The spread of synthetic diamonds globally, originally designed for industrial purposes such as oil drilling, is posing such a threat to the diamond market that it has forced dominant player De Beers to invest tens of millions of dollars to “stabilize the market”.
The shocking revelation was made this week by Minister responsible for minerals Eric Molale in the capital Gaborone.
Molale was answering a question from a journalist at a press conference which was also addressed by the President Mokgweetsi Masisi.
In his explanation on why De Beers, a company that government has stake in, and also co-owns Debswana Ming Company with has decided to join companies that sell synthetic diamonds, Molale said the move will help stabiles the market as De Beers will be selling its fake stones at a below market price which would help stabilize the prices of the natural stones.
De Beers, a company co-owned by the Botswana government and Anglo American announced on Tuesday that it was launching a new U.S Production Company called Lightbox Jewelry with a line of lab-grown diamonds that will sell for far less than nature-made gems.
“We have partnered with De Beers over the past 30 years to do a research on synthetics”, Molale said.
De Beers on Tuesday indicated that the new lab grown diamonds will begin marketing at prices up to 75 percent lower than other synthetics in the market.
Starting in September the laboratory-made diamonds will retail from $200 for a quarter-carat stone to $800 for a 1-carat gem even though the announcement marks a business strategy change for De Beers from its previous stance of not offering shoppers lab-made diamonds.
De Beers’ Executive Vice President, commercial and partnerships, Alessandra Berridge says the synthetic diamonds are for fun and fashion, as the company is a leader in technology and ensure security processes to guarantee the genuineness of natural stones.
Speaking at the media release held recently Berridge noted that, “We have learned from our research that there is a lot of confusion about lab grown diamonds-what they are, how they differ from natural diamonds and how they are valued.”
She said to ensure that there is no confusion between manmade gems that have little resale value and the real thing, the manufactured diamonds used in jewellery will include a tiny mark showing that they are made by Element Six, a unit with more than 50 years experience as a mark of quality and assurance.
Berridge stated that any lab grown diamonds of 0.2 carats or above will carry a permanent Lightbox logo inside the stone which will be invisible to the naked eye but easily identified under magnification.
“Consumers will be offered something new with sparkle and colours such as pink, blue and white in a selection of accessibility priced earring and necklace designs,” she added.
However Berridge said since Botswana has a 15-percent shareholding in De Beers it would not be affected by the company’s decision to sell synthetic diamonds.
De Beers Executive Vice President, Corporate Affairs, David Prager also stated that the Botswana government had been extensively consulted on and is so supportive about the introduction of the Lightbox brand.
De beers is so adamant that the man-made diamonds are not competing with mined stones that it will not grade them in the traditional way. That is a complete contrast to current man-made sellers who offer ratings such as clarity and colour, replicating terminology used for natural stones.
Meanwhile the company is investing $94-million over four years in a new production facility to be established by its subsidiary Element Six near Portland, Oregon. Once fully operational, De beers said the plant will be capable of producing upwards of 500 000 rough carats lab-grown diamonds a year.
Yet according to the Research and Markets the global synthetic diamond market was valued at USD 16.83 billion in 2016 and is expected to reach USD 23.8 billion by 2021, growing at a Compound Annual Growth Rate (CAGR) of 7.14 percent during the forecast period, 2016-2021.