[dropcap size=small]T[/dropcap]o the naked eye – or even under a jeweller’s loupe – they are indistinguishable from their natural predecessors. Physically, optically and chemically identical to natural diamonds, lab-grown diamonds are a marvel of science that are touted to be more environmentally friendly and value for money – and they are drawing shoppers who are placing increasing emphasis on ethical consumption.
Take Dr Loh May-Han. While the consultant anaesthesiologist and social-scene regular still prefers natural diamonds because of the associated romanticism and sentimental value, she is starting to take notice of man-made bling.
She tells The Peak: “There is the attraction of a bespoke stone that sparkles that much brighter and at a lower price point. For occasions such as balls and social events, I might consider lab-grown diamonds for their possibly clearer brilliance and value premise. The green direction that the world is headed towards makes lab-grown diamonds a qualified alternative. We want conflict-free, sustainable and transparent (both in terms of supply chain and physical clarity) gems.”
With projected growth from current total sales of US$150 million (S$204 million) to US$1.05 billion in 2020, as reported by The Washington Times, the man-made diamond industry is the elephant in the room that can no longer be ignored.
Lab-grown diamonds are not a new invention; the first gem-quality diamond was produced by General Electric in the 1970s, but it turned out yellow because of nitrogen contamination. Inclusions were also common. Now, with the advancement of technology, science has been able to grow clearer, bigger and more brilliant stones in 10 to 12 weeks.
Even though man-made diamonds represent just 2 per cent of global diamond production, sales are expected to increase – what with prices being 30 to 40 per cent lower than their natural cousins. More are hopping on the bandwagon in anticipation of growing market demand. Three years ago, local firm IIa Technologies opened a 200,000-sq-ft diamond-growing plant in Jurong. Said to be the world’s largest facility of its kind, it can grow up to 300,000 carats annually. IIa Technologies, which grows only the rarest and purest Type 2a diamonds, sells its creations in the US via its sister brand Pure Grown Diamonds.
San Francisco start-up Diamond Foundry, which has reportedly raised US$100 million, is backed by movie star Leonardo DiCaprio and Silicon Valley stalwarts like Twitter/Medium founder Evan Williams, former Ebay president Jeffrey Skoll and Sun Microsystems founder Andreas Bechtolsheim. Its pieces are sold on its website, as well as at luxury department store chain Barneys New York.
“We’re producing 100,000 carats a year now, and barely meeting demand. We’ve actually just raised our prices (by 15 per cent), and people are still buying as before,” Diamond Foundry CEO Martin Roscheisen tells us.
“Even the high-end luxury industry is starting to buy into aboveground diamonds. Consumers are smart – they know what’s real and what’s marketing.” He declined to name brands.
This year, Swarovski will launch a fine-jewellery collection featuring lab-grown diamonds alongside crystals. Pieces were worn by Hollywood star Emma Roberts at the 2017 Oscars. It sources stones from a German lab and Diamond Foundry, Forbes reported, and pieces will retail for between US$1,500 and US$50,000.
To try to win over jewellery fans loyal to natural diamonds, over 20 lab-diamond producers, including IIa Technologies and Diamond Foundry, have formed the International Grown Diamond Association to “collectively represent lab-grown diamonds on a global forum…so that there’s informed knowledge about the value, beauty and eco-advantages of highquality lab-grown diamonds”, a press release states.
Lab bling could be a real disrupter, say industry pundits. Paige Parker, a Gemological Institute of America (GIA)-certified gemologist, notes: “Just look back to when cultured pearls came on the market. In 1917, Cartier traded a natural pearl necklace valued at US$1.2 million for a Fifth Avenue mansion (now known as Cartier Mansion) owned by Maisie Plant.
“The value of natural pearls plummeted after the Depression and wars, and, with the abundance of cultured pearls. In 1957, Plant’s heirs auctioned her Cartier pearls for a mere US$170,000. Although natural pearls have recently regained top-tier pricing because of scarcity, that (recovery) took quite some time after cultured pearls disrupted the market.”
