Pandora unleashed a plague likely to destroy the diamond industry with its lab-grown diamonds
The search for sustainable ways to protect our planet for the future generation by reducing our carbon footprint has led to some remarkable technologically feat. Most times, a paradigm shift in technology often has a cause-and-effect.
In some cases, the effect of a major change in a process could far outweigh the previously accepted ways, while in other situations, the opposite is the result.
Pandora has decided to open its box of mystery and its competitors aren’t excited about this news because they regard it as a bad omen for the diamond industry. This curse is so scary, and like a dragon, its raging fire is likely to result in the demise of some companies in the diamond industry.
A few days ago — May 4 — Pandora announced the launch of Pandora Brilliance which is the company’s first laboratory-grown diamond collection (aka laboratory-created/synthetic diamond). The collection is launching first in the UK before its expansion to other global markets in 2022. This is a major concern for other companies in the diamond industry that are already used to mining. Below is the statement on Pandora’s Press Release on its website which is credited to the company’s CEO.
Alexander Lacik, Pandora CEO, says: “Pandora continues its quest to make incredible jewellery available for more people and today I’m proud to announce the introduction of Pandora Brilliance. It’s a new collection of beautifully designed jewellery featuring lab-created diamonds. They are as much a symbol of innovation and progress as they are of enduring beauty and stand as a testament to our ongoing and ambitious sustainability agenda. Diamonds are not only forever, but for everyone.”
Pandora wouldn’t be the first to attempt disrupting an industry from the laboratory, at least, we have heard of lab-grown meat and plant-based meat being promoted by companies such as; Memphis Meats, Mosa Meats, Beyond Meat, Impossible Food, and No Evil Foods. Although I haven’t tried it, it is said to appear and taste like regular meat from animals. Apart from the other reasons why this innovation seems to be the future of the meat industry, the one that resonates considerably well with this article is the positive impact on climate change. The meat industry isn’t immune from the activists that view the meat supply chain as activities that endanger the environment and rubbishes human/animal rights, this isn’t entirely different from the backlash that the diamond industry receives regularly.
The advancement in technology has enabled scientist to successfully mask the true identity of some things without suspecting except if you’re told or your curiosity had the best of you and you decide to play the role of Sherlock Holmes. According to Pandora, the laboratory-grown diamonds are quite identical to the mined diamonds in terms of physical, optical, thermal and chemical characteristics. This is reasonable since they are made from the same material as pure diamond and Pandora’s perspective isn’t different from that of Stephen Morisseau (Spokesman for Gemological Institute of America) as seen in The Washington Post.
Pandora’s lab-grown diamonds are graded by the same 4Cs standard — cut, colour, clarity and carat. Also, the company is committed to using renewable energy sources for the production of its lab-grown diamonds. The most popular gem labs that specialize in grading diamonds include; Gemological Science International (GSI), American Gem Society (AGS), International Gemological Institute (IGI), Gemological Institute of America (GIS), and Antwerp World Diamond Center (AWDC).
The Pandora Brilliance is now available to purchase in the UK and some piece can be bought for £250 and above, each stone ranges from 0.15 to one carat.
Have you ever bought a piece of diamond-encrusted jewellery for an occasion? Did you ask the Jeweler for its origin? I guess most likely not. Diamonds are an expensive investment that is beautifully crafted to look stunning on you and they are rare gems. The business of diamond production is capital intensive and rewarding to some, players in the industry wouldn’t mind exploring different financing options. As a result, this market isn’t exempted from shady activities which sometimes could be life-threatening just to enrich the pockets of a few.
The working conditions of so many mines aren’t the best — risk of the mine collapsing and either trapping or killing miners, but as if this isn’t enough to worry about, we also have the issue of child labour, rape in rebel-dominated mining locations, bribes, tax evasion and money laundering, illegal mining — mostly without a license, funding the illegal purchase of arms and ammunition. All these have led to increasing poverty and instability in some countries (e.g. DR Congo) where diamonds and other natural/mineral resources — tin, tungsten, coltan, gold, etc. — are mined.
