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The five Cs of diamonds, and why miners hate synthetic gems

What value does a diamond have? Jewellers rate the brilliance of a diamond based on four factors, known as the ‘four Cs’. Colour, cut, clarity, and carat value decide the price tag for each unique gem, but a new challenger approaches. As Matt Farmer discovers, the mass production of synthetic diamonds has given clarity to a fifth ‘C’: cost of production.

Artificial diamonds have no visible, structural, or chemical differences from those produced in the ground over millions of years. However, manufacturers can create synthetic diamonds in a lab in one month, cutting out mining and shipping entirely.These synthetic stones occupy a relatively small section of the jewellery market, but their lustre has rapidly grown. Earlier this year, one large jewellery manufacturer announced that it would stop using mined diamonds entirely, opting to focus on manufactured stones.

In some eyes, “organic diamonds” retain a special shine, and jewellery marketing often focuses on the story of its gems. Has the synthetic lustre of manufactured diamonds started to outshine mined products?

The purposes of a diamond
Mass manufacturing of diamonds began in the 1940s. Engineers used a technique of applying extreme heat and pressure to “diamond seeds”, reliably creating high-quality small diamonds for industrial processes. However, the size of production and the size of the product both proved difficult to scale up.Since then, new methods have allowed manufacturing to grow. One technique uses small explosions to create “detonation nanodiamonds”, too small for jewellery but useful for industrial purposes. Elsewhere, the UK-based De Beers Group uses extremely hot vapour to create diamonds on target surfaces.

The story of diamonds is inseparable from that of the De Beers Group, which is mostly owned by Anglo-American. The company built a near-monopoly on diamond extraction during the industrial revolution, with massive investments in South Africa. Using several underhand tactics, including market manipulation and secret deals, the company maintained this market control until the 1980s.

Around then, newly discovered diamond deposits in Australia and Canada refused to sell to De Beers, puncturing the company’s dominance. The independence of these mines came alongside a growing negative view of the company, as well as news of the conditions endured by diamond miners.These negative perceptions have lingered, fuelling the increase in lab diamonds destined for jewellery. Ethical, sustainable, and safe diamond mines operate in a tarnished industry. Synthetic diamonds remove consumer worries over these factors, and offer sustainability in a greener world. In 2020, labs produced six to seven million carats of diamonds.

However, this seems tiny compared to the 111 million carats that came out of the ground at the same time. Diamonds still need jewellers and auction houses, where De Beers retains significant power. In 16 days near the start of 2021, the company earned approximately $663m from sales of rough diamonds. But the growth of synthetic diamonds has proved impossible for the company to ignore.

“A product of technology” versus “The miracle of a natural diamond”
The De Beers Group website hails “the miracle of a natural diamond”, even though the company has dealt in synthetic diamond jewellery since 2018. Subsidiary company Lightbox Jewelry exclusively sells synthetic stones made by another De Beers company, Element Six.Element Six has made diamonds for industrial applications since 1959. For the following 59 years, its products consisted solely of items such as mining drill heads and metalworking tools. Recycling and materials company Umicore holds a minority stake in one of Element Six’s arms, possibly explaining its preference for industrial applications.

Nevertheless, in the company’s 60th year, Element Six began creating diamonds destined for jewellery. A De Beers spokesperson would not say what percentage of its jewellery diamond sales come from synthetic gems. However, they explain that Element Six remains “a very small business compared with our core natural diamond business”.

The market research we undertook prior to launching Lightbox Jewelry showed that consumers were attracted to lab-grown diamonds as fashion jewellery.
They continue: “The market research we undertook prior to launching Lightbox Jewelry showed that consumers were attracted to lab-grown diamonds as fashion jewellery and at a price point that reflected the cost of production for a product of technology.
“Our research also showed that consumers saw lab-grown diamonds and natural diamonds as different products, suitable for different occasions, so Lightbox supports this differentiation by offering something distinct from, and additive to, our core natural diamond business.“As a global leader in the technology used to create lab-grown diamonds through our Element Six business, we were able to offer high-quality lab-grown diamond jewellery at a price point in line with this consumer interest.”

The last stronghold of mined diamonds
According to the US Geological Survey, 90% of diamonds used in US industries come from labs. Simultaneously, most geological diamonds used in industrial processes come as a byproduct of producing mining gems for jewellery. The customisability of lab-grown diamonds makes them ideal for the needs of industry.Despite being “a product of technology”, consumer attraction to lab-grown diamonds has also increased, and companies have taken note. In May 2021, jewellery company Pandora announced it would use only synthetic diamonds.