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NOTHING LASTS FOREVER
Faced with fiery potential competition, amid other factors, the natural diamond industry is reeling. In 2015, global sales of diamond jewellery dropped for the first time in six years, decreasing by 2 per cent to US$79 billion, reported The Financial Times. Recent sales figures from De Beers, which accounts for a third of global sales, are no less comforting. Its eighth sale cycle for rough diamonds last year – it goes through 10 every year – was down 29 per cent from the same cycle in 2016, from US$494 million to US$370 million.
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Once a bulletproof market honed by decades of promotion by De Beers – remember the slogan “A diamond is forever”? – the diamond engagement ring sector is fast losing traction with millennials who reportedly prefer to spend on experiences. It doesn’t help that the notion of conflict diamonds still resounds in mainstream consciousness, never mind that DiCaprio’s blockbuster Blood Diamond was released 12 years ago.
The natural diamond industry is striking back and revving up marketing in a bid to woo millennials, a generation who will reach their most affluent stage in 10 years. In 2015, the top seven natural diamond producers formed the Diamond Producers Association (DPA) to consolidate eforts. And they are serious about reclaiming resonance/ relevance: It increased its advertising budget by nearly five times, from US$12 million in 2016 to US$57 million last year.
“Young consumers love diamonds but we have to make sure that diamonds remain relevant to their lives and their aspirations,” says Jean-Marc Lieberherr, DPA chief executive.
“They look for meaning and authenticity in their lives, relationships and purchases. What is more meaningful and authentic than a billion-year-old diamond, what better way to celebrate a genuine connection, over and beyond rituals, status or luxury?”
“Our new communication platform ‘Real is Rare, Real is a Diamond’ aims to do just that and has been very well received by millennial consumers in the US. We recently launched our first campaign in India and will be launching in China this April.”
“What is more meaningful and authentic than a billion-year-old diamond, what better way to celebrate a genuine connection, over and beyond rituals, status or luxury?”
-Jean-Marc Lieberherr, DPA chief executive
The three countries are key diamond markets. He pooh-poohs the notion of synthetic diamonds being a credible alternative to natural ones. “They are essentially industrially manufactured products with no inherent value.”
Luxury brands such as Tiffany & Co, and Cartier have also been more vocal about their green initiatives, no doubt at least partly with a view to impress socially conscious consumers. Tiffany aims to have net-zero greenhouse gas emissions by 2050 and says it has contributed over US$34 million to the local economy of leading diamond-producing country Botswana, among other initiatives, according to its annual sustainability report released last October.
Meanwhile, Cartier has apparently stopped buying diamonds from Zimbabwe and gemstones from Myanmar because of both countries’ alleged human rights violations and child labour accusations. Both brands declined comment for this article.
NATURE VS NURTURE
Natural diamond production is projected to peak in the next two years, Bain & Company estimates, one reason being that the discovery of new large mines is unlikely. Even so, many industry insiders do not foresee lab-grown diamonds having a place in high jewellery. De Beers and GIA are selling detection machines to diamond buyers to help spot them, and fabricating their own so they know what they are up against.
“Bulgari will never turn to the synthetic diamond market and this applies to all stones,” a representative for the luxury jeweller tells The Peak. “The brand, our manufactory and our tradition do not allow such a choice. Moreover, our customers have become increasingly demanding… in fact, they ask for certification of stones.”
It is simply about offering choices to consumers, says New York-based independent diamond analyst Paul Zimnisky. “I can see both products existing in harmony, as long as there is proper disclosure to the consumer.” A number of jewellery fans we spoke to, such as socialites Fanty Soenardy and Serene Tan, remain faithful to natural diamonds because they hold an emotional attachment that has been honed since they were children.
Stephanie Lee, who manages her family’s investment holding company T.S. Lee & Sons, says: “Cultivated diamonds do not hold the same intrinsic value and ‘life’ of a natural mineral created by Mother Nature. I cannot get it out of my mind that it is not natural and, to me, anything that is not natural is ‘fake’. I’d rather go without diamonds.”
Still, never say never. Says Parker: “I remain old-fashioned… but people once said that about pearls, so, who knows? Truth is, if a lady wears an eight-carat lab-grown diamond that is DIF Type 2a, no one will know if it’s lab or natural, except the owner herself.”