As Lab-grown diamonds present a more attractive value proposition for not just consumers but even traders and merchants in the diamond industry alike, it is inevitable that stakeholders across the diamond pipeline will venture into Lab Created diamonds, especially considering the growing acceptance of LGD and the current gloom in the mined diamond sector.
According to a Rapaport article, around 80 De Beers’ Sightholders are already trading or considering doing so in Lab-grown Diamonds. To ensure that there is no possible conflict, these Sightholders are using separate ventures to deal in Lab-created diamonds, for clear segregation from their mined diamond business.
In the current market situation mined diamonds is not earning any money for most of players in the diamond value chain, on the contrary almost all are losing money. In contrast to this, Lab-grown diamonds offer much better margins.
In India, the global diamond processing (cutting and polishing) hub, exports of polished LGD have more than doubled (111%) to INR 1,400 crores ($200.3 million) in the 6 months period of April-September 2019 compared to $97 million in the same period last year, according to India’s GJEPC (Gem & Jewellery Export Promotion Council). Surat is becoming India’s Lab-grown hub with more than 150 units located in Varachha, Katargam and Mahidhapura areas producing Lab-grown diamonds.
Instead of its earlier tactics of banning/ blacklisting, De Beers is not actively stopping its Sightholders to venture in Lab Grown Diamond arena (After launch of Lightbox, it would be a farce if they even think of doing so) but is instead forming guidelines and updating its BPP (Best Practice Principles) with new rules that tells Sightholders and accredited buyers not to use misleading statements or false claims of environment friendliness of LGD or negative societal impact of mined diamonds etc. (Sic)
One of a prominent Sightholders – Dilip Mehta – Chairman Emeritus, Rosy Blue Alliance (a $1.5 Billion India-Belgium company) is venturing into Lab-grown Diamonds with his sons, in an independent business based out of Surat. Mehta’s new Lab-grown diamond venture plans to manufacture 25,000 carats of LGD and import LGD roughs manufactured in China, targeting Indian, US and Dubai markets. The company plans to expand its manufacturing capacity gradually over time.
Dilip Mehta said “Many diamond companies are already into lab-grown business, but they have not come out officially. In the next couple of years, you will see lot many companies in this lucrative field.”
By making an early move, Rosy Blue’s Dilip Mehta has set a path for other De Beers Sightholders to tread.