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The diamond industry is preparing to shake up global giant De Beers, which is poised to make its first foray into synthetic diamond jewelry later this year in the United States.
The move will significantly reduce the cost of laboratory-grown diamond jewelery, which currently accounts for between one-third and one-half the price of natural diamonds.
De Beers created the slogan of the century, A diamond is forever, which represented a diamond ring as a symbol of eternal love.
But now, the attractiveness of natural diamonds is being challenged by the increasing quality of synthetics.
It is impossible to distinguish a synthetic from a natural diamond at the naked eye and at the molecular level they are identical.
In an interview with The Business, De Beers' CFO, Nimesh Patel, said the move as a good business opportunity despite promising in the past that he would never enter the sector manufactured precious stones.
"It's a combination of pinks and blues with colorless stones in necklaces and earrings designed for the most playful and light occasions.They are suitable for laboratories where the natural is much more concentrated. " Mr. Patel said.
The Price of Synthetic Fibers is More Attractive to Millennials
It is an attempt by the Diamond Giant to tackle new synthetic diamond disruptors such as Diamond Foundary, supported by American actor Leonardo DiCaprio.
De Beer's laboratory-grown diamonds account for about one-fifth of the price of their natural counterparts
But Patel denies that De Beers is trying to undermine its synthetic diamond rivals.
"The cost of growth of half a carat is exactly half the cost of growth of a carat that allows us to sell half a carat for $ 400 and one carat at $ 800 any by earning a margin and an attractive return on capital, "he said.
However, experts in the diamond industry, Rapaport, said that the entry of De Beers in synthetic products would undermine the laboratory industry and compete with natural diamond fashion jewelry Low cost.
Katrina Marchioni, Sales Manager and Evaluator, works for Trewarne Jewelery in Melbourne.
She agrees that the entry of De Beers into the laboratory market will reduce the cost of synthetic jewelry.
"I think De Beers sees this as a direct threat to their main business which is of course the diamond mining and selling so that they have drawn a very clear line in the sand" said Ms. Marchioni. At the moment, the low-end sells natural diamonds of very low quality, so they do not shine much, and they are not beautiful, whereas if we replace them with synthetics, the low-end market will become much more beautiful. product looking. "
Bill Sechos, of the Gem Studies Laboratory, is one of Australia's best-known diamond experts.
He sees the De Beers move as a smart marketing strategy that will appeal to consumers mindful of their budget.
"It seems that millennia are more interested in prices and the fact that they still love a diamond, but they are not particularly worried about it." from a natural or synthetic diamond. diamond, "he said.
However, Mr. Patel stated that De Beers' research proves the opposite.
"Millennia have a close affinity with natural diamonds, a little less than fifty percent of natural diamonds are now bought by the millennial generation," he said.
The increasing quality and lower price of laboratory-grown diamonds has already allowed some consumers to choose synthetic gems rather than natural diamonds.
Adrian Lee of Diamond Brokers Queensland sells synthetic diamond jewelry and estimates that they account for about 10% of his sales.
He said that his main demands came from consumers concerned about ethics and who want a diamond that is not the product of mining.
The Showcase jewelry chain recently started selling the American brand ALTR Created Diamonds in 20 stores across Australia and New Zealand, and plans to triple that number by Christmas here.
Craig Miller, a diamond buyer at Showcase Jewelers, said the response from customers was positive.
"The consumer is engaged and bought: it is rather to ensure that the consumer gets a bigger stone for the same price," he said.
million. Miller said that De Beers' announcement in the synthetic jewelery market had helped educate consumers about diamonds grown in the lab.
"I think De Beers sees the reality that lab-grown diamonds or created diamonds are going to be a big part of the future and I firmly believe that they want to be part of it," he said.
The increase of synthetic materials carries a risk
Improving the quality of synthetic fibers also increases the risk that diamonds grown in the laboratory are fraudulently sold as natural.
million. Sechos said specialized devices and computer programs are needed to differentiate between a laboratory grown stone and a natural stone.
"There is always this risk because if someone has the means and the will to do it, he could do the diamond anonymously and pbad it on without anyone knowing that there is a difference ", he said.
Manufactured diamond sales are low with investment bank badysts, Morgan Stanley estimating lab diamond sales at between $ 101.5 and $ 270.8 million in 2016.
But she Predicts Synthetics Could Consume 15% of Diamonds Dr. Miller said that diamonds grown in the lab could take market share from natural diamonds and that miners need to increase their commercialization.
"I think it will hurt the mining industry in the short term, but at the same time, it could increase awareness and desire to wear jewelry and make it more affordable," he said. he says.
But purists like Ms. Marchioni are not convinced.
"The diamonds we sell are really special and we would never look at synthetic diamonds," she said.
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