Why Lab Diamonds will Not Reduce the Price of Mined Diamonds
The misconception that lab diamonds will 'destroy' the value of mined diamonds hinges on three incorrect assumptions:
- Diamonds are rare
- There will be enough diamonds grown in labs around the world to reduce that rarity
- It is far cheaper to grow diamonds than it is to mine them
Combining data from the Gemological Institute of America (GIA) and the Kimberley Process, approximately 6 billion carats of diamonds have been mined out of the Earth since antiquity. According to GIA, "The total global production from antiquity to 2005 is estimated to be 4.5 billion carats valued at US$300 billion, with an average value per carat of $67." From that 6 billion carats of mined rough diamonds, there are approximately one billion carats of diamond gemstones that were cut and polished and are now owned by individuals all over the world.
In 2017, approximately 142 million carats of diamonds will be mined out of the Earth and approximately 2.3 to 4.2 million carats will be grown (according to a recent global survey). Thus, lab diamonds only make up 1.6 to 2.9% of annual global diamond production today. Morgan Stanley predicts that portion of lab diamond sales will rise to 7.5 to 15% by 2020.
Ada believes the much larger threat to the value of mined diamonds is the recycling and resale of previously mined diamonds, a space that De Beers recently entered. Experts estimate that the Baby Boomer Generation in the United States owns over 500 million carats of diamond gemstones which will be inherited or resold in the next few decades. These diamonds will be gifted or sold. These 'used' diamonds are often recut and reset, then sold as 'new' mined diamonds.