wider range of colours, which may not be as easily available in natural mined diamonds.
Environmental impact: The environmental impact of laboratory grown diamonds is generally considered to be lower than that of natural mined diamonds, as mining can have a significant impact on the environment.
Rarity and Value: Natural mined diamonds are still considered more rare and valuable than laboratory grown diamonds, due to their long history and cultural significance. Ultimately, whether someone chooses a natural mined diamond or a laboratory grown diamond may depend on their personal preferences and priorities, such as environmental concerns, budget, or the desire for a natural, unique stone.
It is worth noting that both natural mined diamonds and laboratory grown diamonds are chemically and physically identical, and both can be certified and graded by independent gemmological laboratories based on the same criteria.
Martin Rapaport recently released an incendiary memo to the diamond and jewelry industry calling on them to stop doing business in lab-grown diamonds (LGD), which he characterized as “synthetic” and “fraudulent.”
He also claimed those selling LGD were “operating dishonestly and unethically” and trading short-term opportunities at the expense of those that are “certain and sustainable.”
Rapaport is the ultimate industry insider, and there’s no question about which side his bread is buttered on. As chairman of The Rapaport Group, his company is a portal for information about and services to the diamond industry, including the Rapaport Price List, which it claims is the industry’s primary source for diamond price and market information, and an online diamond trading network, RapNet.
In a request for comment, a Rapaport representative shared the memo but added no additional comment.
Rapaport wrote:
“The greatest challenge facing the diamond trade is greed. Our trade is willfully destroying the underlying value of diamonds as a store of value through the marketing, promotion and sale of synthetic diamonds as a replacement for natural diamonds”
And he added, “Essentially, the diamond industry is trading short-term, unsustainable profits for the reputation of diamonds as a store of value.”
Then he went further, “Many – if not most – in our trade are operating dishonestly and unethically by failing to make full disclosure about the value retention of synthetic diamonds.”
And his memo concluded, “The Rapaport Group does not facilitate the sale of synthetic diamonds in any way. We believe they are a fraudulent product because of how they are sold. They are also a threat to the fundamental message of diamonds.”
This memo followed a submission to the Responsible Jewellery Council (RJC) in December 2021, where he pointed to Zales, James Allen, Jared, Diamond Direct (all Signet brands) and Brilliant Earth as not providing full disclosure about the LGD jewelry they sell. “Consumer expectations are not being managed honestly by unethical retailers,” he claimed.
According to lawyer Milton Springut, partner at Moses Singer, Rapaport’s disparaging and potentially injurious claims against lab-grown diamonds and the parties who do business in them probably don’t violate federal or state liability laws.
But Rapaport’s words are ill-chosen, and his claims are without merit, according to experts I spoke with.
Synthesized But No Less Real Lab-grown diamonds may be synthetic, as in made by man, but they are just as “real” as a natural diamond, as defined by the FTC. A diamond, no matter its origin is “a mineral consisting essentially of pure carbon crystallized in the isometric system. It is found in many colors. Its hardness is 10; its specific gravity is approximately 3.52; and it has a refractive index of 2.42.”
While lab-growns that meet the above criteria can be labeled as a “diamond,” the FTC also ruled that their man-made origin must be clearly disclosed.
So it requires marketers must precede the word “diamond” with “equal conspicuousness” such words as “‘laboratory-grown,’ ‘laboratory-created,’ ‘[manufacturer name]-created,’ or some other word or phrase of like meaning, so as to disclose clearly the nature of the product and the fact it is not a mined gemstone.”
It took a little while for some involved to find their footing under the new FTC guidelines, but now it seems all companies and retailers trading in lab growns have gotten on board and clearly, responsibly and honestly disclose the man-made, laboratory-grown origins of their stones.
That’s why Rapaport’s word choice of “synthetic” is over the line, implying that lab-grown diamonds are “simulants,” on the order of CZs or moissanite that may have a diamond-look, but are distinctly different in their physical properties and chemical composition.
“It’s an intentionally pejorative term because he is desperately trying to hold on to the tradition of mined diamonds,” said Marty Hurwitz, founder of market-research firm MVI Marketing LLC (THE MVEye) that specializes in the gem, jewelry and watch industries since 1987.
“One could argue using the term ‘synthetic’ may cause harm to lab-grown businesses, but it is clear that people who use the word are using it in a denigrating fashion,” he continued.
Hurwitz also notes the Gemological Institute of America (GIA), a non-profit educational and research organization that is the industry’s primary source for grading stones, doesn’t use the term “synthetic” any longer. It provided a limited grading program for lab-grown diamonds since 2007, then expanded and elevated it in 2020 as LGDs gained more industry and consumer acceptance.
