Diamonds Pass Lab Tests – Investors’ Chronicle

On a few visits to Hatton Garden over the past month, I’ve been surprised at how far the retail space has shifted to lab-grown diamonds in the heart of London’s jewelery district.

There have been many headlines over the years about young buyers preferring these to mined diamonds, but in fact seeing jewelers advertising their stones as lab grown stones has hammered change into the market. .

To be clear, the impact is still limited at the other end of the supply chain. De Beers, the world’s second-largest producer, saw slightly weaker sales in its most recent ‘cycle’ compared to the previous one, but these were still well ahead of last year, at 630 million (£518m) from $514m. Admittedly, part of the price strength is due to Russian diamonds exiting the market, after the world’s largest producer Alrosa was sanctioned and some retailers withdrew their Russian-origin diamonds from sale.

The boss of the De Beers parent company Anglo-American (AAL), Duncan Wanblad, pointed last week to heightened consumer expectations about provenance. He said the top priority for buyers is to “ensure they have a diamond that is from a good source and produced in a sustainable way”.

Without getting bogged down in defining what makes something durable, lab-grown diamonds have some definite advantages on that front: there’s no mine, and they can actually go straight to the “reactor” cut. in which they are created. The process takes a lot of energy, as mining officials are keen to point out, but there are solutions to that. India’s Hari Krishna (that’s a real business name, and he’s a big player in the diamond business), for example, stuck solar panels on the roof of his test plant to cut costs and associated carbon emissions.

The boss of its laboratory division, George Prout, said the industry had changed significantly in just a few years. “It’s almost like a switch has been turned on [with jewellers]he said, speaking on diamond expert Paul Zimnisky’s podcast recently about the demand for lab jewelry.

However, the market for mined stones is unlikely to die out when it comes to medium and large sized stones, and London has its fair share of Africa-based diamond miners where investors can find some sparkle. . It takes some confidence in consumer purchases to dive in now, but there are options like Gem Diamonds (GEMD)that regularly produces large stones of 100 carats or more, and Gem Fields (GEM)which plays more clearly on the purchase of luxury because it extracts emeralds and rubies and owns the jeweler Fabergé.

As for my own time at Hatton Garden – lab grown or newly mined diamond? Neither. Ancient.

Sarah C. Figueiredo