When DeBeers coined the slogan “A diamond is forever,” back in the late 40s, they had no inclination that within half a century, lab technicians were going to be able to create gemstones inside laboratories within 6 TO 10 WEEKS as opposed to the billions of years that it takes to form naturally.
The difference between natural and lab grown diamonds is very little so much so only a real expert armed with a powerful magnifier will be able to tell the difference based on the pockets of impurity found in natural diamonds which are usually not found in lab grown diamonds which mean that lab grown gemstones are actually as good as natural diamonds and often deemed as better.
It is in essence due to this that there has been a rise in demand for lab grown diamonds which leaves the sphere of natural diamonds within the diamond industry unsettled.
The CEO of Anglo American, Duncan Wanblad indicated to the Financial Times that De Beers has become less appealing for selling and will be “the hardest part” in his words of Anglo’s restructuring. Paul Zimnisky an industry analyst on the other hand stated that diamonds do not really fit into their business structure as well as it used to despite DeBeers strong legacy.
According to him Anglo will eventually fold to the whims of the company’s shareholders who would naturally want to place focus and importance on long term strategies that are associated with commodities that are in line with the green infrastructure build-out such as copper.
Based on statistics, the demand for diamonds has dwindled mainly due to the lower demand from China a key consumer market. Apart from that, the lower marriage rates in this era and the growing popularity of gold and lab grown gem stones for engagement rings and jewellery have all contributed to the fading demand for natural diamonds as reported by Daxue Consulting a prominent market research firm.
This supports the lower prices that natural diamonds are being sold for and according to the Zimnisky’s rough diamond index prices of natural stones have declined by nearly 6% over the year which means prices have fallen by approximately 30% since the all-time high in 2022.
The monopoly that was once upon a time commanded by DeBeers is open to new market entrants which include players that are specific to lab grown diamonds that cost much less which was the reason behind DeBeers’s decision to cut prices by a whopping 10% at the beginning of the year as reported by Bloomberg.
The founder of fine jewellery e-commerce company Angara, Ankur Daga told CNBC that “The diamond industry is in trouble,” and that the prices of natural diamond prices will fall by another 15% within another 12 months or so.
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However, Anish Aggarwal, of diamond advisory firm Gemdax is a bit more positive on the matter and hopeful when he indicated the challenges currently faced by the diamond industry is not beyond hope and that the challenges can be addressed by “creating the want” among consumers.