GIA’s chief executive Susan Jacques described its decision as the natural evolution of the diamond market.
“We are responding to consumer demand,” she stated. “We want to make sure that consumers are educated, that we can protect their trust in the gem and jewelry industry as well as the products they are buying. As consumers adopt this new category, it’s important that we evolve with the new consumer.”
Value Is In The Meaning Rapaport’s rage against lab-grown diamonds seems to hinge on the fact that having an equivalent competing product in the market is causing the price of mined diamonds to fall. That’s the natural economic law of supply and demand.
And given that the prices of lab-grown diamonds are steadily falling, it is putting downward pricing pressure on mined diamonds too, reports diamond industry analyst Edahn Golan, though mined diamonds are experiencing a more moderate decline.
Then Rapaport goes one step further to claim that a mined diamond is a repository or “store of value” and that retaining, even increasing, its monetary value over time is part of the promise with purchase. This is patently false, both Hurwitz and Golan affirm.
“There is limited to no investment value in diamonds,” Hurwitz said. “Some categories of mined diamonds are investment grade and go up in value, but most diamonds depreciate faster than a car leaving the showroom. The average consumer has been fed a marketing myth, the greatest marketing story ever told. Most consumers never find out the truth because they don’t resell their diamonds.”
Golan added that jewelers have perpetuated the myth by offering a trade-in, so a purchaser of a $2,000 diamond ring can get that back in credit if they return to purchase a bigger, more expensive stone.
“I’m hearing the big trend in America now is for people who want to upgrade their engagement ring decide to keep their original stone and have it made into something else, like a pendant,” he said.
People hold onto their stone because of its sentimental, symbolic value, which is where the actual value lies, as Warren Buffett said, “Price is what you pay. Value is what you get.”
DeBeers tried to equate the two with its rule that a man should pay two-to-three months’ salary on an engagement ring. But ironically, that’s turned back on the industry because, with a lab grown, he can buy a bigger, more impressive stone that speaks even louder of his love for her when he pops the question.
Nothing Unethical, Fraudulent Or Dishonest Selling Lab Growns Rapaport goes too far when he suggests that there is something unethical, fraudulent or dishonest in selling lab-grown diamonds.
“The idea that diamonds are a store of value is a fundamental component of diamond demand. Consumers are being misled by retailers who sell man-made diamonds without full disclosure. The default assumption among consumers is that man-made diamonds will appreciate over time, even though the opposite is true,” he stated in his RJC filing.
One could argue that what is unethical, fraudulent and dishonest is suggesting that a mined diamond retains, even grows in monetary value.
“Rapaport is thinking like a diamond trader. Trading prices move up and down with the market. When they go up, it’s good; when they go down, it’s bad,” Golan said, noting that the increasing availability and consumer demand for lab growns is moving the needle for mined diamonds in the wrong direction.
Unlike traders, retailers think about cash flow, margins and turns. And this is where lab-grown diamonds have the edge.
“Jewelry stores hold loose diamonds on hand and the margins on loose natural diamonds is around 36%, while the margin for LGD was 54% at the end of December. And if it takes a retailer a year to sell a mined stone, but it only averages seven months to sell a lab-grown, a retailer will make more money at the end of the year,” Golan explained.
Hurwitz rhetorically asks, “Should we tell the consumers who are walking into our stores asking for lab-growns to go away? Should we say, ‘We don’t want to sell you this product that means incredibly high margins and profits for us and incredibly high value to you?’”
Retailers that trade in lab-growns are transparent and honest about the origin of their stones. The FTC requires it. There is nothing unethical, fraudulent or dishonest for a retailer to sell a customer what they want at the price they want to pay and to make money in the process.
“Half the diamonds are sold in the United States, and 50% of the business in the United States is bridal. The natural diamond industry is losing a chunk of that ‘Holy Grail’ to lab growns. The industry has to adapt to the changing world. It’s a combination of a cultural and business change that are driving each other,” Golan shared.
Can’t Turn Back The Clock “Rapaport has a tremendous self-interest in seeing the mined diamond business continue to thrive,” observed Hurwitz. “He’s trying to ensure that things never change. He wants to hold onto the tradition, but that’s futile.”
While Rapaport may be trying to valiantly to save the mined diamond industry, he may be doing more harm than good.
“The good news for the lab-grown diamond industry is that he appears to be going off the rails in his attacks, and as a result, fewer and fewer people are listening to him,” Hurwitz said.
“There is a consumer revolution happening because of lab-grown diamonds. As an industry, we must embrace the change and give consumers a choice.” he continued.
