Are lab-grown diamonds forever?

Diamond is the hardest naturally occurring material on Earth and, matched with its extreme hardness, unmatched brilliance and sentimental value, it is the most popular gemstone used in jewellery.  As investors in the luxury market seek out emerging trends and innovation, interest in lab-grown diamonds is growing. We spoke to Nicole Mihelson, Co-founder of Or & Elle, to hear why the man-made gems are being given their moment to shine.  

Nicole Mihelson, Co-founder, CEO of OR & ELLE.

What are lab-grown diamonds?      

"Lab-grown diamonds are diamonds. They come to life by reproducing the incredible heat and pressure that form diamonds underground. A carbon seed (i.e. a mined or lab-grown diamond) is placed inside a deeply heated and pressurised chamber and carbon is inserted into the chamber. The source of carbon can either be pure gas, which forms Chemical Vapour Deposition (CVD) diamonds, or solid, which forms High Pressure High Temperature (HPHT) diamonds. The inputted source of carbon covalently bonds with available carbon atoms in the diamond seed. The diamond is now larger by one layer of carbon atoms, and this process iterates endlessly until the diamond is formed.

Just like with mined diamonds, the result of this process is a rough stone and it must be subject to highly skilled labour and imaging to optimise how to cut the rough diamond into a variety of shapes (i.e., round, cushion, emerald, oval, pear, etc.) with varying qualities depending on the inclusions present in the rough stone. In the end, the quality and brilliance of a diamond will be most impacted by the quality of labour and cutting, not only by the colour and clarity as is commonly thought. 

The first lab-grown diamond was grown in 1954, but it was far too small to be gem-grade. The first gem-grade diamond was created in 1971. However, lab-grown diamonds materially entered the jewellery space in 2018 when the US Federal Trade Commission removed the word "natural" from its definition of a diamond, as lab-grown and mined diamonds are completely indistinguishable. They are chemically, physically and optically identical, and thus the US Government set the standard and precedent for the rest of the world to follow.

Just as mined diamonds exist on a vast spectrum of quality, so do lab-grown diamonds. Lab-grown diamonds are graded by the same third-party rating agencies (e.g., GIA, IGI, HRD). Each lab-grown diamond has its own unique fingerprint, and very few are gem-grade (just like mined). Fewer still are those that are near colourless and without macroscopic inclusions."

How have lab-grown diamonds shaped the jewellery industry? 

"Lab-grown diamonds have definitely changed the jewellery industry for the better, as they’ve catalysed a reckoning with the provenance of mined diamonds – which, despite any claims otherwise, are fundamentally non-traceable and frequently a currency of choice among those seeking to avoid global financial systems i.e. insurgents, terrorist groups, smugglers, etc.

They’ve provided an important outlet for diamond purchasers and investors to self-adorn and enjoy the luxury of diamonds in a way that is sustainable — both from the human and environmental perspective."

How can lab-grown diamonds be more sustainable than mined diamonds?

"As they require no mining, lab-grown diamonds are inherently more sustainable. Mining is unbelievably destructive to the Earth as quantified by ecosystems destroyed, carbon emissions, water required, and - perhaps most importantly - the unaccounted for and profoundly hazardous conditions for the miners. 

Beyond mining, lab-grown diamonds can be completely sustainable depending on the lab, its source of energy, and the labour used in all downstream processing. For example, Or & Elle’s lab-grown diamonds are sourced from premier laboratory partners who are third-party accredited by SCS Global Services, under the SCS-007 Sustainability Diamond Standard. They are fully traceable and 100% Climate Neutral. Our diamonds are uniquely created via Chemical Vapour Deposition (CVD) given the superlative brilliance that results from this technology. Further, Or & Elle diamonds are sourced locally in Antwerp, Belgium — the diamond capital of the world — so that the atelier can maintain full visibility over their quality and provenance. 

Perhaps the most important element of sustainability is human sustainability. By remaining uncompromising about working locally in Antwerp and never outsourcing labour, we have deep and personal relationships with every artisan involved in our craft. Or & Elle’s Atelier is all family-run and operated. As fourth-generation diamantaires ourselves, we have been partnering with our craftspeople for decades.

By sourcing locally and working locally, we maintain full visibility over the entire supply chain from ideation to creation, ensuring top tier labour practices and wages for our entire team."

Are there any misconceptions about lab-grown diamonds?

"The first misconception is that one can simply choose the specs of a lab-grown diamond (i.e., three carat, pear, D colour, IF). The process is completely variable and, as with mining, the rough diamond can exist anywhere on a vast spectrum of quality. It is up to the cutter and atelier to bring to bear a legacy of unparalleled craftsmanship and savoir-faire in order to turn the rough stone into a polished final diamond worth its weight. Each lab-grown diamond has its own unique fingerprint; no two can be the same. 

The second misconception is that lab-grown diamonds don’t retain their value. First, it is a greatly eroded myth that mined diamonds do retain their value. For example, a one carat, D, flawless mined diamond has depreciated over the last few decades from over US$60,000 to today’s wholesale price of US$17,000. With the decreased demand for mined diamonds accelerating in recent years, their value has only been subject to additional deflationary pressures. However, the increased demand for lab-grown diamonds (and incredible rarity of the superlative ones comprising 0.01% of labgrown diamonds worldwide) has led to their inflation. Ultimately, both lab-grown and mined diamonds are commodities subject to market movements as any other, and both are benchmarked to the Rapaport List which is the basis for the wholesale price per carat updated weekly."

Next-generation luxury

Lab-grown diamonds have since been given the official stamp of approval in the luxury goods industry with the likes of LVMH investing $90 million into the world’s first 100% solar-powered lab-grown diamond producer, Lusix. Having introduced the first watch to feature lab-grown diamonds earlier this year, Frédéric Arnault, CEO of TAG Heuer, understands that the next-generation luxury consumer wants choice and quality. Lab-grown diamonds can offer exactly that, through bigger and often higher quality stones at a lower price - without the high environmental cost.

The market value of lab-grown diamonds is estimated to total just under US$6 billion with a forecast to be US$29 billion by 2025 and represent 10% of the global diamond market by 2030. With this in mind, it may be an area of the luxury goods industry to watch. 

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