Modern Mining March 2020

COMMODITY FOCUS – DIAMONDS

Levelling the diamond playing field The issue of laboratory-grown diamonds has been one of the key talking points in the global diamond market in the past three years. With the 2018 launch of its Lightbox synthetic diamond division, De Beers has successfully drawn a line in the sand between natural diamonds and those grown in a laboratory. Munesu Shoko speaks to Richard Steenkamp, sales manager of De Beers Group.

L ab-grown diamonds are a subject of rapidly growing interest in the jewellery industry. While they have existed since the 1950s, the man-made stones have recently become much more visible within the modern jewellery market, says Richard Steenkamp, sales manager of De Beers Group. To give an idea, in 2018 and 2019, production of lab-grown diamonds increased by 15 – 20%, with the majority being pro- duced in China, as found by the ninth annual report on the global diamond industry, compiled by the Antwerp World Diamond Centre and Bain & Company. According to Steenkamp, there have been an increas- ing number of new entrants into the lab-grown diamond market. “We have seen a growing number of companies starting to produce lab-grown diamonds in the past two to three years,” he says. De Beers’ response

The growth of the lab-grown diamonds market posed a major challenge to the diamond mining fraternity at large; the long-standing concern was the grow- ing level of consumer confusion about synthetics as a result of misleading information being com- municated about them. Leveraging over 50 years’ experience in the synthetic diamond industry through its Element Six business, De Beers estab- lished Lightbox in 2018 to separately brand and sell synthetic diamonds in jewellery, and to provide clear and accurate information to consumers. According to Steenkamp, the main purpose of the initiative was to clearly differentiate between natural diamonds, and those grown in a laboratory, as the two product categories have different value

Richard Steenkamp, sales manager of De Beers Group.

propositions. Steenkamp highlights that prior to De Beers’ entry into the lab-grown diamond market, man-made stones were frequently being sold with unsustainable margins at a price that had no correla- tion to their much lower cost of production. Since Lightbox’s sale of its first diamond in September 2018, indications are that the price gap between the two has widened. At the time of Lightbox’s launch in June 2018, a 1 carat synthetic diamond cost about US$4 200 while an equivalent natural gem sold for US$6 000. But since September 2018, De Beers has been selling gem-quality man- made stones for just US$800 a carat. “Before we launched Lightbox, most lab-grown diamonds cost about two-thirds the price of the equivalent natural diamond. Our strategy was to be clear about the distinction between natural diamonds and their lab-grown counterparts – in terms of their origins, their socioeconomic impact and their value proposition – so as to eliminate confusion in the eyes of the consumer. The strategy is yielding targeted results – following our entry into this market, con- sumer understanding has improved,” he says.

Rough diamonds used for Talisman collection, De Beers Jewellers, NYC.

14  MODERN MINING  March 2020