Lab-Grown Diamonds Sparkle in the Market, Challenging Traditional Gems

In Surat, India, a city that polishes 90 percent of the world’s diamonds, a new era is dawning with lab-grown diamonds reshaping the $89 billion global diamond jewelry market. These man-made gems, virtually indistinguishable from their natural counterparts, offer a more affordable and environmentally conscious alternative, costing less than half the price of mined diamonds.

At Greenlab Diamonds, technicians create diamonds by placing crystal diamond “seeds” into reactors that simulate the extreme underground conditions where natural diamonds form. This process, which takes less than eight weeks from seed to finished product, produces diamonds with the same chemical and optical properties as mined ones but at a fraction of the cost and environmental impact.

India’s export of lab-grown diamonds has seen a significant increase, with a 25 percent rise in export volumes between April and October 2023 compared to the same period the previous year. The global market share of lab-grown diamonds has surged from 3.5 percent in 2018 to 18.5 percent in 2023, exerting pressure on the traditional diamond industry already facing challenges from geopolitical turmoil and fluctuating demand.

Proponents of lab-grown diamonds argue that their production comes with a lower carbon footprint, especially when utilizing renewable energy sources like solar power. Additionally, lab-grown diamonds offer a guarantee against the ethical and environmental issues associated with mined diamonds, such as conflict diamonds and extensive environmental degradation.

The popularity of lab-grown diamonds, particularly for engagement rings in the United States, reflects a growing consumer preference for sustainable and ethically sourced jewelry. With an estimated 36 percent of diamond engagement rings sold in the U.S. in February 2023 featuring lab-grown stones, the trend appears to be gaining momentum.

However, the lab-grown diamond industry faces its challenges, including price volatility and market saturation. Wholesale prices for these diamonds have plummeted by 58 percent in 2023 alone, leading to a decrease in the price of a one-carat polished stone from $2,400 in 2022 to just over $1,000 in 2023.

Despite these challenges, industry experts and consumers alike see the potential for lab-grown diamonds to democratize the luxury of diamonds, making them accessible to a broader audience without the ethical and environmental costs associated with traditional diamond mining.

As the industry evolves, the competition between lab-grown and natural diamonds is likely to intensify, with both sides vying for market dominance in an increasingly eco-conscious and value-driven global marketplace.