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Traders don’t take a shine to lab-grown diamonds

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Mumbai’s diamond traders are a worried lot. With the world’s largest diamond producing company De Beers announcing that it will start selling synthetic diamond jewellery, traders are worried that this will not bode well for the diamond industry.

They fear that the advent of cheaper lab-made diamonds might send the industry the same way as the pearl industry after the invention of cultured pearl in the early part of the twentieth century.

While the technology to produce diamonds in the lab is almost 50 years old, so far such diamonds have mostly been used in the engineering industry or as cutting tools, lenses or in the space industry. However, De Beers, which has over the years created the allure of diamond as something rare and eternal, announced last month that it would launch a brand called Lightbox to sell synthetic diamond jewellery from September this year. “Lab grown are not special, they’re not real, they’re not unique. You can make exactly the same one again and again,” Bruce Cleaver, chief executive officer of De Beers, had said at the time of the launch.

On Wednesday, the company called a meeting of diamond traders in Mumbai to assure them that the Lightbox business will constitute only a miniscule percentage of the overall business of De Beers business and that the diamonds would only be in the form of jewellery pieces and not sold loose.

The company also sought to assure traders that the preference of customers is for natural diamonds as customer research shows that people prefer to buy the real stone for important occasions like engagement, wedding or anniversary.

However, diamond traders were not reassured by De Beers’ promises. Speaking to Mirror, Mahendra Gandhi, president of Mumbai Diamond Traders Association said, “Earlier, De Beers used to say that they would never enter the synthetic diamond business and now they are. So why should we believe that it will only be a fraction of their business and won’t become their main business.”

The price differential between natural diamond and synthetic diamond is currently 40 per cent, which means that if the price of 1 carat natural diamond is $100, a synthetic diamond would be available for $60. And, in times to come, it is expected to fall to $25.

Gandhi further said, “We fear that the extensive use of synthetic diamond will drive down prices of natural diamond also and it will affect our margins.” The synthetic diamond is produced from the seed of a flawless natural diamond. A flawless diamond produced in a lab can also be used as a seed. The production facility needs 24×7 power supply at a steady voltage and a totally dust-free environment.

Some diamond businessmen also expressed the fear that some unscrupulous traders would mix natural diamonds and synthetic diamonds. However, Anoop Mehta, president of Bharat Diamond Bourse (BDB), which is the world’s largest diamond bourse, was more cautious. He said, “As long as synthetic diamonds are sold as synthetic diamonds and they are certified as synthetic, the BDB has no problem with such diamonds.”

Courtesy: Mumbai Mirror/ Image: riograndeblog.com

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