If you’re unsure why other mineral resources other than diamond are useful, then we’re officially letting you know today that the electronic gadget (mobile phones, personal computers, etc.) that you’re using to read this article might contain tantalum which is one of the products of coltan (aka columbite–tantalites and known industrially as tantalite). Despite the Kimberly Process — a commitment to remove conflict diamonds from the global supply chain — established in 2003 and the 99.8% estimated reduction of conflict diamonds, I still think the illegal trade is still thriving and the perpetrators of this crime are now probably wiser.
In a world where verbal assurance has been a gold standard for a diamond’s origin, it's quite impressive that major diamond companies are now taken sourcing seriously. With the numerous hurdles that companies have to face to get rough diamonds, it shouldn’t be surprising that the price of a lab-grown diamond is cheaper compared to a diamond extracted from the earth. Also, lab-grown diamonds may likely give most people a sound sleep with the satisfaction that they aren’t unknowingly fuelling unrest in other parts of the globe since the diamonds can be traced to a particular source — 100% transparency.
The Covid-19 pandemic shut down the brick-and-mortar experience associated with luxury items such as diamonds. Travel restriction and staycation became our new reality in 2020, however, there has been a positive global outlook in the travel and tourism industry in 2021 with the advent of the Covid-19 vaccines and government support. All these resulted in new marketing strategies for some major luxury brands as they had to embrace eCommerce & virtual experience. Surely, I believe diamonds have definitely been on the shopping list of some people who would ordinarily have spent up to $6,000 on vacation or luxury fashion apparel.
But I still expect a decline in the expected revenue of diamond retailers in 2021 when compared to the 2019 figures. Diamonds and weddings are inseparable, the year 2022 or 2023 might provide much-needed relief for the industry. As countries bounce back to the pre-Covid19 era, demand for diamonds will most likely be triggered by rising GDP, an increase in employment rate, and the increase of disposable income for the wealthy.
The people of China and Hong Kong are known to be amongst the biggest spenders on luxury items, but a repeat of the trade war as seen between the US. and China during President Donald Trump’s (45th President of the US.) regime, or political unrest in key trading locations in Hong Kong could wipe off expected revenue from the income statement of diamond companies in subsequent financial years (2022, 2023, 2024, etc.).
According to Bain & Company, prices for higher-quality polished diamonds have outperformed lower-quality diamonds over the past two years. This is quite disturbing when you consider lab-grown diamonds. If a lower-quality diamond can be treated with disdain or not-so-valuable, then I don’t expect much praises for the lab-grown diamond despite being of similar characteristics as the mined diamond. Some people still categorize the lab-grown diamond as a replica, fake, not real, imitation, counterfeit, pseudo, etc. In other words, they aren’t interested in owning them.
We’ve written about the luxury consignment industry and owning pre-owned designer items, this resale market thrives on authentication, and if it’s difficult to understand what you’re selling — lab-grown diamonds — then getting top dollars for your item might be nearly impossible.
The steps involved in making a lab-grown diamond aren’t exactly different from the mined diamonds, the difference is in how some of the processes are achieved. Geologists believe that diamonds are formed within the earth and it takes a long time — 1billion years or more — for this change to occur. Carbon dioxide beneath the earth surface, specific high temperature and high pressure are some of the components or conditions that are required before you can start daydreaming of being a diamond merchant that owns a large expanse of land with trapped diamonds.
To make a lab-grown diamond also requires HPHT (high pressure, high temperature) and the process begins with a small diamond seed which is placed into carbon. The carbon melts as a result of being subjected to HPHT and starts to form crystals around the small diamond seed. I guess the small starting diamond is called a seed because the process is similar to seed germination in plants where a seed results in more fruits packed with plenty of seeds.
Also, you can check out some of the other ways — e.g. Chemical Vapor Deposition (CVD), Ultrasound Cavitation, etc. — in which a lab-grown diamond can be created. With all these, it wouldn’t be long before old and new players raise funds from Venture Capitals (VCs) to move into this industry, and we might just be a few years closer to having a few young scientists as gemstone millionaires or billionaires.
