“We’re not grading our lab-grown diamonds because we don’t think they deserve to be graded,” Cleaver said. “They’re all the same.”
The pricing strategy will also be different. De Beers plans to charge $200 for a quarter-carat, $400 for a half and $800 for a carat, another sharp break from natural stones that rise exponentially in price the bigger the diamond gets.
Man-Made Gems
While De Beers has never sold man-made diamonds for jewelry before, it’s very good at making them. The company’s Element Six unit is one of the world’s leading producers of synthetic diamonds, which are mostly used for industrial purposes. It has also been producing gem-quality stones for years to help it tell the difference between natural and man-made types and to reassure consumers that they’re buying the real thing.
Man-made gems currently make up a small part of the diamond market, but demand is increasing. Global diamond production was about 142 million carats last year, according to analyst Paul Zimnisky. That compares with lab production of less than 4.2 million carats, according to Bonas & Co.
De Beers has been researching lab-made diamonds since the end of World War II and accelerated its work after a Swedish company synthesized the first diamond in 1953. The company has focused on lab diamonds for industrial uses, but also kept investing in technology for jewelry-grade gems.
The shift to lab-diamond jewelry comes at a sensitive time for De Beers and its relationship with Botswana, the source of three-quarters of its diamonds. The two have a sales agreement that lets the company market and sell gems from Botswana, giving De Beers its power over global prices. The deal will soon be up for negotiation and Botswana is likely to push for more concessions.
On Tuesday, De Beers said it had extensive talks with Botswana about the decision to sell man-made diamonds and the country supports the move.
This article was provided by Bloomberg News.