Humanity has always valued natural diamonds. These diamonds are mined from the earth where they are formed over a period of time if the conditions are conductive. As an alternative, these days synthetic, man-made and lab-grown diamonds are available. Lab grown diamonds (LGDs) are just like natural diamonds and are grown in a reactor using a thin slice of high-quality diamond that service as a seed for growing them.
Diamonds need specific temperatures, environment and gases to grow. These conditions are replicated inside the reactor exposing the seeds to carbon-rich gases and carbon deposits. The process mimics natural conditions but occurs in less time. The process is called Chemical Vapour Deposition (CVD). It produces CVD diamonds.
The largest LGD manufacturers account for 25 percent of India’s production. There are several manufacturers in Surat. Kira Diam, one such prominent manufacturer has 7-lac square feet facility with 2500 machines, and it produces around 1.5 lac carats of polished diamonds per month.
The whole cycle from seed to diamond takes 25-30 days, followed by 45 days of cutting and polishing.
The lab-grown diamond jewellery market has been valued at $264.5 million in 2022. It is expected to grow at a CAGR of 14.8 per cent over the next decade, so as to reach $1.9 billion by 2033. The spike in demand is driven by millennials. The rising demand led to higher prices and margins. It has attracted more players. This influx has resulted in oversupply, and a consequent fall in prices. What was selling at Rs.60000 per carat is now available at Rs.20000 per carat. The LGD production units operating in India are 10000.
Though India is one of the leading producers of LGDs, the biggest consumer market for LGDs is the USA. LGDs in the USA account 60 per cent of the market.
Indian retailers resist the presence of LGDs, but this resistance is decreasing.
Though LGDs are price competitive, the consumers do not find them as good investments. They lack the resale value. As it is, diamonds, whether natural or lab-grown, are not ideal investments. Unlike gold, they do not guarantee price increase.
Traditional mining involves the abuse of human rights. Thus, youngsters find the LGDs a guilt-free use item. Besides, we can make many designs out of LGDs, which we cannot from natural diamonds on account high losses.
Natural diamonds are within the reach of 1 per cent affluent people. LGDs can be afforded to the next 15-20 per cent of consumers.