Lab-grown gems put squeeze on diamond mining industry

[Redator]

De Beers, the world’s largest diamond miner by value, once convinced the world that true love needed a mined diamond. The precious stones weren’t just beautiful — they were a natural wonder, formed over billions of years deep within the Earth and extracted from far-off places by companies like De Beers itself. 

That mystique guaranteed mine diamonds a century of dominance. Today, that power is fading fast as lab-grown diamonds, identical in structure, sparkle, and hardness, are redefining what a “real” diamond means. 

These synthetic gems, created under high pressure and temperature in controlled environments, have gone from novelty to norm. They are widely available and increasingly affordable. And that’s rattling the foundations of a global industry.

Alarm bells

The central Chinese province of Henan now produces over 70% of the world’s lab-grown diamonds for jewellery. Many end up on the ring fingers of newly engaged couples, especially in the United States. 

In 2022, Walmart began selling lab-made stones. Two years later, they made up half its diamond assortment. Sales surged 175% in 2024 compared to the previous year, making the retail giant the second-largest fine jewellery seller in the country, just behind Signet.

The rapid growth has triggered alarm among some traditional players. Yoram Dvash, president of the World Federation of Diamond Bourses says synthetic diamonds now dominate new US engagement rings. He warned of an “unprecedented flood” of lab-made stones and called on the industry to unite in response.

(Click on image to enlarge) LEFT: Competitors Cecil Rhodes and Barny Banato join forces, creating De Beers Consolidated Mines in 1888. | RIGHT: Canadian geologist Dr. John Williamson sets up the Williamson mine in Tanzania, famous for its pink diamonds. (Images courtesy of De Beers Group.)

Not everyone sees an existential threat. Independent analyst Paul Zimnisky attributes the recent downturn to post-covid demand corrections, a luxury slowdown in China, and the disruptive ascent of lab diamonds. He remains cautiously optimistic, noting that lab-grown stones now account for over 20% of global diamond jewellery sales, up from under 1% in 2016.

For engagement rings, the market share is even higher. A 2024 survey of nearly 17,000 US couples by The Knot found that more than half of engagement rings featured a lab-made diamond, up 40% from 2019.

Zimnisky believes the industry’s survival hinges on branding. “If the industry gets lethargic and loses its way on the marketing front, all bets are off,” he told MINING.COM earlier this year.

Marketing reset

The spotlight has shifted back to De Beers. Once the architect of diamond scarcity and prestige, it’s now for sale. Parent company Anglo American (LON: AAL) slashed its valuation by $4.5 billion in just over a year. While no buyer has stepped forward, Botswana is reportedly pushing to take a controlling stake.

In May, De Beers shut down its lab-grown diamond jewellery brand, Lightbox, in a clear move to recommit to natural stones. It’s betting that a focused narrative, one rooted in rarity and romance, can revive demand and stabilize mined diamond prices.

Making that case is harder than ever. Lab-grown diamonds are chemically identical to their natural counterparts. Even trained gemologists need specialized equipment to tell them apart. The core difference now lies not in composition, but in story.

Lab-grown diamonds may be more affordable and visually identical to natural ones, but they typically don’t hold their value. While mined diamonds can resell for 20% to 60% of their original retail price, lab-grown gems often fetch just 10% to 30%, sometimes even less.

In a recent interview with The Wall Street Journal, De Beers CEO Al Cook predicted that as lab-grown diamonds become more abundant, their value will continue to fall. He warned they risk being seen more like low-cost imitations such as cubic zirconia or moissanite, which have different chemical compositions and are easily recognized as fakes.

The Luanda Accord was signed in June to pool resources and boost global marketing efforts for natural diamonds. (Image courtesy of the Natural Diamond Council.)

For buyers who spent thousands on lab-created stones, Cook didn’t sugar-coat the outlook. “I weep for you,” he said.

To sway a younger, more value-conscious generation, the industry has turned to fresh campaigns. De Beers and Signet launched “Worth the Wait” in October 2024, targeting so-called Zillennials — those born between 1993 and 1998 — with messaging about milestones, meaning, and the uniqueness of natural diamonds.

In June, a coalition of producing countries and De Beers inked the Luanda Accord, pledging 1% of rough diamond revenues toward a marketing fund run by the Natural Diamond Council. The NDC has since rolled out a new short film series and an educational website aimed at helping retail staff better articulate the case for natural gems.

A previous campaign that branded lab-made stones as “dupes” and urged buyers to “swipe left” backfired and was taken down.

Changing values

Even as traditionalists double down, the cultural ground is shifting. Young buyers care about origin and ethics. They want proof their purchase doesn’t fund conflict or exploit workers. Danish retailer Pandora switched entirely to lab-made diamonds in 2021, citing environmental and social concerns as well as lower prices.

Even experts need specialized equipment to tell the difference between quality lab-grown and mined diamonds. (Image courtesy of the Natural Diamond Council.)

Zimnisky notes that for economies “sensitive” to changes in the diamond market, such as Botswana, Canada, Namibia, Angola and Russia, the stakes are high. “This is a luxury product,” he said. “It needs to be merchandised as such. All stakeholders must contribute to shaping the message.”

The mystique of mined diamonds may be fading, but the desire for something meaningful remains. For the industry to stay relevant, it must shift from legacy to legitimacy, replacing old myths with modern values.

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