As for me, the lab-grown diamond market is a grey area but would definitely encourage other companies to venture into it instead of remaining rigid. We all know what happened to Nokia and Blackberry. The automobile industry must have learned a lot from the downfall of Nokia and Blackberry, that every one of them has decided to go down the route of electric cars and self-driving cars — no one wants to be a victim of avoidable terrible circumstances resulting in massive layoffs.
I think my major concern in all of these is that some innocent people who weren’t partakers of the nefarious activities being perpetrated in the diamond industry will lose their source of livelihood if all companies decide to start creating a lab-grown diamond.
We have a few companies — Rock Her — that have taken drastic actions to ensure that they only sell non-conflict diamonds, and De Beers Group effort in ensuring traceability of mined diamonds led to the formation of Tracr which is powered by blockchain technology. However, is it enough to encourage sceptics to ditch the idea of lab-grown diamonds?
To grow the idea of lab-grown diamonds, you might have to target Generation Z (born between 1997 and 2012/15) since they are avid shoppers. This demographic is appropriate because you have both the people that prefer fast fashion and those who care about the environment. So, these individuals can either decide to buy many lab-grown diamonds because of the cheap price or due to it being environmentally friendly. Labelling lab-grown diamonds as ‘lab-grown will ensure that consumers are aware of what they are purchasing instead of making them assume that they bought a mined diamond.
It’s also noteworthy that people classified under Generation Z have idols/celebrities that can influence their shopping decisions. I observed that luxury retailers engaged the services of a lot of these idols as brand ambassadors during the lockdown to promote their products via Instagram, Clubhouse, and TikTok. A lab-grown diamond can be bought to celebrate things like graduation from University, a first job, pregnancy and childbirth. We have some parents that wouldn’t mind spending $800 on their children’s preferred gift, I feel with the right marketing strategy, this could be a hit for the lab-grown diamond companies.
The Covid-19 pandemic must have created awareness around how our intended or unintended actions on the environment can affect our health and result in a high mortality rate. As a result, the constant reminder of global warming and the fear of a not-so-distant negative effect of emissions on humans might make us have a rethink when shopping for a diamond. The only route to getting a diamond in the future might just be a lab-grown diamond, whilst the mined diamonds will become antiques that will command a very high price at Sotheby’s or Christie's auction houses.
As a business owner, you can shop for rough and polished diamonds from several platforms: UNI diamonds and Clara Diamond Solutions. If you want to lay your hands on a lab-grown diamond, then check out Pandora Brilliance, Lightbox Jewelry (launched by De Beers Group — world’s biggest diamond producer by value), Clean Origin, and Signet Jewelers owned companies — Kay, Zales, James Allen, and Jared. For mined diamonds, Tiffany and Rock Her might be the solution you need.
Strategic partnerships and a lab-owned diamond that can be customised including not losing its lustre might also attract the younger generation. The companies that decide to venture into lab-grown mineral resources — coltan, tungsten, etc — might be the newly-minted future Unicorns.
The fear of owning a blood or conflict diamond is real and your actions today will determine which side of history you will be on because it records every activity, and I hope you will be on the right side.
Luxury shopping is often based on emotions and exclusivity also plays a significant role in the ways you’ll react when you find a luxury item that you adore. In essence, the more difficult it is to lay your hands on an item that you desire, the more you keep thinking about how to tick this box in your growing bucket list. The diamond industry isn’t exempted from scarcity and this could lead to a surge in price, but I doubt if this would make a die-hard fan of mined diamonds go for the readily-available alternative (lab-grown diamonds).
Although a lab-grown diamond is not Zirconia (Zirconium Oxide: used as a synthetic substitute for diamonds in Jewelry), is it the real deal?
Also, for Pandora to totally boycott the mined diamond industry, it must be possible for Pandora to be able to use the lab-grown diamond as the seed for creating a new lab-grown diamond.
As usual, the Dartemuv team just want to say thank you for reading this article and we hope to bring you more…
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