What is the Future of Lab Grown Diamonds?
Over the years, natural diamonds have been hyped as having eternity as one of their attributes. However, a 2019 Global Diamond Report seems to bring that to question. It would appear sales are falling and so is availability. Some of the reasons for this gloom is the rise of Gen Z and Millenials who are more particular about what they buy. The environment matters to them so they would rather not get involved in buying products that degrade the environment.
What does this mean for the future of lab-grown diamonds? Might they share the same fate as their natural twin? There is more debate along with research into LGD and its future. Before we get into that it should be clear what LGD or Lab Grown Diamonds are.
What are LGDs?
They are jewelry that undergoes the same process natural diamonds undergo over hundreds of years. The difference here though is that lab-grown diamonds undergo that process within a lab-induced environment so that they have an accelerated exposure to the processes that create diamonds.
According to the chief marketing officer of De Beers Subsidiary, Lightbox, these gemstones have the exact chemical and physical properties as natural diamonds. Melissa Crivillaro adds that a seed diamond is used to create the diamond.
So what you have is a gemstone with identical properties to natural diamonds but grown faster and with more precision so that you know exactly what kind of diamond you will end up with.
How is the Lab-Grown Diamond Industry Performing?
Vogue business quotes figures from 2020 to show the steady rise in demand for Lab Grown Diamonds. As many as seven million carats of LGD were grown in 2020. On the surface, this may seem dwarfed by the natural diamonds industry which clocked over 110 million carats in the same year.
A closer look however and a comparison of growth between 2018 and 2021 indicates a 3% increase. It is also evident that the big brands that originally concentrated on natural diamonds have also started to create their own diamond brands in the labs.
Lab Grown Diamonds Vs Natural Diamonds
There is no escaping this comparison as we investigate the future of
lab grown diamonds. It is a major determining factor. When a bury thinks of diamonds, the question would be what options do they have and which is better. We shall consider a few defining aspects in this comparison.
1. Quality: The market obviously would like to know which of the two would be of better quality. The short response to this is that it is a tie. Both natural diamonds and lab-created diamonds are subjected to the same certification process. Actually, it would be impossible for an untrained person to tell the 2 diamonds apart. In a way, there is no sense in comparing the quality of the precious stones even if one is made in a lab and another beneath the earth.
2. Environmental impact: This is a big aspect that is already at play in determining what is the future of lab-grown diamonds. There is increasing pressure on mining companies to limit the detrimental impact they have on the environment. However, this is something difficult to achieve. On the other hand, LGDs are being presented as the more environmentally friendly option. Some companies are even using captured carbon dioxide in the atmosphere to create diamonds. In essence, they are claiming to serve a similar function as trees in reducing the amount of carbon dioxide in the environment. Increased information about the threat of global warming from activities like mining seems to be sculpting a bright future for diamonds that can be grown without the heavy earth-moving equipment.
Closely related to this is the issue of blood diamonds that are believed to be acquired at the expense of human life. The natural diamond trade seems to be fueling conflict and raising ethical issues that are not the case with LGD.
3. Availability: Some people argue that natural diamonds are becoming scarce and this is a good thing because the value will go up. Another group however believes reduced availability will make natural diamonds unreliable investments because you would need to search harder to get them. Lab Grown Diamonds however can be grown fast and made available within weeks. It remains a subject that is up for debate whether this is a good or bad thing for the future of LGD.
4. Price: Since a lot more goes into mining natural diamonds, they are more expensive than LGD. When making investment decisions, however, it is important to take into account that the current target markets are the millennials and the Gen Z who do not own a lot of wealth. More of them will prefer the more affordable choice. This will create an increased demand for ab diamonds.
Future of Lab Grown Diamonds Beyond Jewelry
When you think of diamonds, you usually consider jewelry like engagement rings, necklaces, and so on. However, it is reported that lab-grown diamonds make about 90 percent of their revenue from non-aesthetic uses. There is demand for LGD within the industries. For example, it is preferred to metal in some applications because it has a lower frictional coefficient. It can reduce friction by 25%.
Originally, it was hard and expensive to use natural diamonds in such applications. However, right now with the availability of lab-grown diamonds that cost as much as 40% less than natural diamonds such applications are made possible.
Is the Future Bright for Lab Grown Diamonds?
When all is said and done, it is evident that these diamonds will have a bright future. They are an environmentally better option in the jewelry industry and they cost a lot less. The bigger picture however seems to point to lab-grown diamonds being applied more within the industrial sector for making machines that need less oil due to reduced friction.
It is no surprise that big diamond houses like DeBeers are opening up subsidiaries that concentrate on growing diamonds for the increasing market around the world. This may be a growing product, but the rate at which it is growing is encouraging.
