De Beers, world’s largest diamond miner will start selling Lab-grown diamond jewelry from September through their brand Lightbox. The miner who said it would ‘never sell anything that cannibalizes the industry’ has made a U-turn and shocked many in the global diamond industry. However, there is something that stands out with the whole promotion of Lightbox is the fact that De Beers will not provide any certifications for these stones.
Lab-grown diamonds are real
Industry experts have over time vouched that Lab-grown diamonds are as real as mined diamonds.
Stephen Morisseau – Gemological Institute of America (GIA) says, “From our perspective, synthetic diamonds are diamonds. They’re not fakes. They’re not cubic zirconia. They have all the same physical and chemical properties of a mined diamond.”
Swarovski also states the same “created diamonds are identical to mined diamonds. They are 100% carbon and have the same hardness, brilliance and fire as natural mined diamonds. Only the origin is a laboratory, not the earth.”
Besides, with exactly the same physical, chemical, optical & other properties, calling Lab-grown diamonds ‘synthetic’, ‘artificial’, ‘fake’ etc. is grossly incorrect.
In fact in its recent guidelines, US FTC (Federal Trade Commission) declared that Lab Grown Diamonds are Diamonds, by removing the term ‘Natural’ from the definition of Diamond and also the term ‘Synthetic’ to describe Lab-grown diamonds
Diamonds are not fungible like gold, and its pricing is complex
Unlike gold, diamonds are not malleable and cannot be melted and sold. While you can melt two pieces of gold and make a bigger one, the same is not true for diamonds.
Prices of gold change proportionately according to its weight. Only purity grade and benchmark prices for that purity grade are required to determine prices of gold. However, in case of diamonds, only the weight (1 carat = 200 milligrams) is not a standard factor to determine diamond prices. Price of a 2-carat diamond will not be double the price of a 1-carat diamond. Diamond prices are determined primarily on 4Cs – Cut, Color, Clarity and Carat and change disproportionately by weight, unlike gold.
These 4Cs and other characteristics of a diamond generate over 16,000 permutations and combinations, making price evaluation of diamonds complex. Besides, a 2012 Bain and AWDC report mentioned “Indeed, two appraisers can differ in their valuation of the diamond by as much as 30%”.
Thus, diamonds are not fungible like gold, and lack uniformity in grading, benchmark prices etc.
Whereas, Lightbox has fixed price for a carat of a diamond at USD 800, which changes proportionately to its weight. Even if all the 4Cs remain constant, price of one carat diamond is not a standard factor that can be considered to evaluate the price of other sizes. Rationale behind Lightbox’s pricing is though absurd but a different topic.
Hence, certification helps
Considering diamonds are not fungible, to determine its prices it is pertinent to know all the 4Cs and other aspects of a diamond. Certification from a reputed grading lab helps in such a scenario.
While the 4Cs of a diamond define it, a certificate – the 5th C gives credibility to the 4Cs. Certification is critical to gain information one needs to assess the diamond’s fair market value.
Certification is required for Lab-grown diamonds too
Since Lab-grown diamonds are real and its prices also depend on the same 4Cs, certification is imperative for them too. Currently, all the leading gemological labs do provide certification for Lab-grown diamonds where they clearly mark them as “Lab-grown”. This is necessary to distinguish Lab-grown diamonds from Mined diamonds.
Besides, without a certificate how can a customer be certain that what they are buying is a Lab-grown diamond and not a simulant like CZ (Cubic Zirconia) or Moissanite.
However, Lightbox is not going to provide Certifications
In all its wisdom, Lightbox has decided not to grade and provide certification to their Lab-grown diamonds. With this decision, they will be facing an uphill task of gaining consumer confidence.
Moreover, knowing what they are actually buying is customer’s right and without certification Lightbox is depriving customers of this right. Who is going to take responsibility if a customer finds out later that her purchase was actually a Zircon!!