“Rapaport just wants to tell everybody that this product is good and that is bad. But the only voice that matters is the consumer. And the consumer is organically and very virally embracing this new product.”
India, which cuts or polishes about 90% of the diamonds sold in the world, is ramping up sales of laboratory-made gems as demand from the US surges and they become more accepted in other markets.
Exports of polished lab-grown diamonds may double in the current financial year started April 1 from $1.3 billion in the prior year, Vipul Shah, vice chairman of the Gem & Jewellery Export Promotion Council, said in an interview. “We have a huge potential to grow exports to $7 billion-$8 billion in the next few years on the back of US demand and acceptability in the UK and Australia,” he said.
“It is going to be treated as a fashionable jewelry, which is affordable to the youngsters, and that’s the way the market is going to shift,” Shah said.
Diamonds grown in labs represent a small portion of the market currently — India shipped nearly $24 billion of polished diamonds mined naturally last year. Still, the much cheaper variety has been growing its share as it has the same physical characteristics and chemical makeup as mined stones, with experts needing a machine to distinguish between synthesized and mined gems.
Lab-made diamonds are developed from a carbon seed placed in a microwave chamber and superheated into a glowing plasma ball. The process creates particles that crystallize into diamonds in weeks.
Exports of polished lab-grown diamonds from India jumped about 70% in the April-July period to $622.7 million, while those of cut and polished mined diamonds fell around 3% to $8.2 billion during the same period, GJEPC data showed.
One advantage of the man-made gem is that it has a tracking system that helps monitor the supply chain and maintain consumer confidence in the gems.
“Commercial gem-quality earth-mined diamonds are being replaced completely by lab-grown diamonds,” said Ritesh Shah, director at ALTR, one of the first global lab-grown brands to start business in India. The product’s affordability, low carbon-footprint, size and fine quality offer a big draw for buyers, with the US the front-runner in the shift in consumer behavior, he said.
From a handful of companies growing diamonds in labs in the mid-2000s, there are now about 25 such growers in India, he said. The country contributes about 15% of the global production of lab-grown diamonds, according to the GJEPC.
Pandora, the world’s biggest jeweller, is launching a collection using exclusively lab-made diamonds in the US and Canada as part of the company’s strategy to eliminate mined gems and create more affordable products with less associated emissions.
The Danish company, which plans to make its operations carbon neutral within three years, said the collection is the first one crafted with 100% recycled silver and gold.
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“This brings greenhouse gas emissions of the collection’s entry product – a silver ring with a 0.15 carat lab-created diamond ($300) – down to 2.7 kg CO2e, which is equal to the average emissions of a t-shirt,” Pandora said.
The flagship product, a one carat lab-created diamond set in a 14 carat solid gold ring and sold for about $1,950, has a footprint of 10.4kg CO2e, which is less than the average emissions of a pair of jeans.
The jeweller, best known for its charm bracelets, has committed to craft all its pieces from recycled silver and gold by 2025.
Pandora launched its first Pandora Brilliance collection using only man-made diamonds in the UK last year.
“Lab-created diamonds are just as beautiful as mined diamonds, but available to more people and with lower carbon emissions,” chief executive officer Alexander Lacik said in the statement.
World’s top jewellery maker Pandora ditches mined diamonds The Danish company, best known for its charm bracelets, already doesn’t include mined diamonds in most of its pieces. (Image courtesy of Pandora.) While producing diamonds is energy-intensive, Pandora said its gems would be made using only renewable energy.
Since 2011, when prices peaked thanks to China’s younger shoppers, diamonds have faltered. Lab-grown stones, initially priced confusingly close to the real thing, posed a challenge.
Top diamond makers reacted to the new kind of diamonds, widely embraced by young consumers as they look identical to mined stones, by launching a joint marketing campaign.
Under the motto “Real is Rare”, the Natural Diamond Council (formerly the Diamond Producers Association), which groups the world’s leading diamond companies, launched a series of film-like spots targeting millennials — those born between 1981 and 1996.
Failing that, they begun selling man-made diamonds themselves. Anglo American’s De Beers created the Lightbox brand to sell alternative diamonds for a fraction of the price of the mined ones.
Ethical concerns Despite the establishment of the Kimberley Process in 2003, aimed at removing conflict diamonds from the supply chain, experts say trafficking of precious rocks is still ongoing.
Miners and world famous jewellers including Tiffany & Co, have come up with innovative ways of certifying their stones as ethically mined, mostly based in blockchain technology.
In 2020, the New York-based company began providing customers with details of newly sourced, individually registered diamonds that trace a stone’s path all the way back to the mine.
