Synthetic Gem Quality Diamonds and their Potential Impact on the Botswana Economy

A reflection paper

Lab-grown diamonds are becoming increasingly popular in the diamond business. According to a survey by the Antwerp World Diamond Centre (AWDC), young diamond purchasers are lured to these diamonds on account of their pricing, transparency, and environmental concerns, resulting in this part of the market growing by 15% to 20% yearly. As more jewelers begin to offer lab diamonds and new laboratories open, the boom is projected to continue.

In recent years, the technology behind lab diamonds has advanced significantly, allowing firms to produce higher-quality diamonds more quickly and at a lower cost, thereby instigating increased rivalry between lab and mined diamond firms. According to a survey commissioned by the AWDC, a CVD lab-grown diamond now costs $300 to $500 per carat, compared to $4,000 per carat in 2008.

Lab-made diamonds have become so important in industrial applications over the last 30 years that mined diamonds now account for a little over 1.5 percent of the world’s supply of industrial diamonds. Experts are inquiring whether the recent technological advances in synthetic diamond production and enhancement of mined diamonds, as well as their growing high-tech applications that demand color, clarity, and carat size similar to gem-quality diamonds, will cause the displacement of mined gem-quality diamonds in the coming decade.

The answer to the question is based on several currently unknown criteria. The first question is whether lad diamonds will affect the market like cultured pearls affected the pearl market, where they almost completely replaced natural pearls. Besides, it is also pertinent to inquire whether lab diamonds will replicate the market experience of synthetic rubies and emeralds, where the mined and synthetic markets are separable, and natural stone prices have had no effect. According to the limited information available, synthetics account for a relatively tiny percentage of total gem production. If the said two markets cannot be adequately separated, gem-quality synthetic diamonds will follow the life cycle of industrial diamonds. A mapping effort of synthetic industrial diamonds has already been completed, with the market for these diamonds thought to be in decline or on the verge of rejuvenation.

Another question that is frequently asked pertains to the potential threat that the rise of lab diamonds poses to the mined gem-quality diamond industry. According to a research study titled “Synthetic Gem Quality Diamonds and their Potential Impact on the Botswana Economy,” the rapid growth of Chemical Vapor Deposition (CVD) over the past 20 years may be remarkable, but it constitutes no threat to the natural diamond industry. In other words, it could be believed that the current trends in the diamond market at large cannot harm the existing trends.

Be that as it may, lab diamonds are not without flaws. Although exact statistics to compare the carbon footprints of mined and lab diamonds are difficult to come by because of a lack of transparency, the energy required to generate a lab diamond is substantial. According to a survey commissioned by the Diamond Producers Association, greenhouse gas emissions produced by mining natural diamonds are three times lower than those produced by lab-grown diamonds.

It is also argued that with the advent of lab-made diamonds has come a drastic decline in how wholeheartedly customers set foot in the diamond market. The diamond and jewelry industries may have responded to the issues posed by lab-made diamonds, but no attempt has been made to address the most significant concern, which is the likelihood of customers losing faith in the long-term market worth of diamonds.