The Inflection Point
Why lab-grown diamonds are permanently changing the face of the diamond industry.
The diamond industry is facing a seismic shift, but not for the reasons you might think. While the rise of lab-grown diamonds is certainly a disruptive force, a convergence of slowing demand, sanctions and an increasingly ethically-aware consumer class are reshaping the face of what has historically been one of the world’s most sought-after commodities.
The global diamond market, valued at roughly USD 80 billion, is experiencing a period of significant flux. As Tim Treadgold notes in Forbes, "Diamond mining is losing its sparkle as lab-grown market share rises." This shift is driven by several factors, including growing consumer awareness of ethical concerns surrounding mined diamonds, the increasing affordability and availability of lab-grown alternatives, and a general decline in demand, particularly from China. De Beers, the industry giant, has acknowledged this pressure by recently slashing rough diamond prices by 10-15 per cent, while shifting demand from the U.S. and China saw prices reach a 14-year low.
Lab-grown diamonds are competitive for a number of reasons. Firstly, they are significantly cheaper than their mined counterparts. Martin Rapaport, a leading voice in the industry, highlights this starkly, stating that "synthetic diamonds carry a 1,422% markup compared to natural diamonds at 6-9%." This price disparity, coupled with the fact that lab-grown diamonds are almost impossible to differentiate from natural ones, makes them an increasingly attractive option for consumers. As stated by Susan Jacques, GIA President and CEO, “We are 100 percent able to differentiate between the laboratory-grown and the natural stone, and we have a lot of instruments we develop solely for use within our internal grading capacity. It is almost impossible for most people to look at a lab-grown and a natural stone, side-by-side, and make a determination. It’s even difficult for gemologists. It requires the skill sets of the laboratories.”
Secondly, diamond mining is not only a costly activity in every aspect of the word, but furthermore unpredictable. Where speculation and output are somewhat of a gamble, lab-grown diamonds represent a highly predictable, easy-to-catalogue product without any of the ESG baggage inherent with naturals. However, the impact of lab-grown diamonds extends beyond mere competition with mined stones. Their unique properties open up new avenues for innovation and application. The future of lab-grown diamonds is inextricably linked with the tech industry, where their exceptional hardness, thermal conductivity, and optical properties make them ideal for use in semiconductors, lasers, and other high-tech applications. This burgeoning demand ensures that lab-grown diamonds are not a passing fad, but rather a permanent fixture in the global economy. Commenting on his company’s development, Diamond Foundry CEO, Martin Roscheisen said, “Our master plan has always been to first introduce sustainable diamonds wherever mined diamonds have been able to go. Step two was to introduce single crystal diamond wafers to enable the most advanced technology.” At just 100mm in diameter, with a weight of 110 carats, Diamond Foundry’s breakthrough can be bonded on top of a regular silicon microchip, enabling the heat produced to dissipate. The outcome: a silicon diamond-paired chip that can run faster and longer, with reduced hot spots and up to three times their usual speed.
At a time when natural diamonds are already in a state of steady decline, the EU’s politicization, combined with ethical and environmental concerns has only further moved the needle in favour of the far easier, cheaper and in-demand lab-grown industry. As outlined by Martin Rapaport in a statement published in November, “The EU is trying to use the KP and Group of Seven (G7) sanctions to illegitimately control the international trade of diamonds through its Belgium trading center by using ineffective exclusionary sanctions processes. This is an attempt to grab power in support of Belgium’s national interests at the expense of diamond producers, manufacturers and consumers.”
From this perspective, the evolving landscape presents a unique opportunity not just for the tech-leading hubs of the world, but also for African diamond-producing nations. Rather than viewing lab-grown diamonds as a threat, the option to embrace them as a catalyst for economic growth and diversification has become all the more appealing. Establishing lab-grown diamond facilities in Africa would create new jobs, foster technological advancement, and provide opportunities for skilled diamond cutters to hone their craft with less risk associated with handling expensive rough stones. Consequently, African nations are now in a stronger position to participate in both the natural and lab-grown diamond markets, ensuring their continued relevance and legacy in the global industry. Certainly, the success of lab-grown diamond companies in other rapidly emerging markets should be heralded as an indicator of things to come, with last month’s IPO of India’s International Gemmological Institute (IGI) at a 22 per cent premium being a great example.
So, where does this leave natural diamonds? The key lies in embracing their inherent strengths. Natural diamonds, formed under immense pressure, possess a unique history and rarity that lab-grown diamonds cannot replicate. This inherent scarcity, combined with the emotional and symbolic value associated with mined diamonds, will continue to resonate with a segment of the market. As Rodion Ksonzenko, founder and CEO of Magnat Fine Jewelry observes, "The future of natural diamonds is focusing on that they can’t be made in laboratories, particularly fancy coloured and big carat diamonds. Such unique stones can not only be used as beautiful jewellery pieces but can also concentrate huge amounts of value into something very small. As such, natural diamonds should be focused on rare and unique pieces - not on mass market and industrial stones which are easily created in laboratories.”
While these critical crossroads will certainly have influence over the industry’s future, maintaining a united and persistent focus on the ethical sourcing and transparency of diamonds will remain essential. As recently shared over social with fellow industry stakeholders’ Brad Brooks-Rubin and Rob Bates, their criticism of the Kimberley Process seems to overlook that before the KP, conflict diamonds were estimated to account for up to 15 per cent of the global market. Today, that number is less than one. In its 'Year of Delivery', the KP has succeeded in inaugurating the KP Secretariat in Gaborone, continued its work on the Ad Hoc Committee on Review and Reform, and integrated Uzbekistan as its 60th member. In terms of transparency, again, the KP is the only organisation to collaborate on providing a digitised solution for tracing a rough diamond's origin. Certainly, to unite a broad range of countries, and integrate a proof of concept on the issuance of secured digital certificates is no easy feat. As the KP look towards its 'Year of Best Practice', it will continue to work with all industry stakeholders who seek to continue its significant progress and legacy.
Ultimately, there is room for both lab-grown and natural diamonds to live in a coopetition, each catering to different needs and preferences. Similarly to the evolution of the pearling industry, once dominated by natural pearls, the cultured market has slowly evolved and is on track to become a USD 15 billion industry by 2032, leaving natural pearls as rare, sought-after pieces for collectors. The same can be said for synthetic emeralds, which have grown to become a USD 2.64bn market in 2024, with a compound annual growth rate of 6.6 per cent. In practical terms, the real competition for market share in the luxury consumer market isn’t between lab-grown and natural, but diamonds as a united industry against high-end fashion accessories and watches.
Following the inaugural Lab-Grown Diamond Symposium in 2023, the consensus was clear. That the global markets will continue, like diamonds, to follow the path of least resistance. As a result, centres with barriers, whether through sanctions or companies attempting to control the market have suffered. With the Antwerp World Diamond Centre (AWDC) reporting a fall in rough diamonds by 38 per cent in the first nine months of 2024, its overall rough diamond contraction is 70 per cent over the past decade, with polished declining by 40. Faced with a trifecta of Russian sanctions, lab-grown diamonds and declining demand, there has never been a crucial time for the natural diamond industry to adapt to demand, rather than trying to directly compete. With the second Lab-Grown Diamond Symposium scheduled to take place at the Almas Tower Conference Centre on 30th September 2025, I look forward to once again uniting the diamond industry and discussing the key issues surrounding the sector, while calling for greater transparency and cooperation as a mechanism to regain the market’s confidence and trust.