‘Lab-grown diamonds, branded wrongly as fake, are a $22 billion market across the world’.
New Delhi: Finance Minister Nirmala Sitharaman’s recent focus on lab-grown diamonds has set the proverbial cat among pigeons in the global diamond markets. And it is because India is a top player in the global diamond market.
India’s prowess to push lab-grown diamonds is well known. Many top Indian merchants wanted to push this segment almost a decade-and-a-half ago, but were prevented and even maligned by some of the world’s top diamond brands who argued for natural, mined diamonds. Lab-grown diamonds—it is reliably learnt—were even branded wrongly as fake.
But now, the markets have changed, lab-grown diamonds are a $22 billion market across the world.
Most retailers are now being taught that beyond their disparate origins, lab-grown diamonds are chemically, optically, and physically identical. And there is no difference between lab-grown diamonds and the ones mined.
This is not all. Lab-grown diamonds are much cheaper than those mined. And this is exactly the message New Delhi wanted the world diamond market to convey to consumers.
During her budget speech, Sitharaman announced the government’s move to focus on lab-grown diamonds. “Customs duty on the seeds used in lab-grown diamond manufacturing will be reduced”, announced the finance minister. She also announced a grant to IITs to facilitate the growth of lab-grown diamonds in India.
Lab-grown diamonds are produced using specific technology which mimics the geological processes that grow natural diamonds. These are not the same as diamond simulants. The Indian diamond market, considered among the biggest in the world, is now hyperactive on lab-grown diamonds.
Commerce ministry officials told this reporter that FM Sitharaman’s call has given the much-needed boost in India’s diamond industry. Diamond merchants in Surat, the world’s diamond polishing capital, are doubly-charged up because of this seismic shift in the diamond industry.
Scientists in Antwerp say natural diamonds are formed at great heat and pressure deep underground. For more than five decades, scientists have tried to recreate that process above ground—resulting in modern techniques. In one way, a diamond seed is surrounded by pure graphite (a type of carbon) and exposed to temperatures of about 1,500C and pressurised to approximately 1.5 million pounds per square inch in a chamber.
There is another process called Chemical Vapour Deposition (CVD) that involves putting the seed in a sealed chamber filled with carbon-rich gas and heating to around 800C. The gas sticks to the seed, building up a diamond atom by atom. Now, lab-grown diamonds are so refined it can be sold as jewellery.
India has long played a key role in the diamond industry—it’s estimated that nine out of 10 of the world’s diamonds are polished in Surat. Until two years ago, diamonds found and inspected in Africa, Australia and Russia and sent to India were ones pulled from the ground at diamond mines. And what is interesting for the market is the rates for lab-grown diamonds are almost 40% less than the naturally mined diamonds.
India already produces around three million lab-grown diamonds a year, accounting for 15 percent of global production, claim ministry officials. China is the other big producer, with a similar market share. Today, it costs $300 to $500 per carat to produce a CVD lab-grown diamond, compared with $4,000 per carat in 2008, says the Antwerp-based World Diamond Centre.
And expectedly, the world is taking notice. Consider this one. Meghan Markle in 2019 emerged onto a London street on her way to a meeting and she was wearing a pair of glittering drop earrings embedded with diamonds that had been grown in a lab. The global media went berserk. The British Broadcasting Corporation (BBC) said in a report that it took just five days to grow the diamonds adorning Markle’s ears. The diamonds were made by Kimaï, a company based in Antwerp, the capital of the world’s diamond business. And what was interesting is that despite specialising in marketing naturally mined diamonds, Kimaï chose to break away from conventional diamonds because of the environmental and humanitarian toll of extracting them. “Millennials and now Generation Z—who together are the main purchasers of diamonds for engagement rings—are moving away from conventional diamonds,” the BBC said in a 2020 report.
And then, you need to shift 250 tonnes of earth for every single carat of diamond. An estimated 57 kg of carbon is released into the atmosphere for every single carat mined. But lab-grown diamonds release barely more than a few grams, says a report. Researchers at Anglo American, the parent company of De Beers, have also been working on a project to reduce the carbon footprint of mined diamonds by capturing carbon dioxide inside a porous mined rock known as kimberlite.
Olya Linde, a Zurich-based partner with Bain and Company’s Natural Resources practice, says since the early 2000s the cost of producing lab-grown diamonds has halved every four years. And falling costs have attracted entrepreneurs.
And there are other issues. The Wall Street Journal said in a report in 2016 that De Beers had killed over 18,000 fish draining a Canadian lake for diamond mining. Some diamond mines recruit miners on low wages and make them work in horrible conditions. A 2018 report from Human Rights Watch, which investigated major jewellers including Buglari, Pandora, Cartier and Tiffany & Co, says, “None of the companies can identify all of their diamonds’ individual mines of origin.”
The BBC said Brad Brooks-Rubin, previous special advisor on conflict diamonds to the US Department of State and now managing director at The Sentry/Enough Project, an organisation that aims to end mass atrocities in Africa’s deadliest conflict zones, asked: Is it ethical to guide people away from buying diamonds from developing countries, where a million people or more rely on the work?”
India is keen to move away from the contrived controversies by vested interests surrounding the naturally mined diamonds and create a market where the product could be matched with the mined diamonds and offered at a much lower rate.
Shantanu Guha Ray, Asia Editor of Central European News, is author of Diamond Trail: How India Rose To Global Domination by Harpers.