Should you buy lab-grown diamonds?
The super short answer is NO. But why not?
Because lab-grown diamonds are worthless. And because they are sold way too expensive compared to what they actually cost and what we in the diamond industry can buy them for.
I did a little experiment that no one believed. Could I buy a laboratory-produced diamond of 2 carat drop shape in Color G, and clarity VS1 with a good ratio for under 1000 USD, i.e. under 7000 DKK, and have it sent to Denmark?
Yes, I can. And I’m sitting with it here.
Now I could sell it on for 7.000 Euro or maybe even 8.000 Euro and make a lot of money from it, but I don’t do that, even though that’s what happens everywhere. Because I didn’t think it is worth the money to buy lab-made diamonds. They fall in price all the time, and in a very short time they will be worth absolutely nothing, and will perhaps be sold for 15 euro pr carat. The same as a swarovski crystal. So to me, a lab made diamond is the same as buying a swarowski crystal. At least there you know what it’s worth and don’t pay too much because it’s being launched as a “diamond”.
What is a laboratory made diamond ?
It’s a diamond, it’s just made in a lab. It takes about 2 weeks to grow a diamond of 1 carat, and you can get it in all colors and sizes. You can order lab-made diamonds that must have a certain pink color to set in e.g. A tennis bracelet.
How are they made?
In the laboratory world, there are two primary technologies used to produce them: HPHT (high pressure and high temperature) and CVD.
HRTP was the first diamond growth technology introduced in 1954, but is more expensive and more energy intensive than the recently developed CVD method.
Instead of using intense pressure and heat to replicate how natural diamonds form, the CVD process mimics the way diamonds form in interstellar gas clouds, similar to how snowflakes form. It uses less extreme temperatures and pressures than HRTP and requires more compact and less expensive equipment.
Are there benefits to lab-created diamonds?
Lab-made diamonds do not disturb any ground surfaces. Additionally, lab-grown diamonds do not produce any mineral waste.
Ethically sourced – Lab created diamonds are conflict free. Diamond miners are never harmed or exploited during the production of lab-grown diamonds. Thus, there are never any problems with you buying a “blood diamond”. On the other hand, you can say that there are millions of people who make a living working in the diamond industry in a completely ethically defensible way, and if you only start buying lab-made diamonds, they will loose their jobs.
Competitive Prices – Lab-grown diamonds typically cost 80% less than mined diamonds due to a shorter supply chain.
Disadvantages of lab-created diamonds
While lab-made diamonds are technically diamonds, they have disadvantages compared to natural diamonds.
Rarity – Because lab-created diamonds are manufactured, they can be mass-produced. Thus, your diamond will not be a “one-of-a-kind”, as is the case with the diamonds mined from the earth.
Value – Man-made diamonds are relatively new to the jewelry industry. But since every diamond producer in India with a reasonably large company, has a production of laboratory made diamonds, and they produce more and more, the value will drop dramatically.
While naturally mined diamonds typically increase in value over time, the lab-created diamond you buy today may be worthless in a few years.
The uncertainty of the value of lab-grown diamonds makes their resale value highly questionable. There is actually no resale. So your lab made diamond is worth nothing. Whereas the value of naturally mined diamonds remains fairly consistent or increases and is therefore a more stable investment.
What do consumers think about lab-grown diamonds?
In a report compiled by Baine illustrating the responses of about 1,500 consumers to the question “What do you think of when you think of lab-grown diamonds?” most answered “artificial” and “fake”.
But the report also says that “the lab-grown segment is developing rapidly due to technological advances and increasing acceptance across the value chain.” The value chain Bain refers to is largely in the fashion jewelry segment, where lab-grown is more “accessible to a wider range of price-sensitive consumers.”
The whole point is that natural diamonds are unique and rare. Diamonds are becoming rarer every day because no new significant deposits have been discovered for about 30 years, where lab-grown diamonds can be produced in potentially unlimited quantities equivalent to any manufactured product, so they are not unique and cannot be considered rare.
“Natural diamonds derive their value from their scarcity as a natural, billion-year-old gemstone and have been shown over the decades to increase in value as they become rarer.”
As De Beers says: “Lab grown diamonds are for the “masses”, where natural diamonds are for the “classes”