Diamonds are not only forever, but for everyone.
Alexander Lacik, Pandora CEO, said at the time: “[Lab-created diamonds] are as much a symbol of innovation and progress as they are of enduring beauty and stand as a testament to our ongoing and ambitious sustainability agenda. Diamonds are not only forever, but for everyone.”
No geologist could tell the difference between synthetic and geological diamonds, but De Beers can for two reasons. Firstly, Element Six etches each lab-made diamond with an microscopic logo, meaning they can never be mistaken for those pulled from the ground. Second, perhaps more importantly: geological diamonds are the ones with the higher price tag. The difference lies entirely within the marketing.
The most successful marketing campaign in history?
Lacik’s words echo De Beers’ infamous slogan, which touches every facet of the diamond market. Advertising agencies dream of mimicking its success, while regarding it as perhaps the most successful marketing campaign of all time.The unmatched toughness, clarity, and conductivity of diamonds has always invited industrial demand. But until relatively recently, diamond jewellery remained out of the question and outside the desires of all but the ultra-rich.

In 1938, De Beers employed the NW Ayer marketing agency to give diamonds a mass market appeal. The company wanted to create demand for their more expensive, higher quality stones over more affordable gems.

US customers consumed three-quarters of all De Beers’ diamonds for engagement rings.
At the time, US customers consumed three-quarters of all De Beers’ diamonds for engagement rings. However, the Great Depression halved sales since the end of World War One. In Europe, economic difficulties and a looming war made jewellery a hard sell, so diamond rings remained an oddity, out of the question for all but the ultra-rich, and out of the minds of the general public.
Notoriously, diamonds and love both last “forever”. Because of this, NW Ayer aimed to link the idea of diamonds and love, in a way that now seems inseparable. Diamond engagement rings have become part of courtship culture across the world, with the size of the rock supposedly representing the depth of emotions. Diamond demand boomed and has remained reliable ever since.When Pandora’s CEO said diamonds are for everyone, he touched on the mass-market idea that NW Ayer started. On the other hand, diamond mining is only for a select few. Now, diamond miners have quietly started their next great marketing campaign, aiming to create two products from one.

Democratising the stone, and the rise of synthetic diamonds
In 2020, the Diamond Producers Association became the Natural Diamond Council. The group of seven diamond-producing companies retained its aim of enabling “safe, high-quality jobs”, local sourcing of goods, and helping achieve best practice.Alongside this, the group now also promotes using geological diamonds over synthetic stones. Why? The group’s website offers an answer by linking to a fact-file about diamonds. This proudly tells consumers that “diamonds come from the Earth”, “diamonds are the oldest thing you’ll ever touch”, and that “diamonds are rare”. Coincidentally, synthetic diamonds challenge all three of these old truths.

Mine owners have designed this test to contrast between organic and lab-made diamonds, and give their product greater value.
It aims to promote the “values and heritage of natural diamonds” under the consumer-facing brand of “Only Natural Diamonds”. The group aims to introduce its own ”Fifth C”: Certification. This allows jewellers to “verify that you are buying a natural diamond with authentic intrinsic value”.
Identical in every way, synthetic gems cannot pass this barrier. While most diamond creation technologies are accessible to anyone, mine owners have designed this test to contrast between organic and lab-made diamonds, and give their product greater value. Synthetic diamonds continue to grow, but this only makes the mined product rarer, and rarity sells.So, the synthesisers struck back. In June 2021, US company Latitude introduced its own certification process focussing on a new “Fifth C”: Climate neutrality. Latitude aims to market itself as a sustainable seller, much like Pandora, with strict environmental oversight.

Changing diamond prices
Wholesale and retail diamond prices have declined significantly in recent years. In the next four years, Element Six will invest $94m in a new synthetic diamond manufacturing line in Oregon, US. A spokesperson says that the company believes prices will continue to decline, and that “lab-grown diamond prices will increasingly reflect their cost of production”. De Beers remains confident in the natural diamond market.De Beers does not believe that the rise of synthetic diamonds and the decentralisation of diamond power will hurt its profits. A company spokesperson told us: “The primary consumer interest in lab-grown diamonds is as lower-priced fashion jewellery, so it’s unsurprising to see an increasing number of retailers selling lab-grown diamonds in line with this proposition.”

As inherently precious, finite, and unique miracles of nature, natural diamonds occupy a different place in the consumer market.
“Lab-grown diamonds and natural diamonds are different products, which have different attributes, different value propositions, and appeal to consumers for different reasons. As inherently precious, finite, and unique miracles of nature, natural diamonds occupy a different place in the consumer market.
“Lab-grown diamonds provide a different offering in the jewellery sector as fun, fashion jewellery that doesn’t cost that much, which is what research consistently demonstrates consumers are looking for when it comes to lab-grown diamonds.” mine.nridigital.com
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