Lab-grown diamonds are booming, natural diamond prices are falling, and a century-old industry is losing its grip.
Background:
A diamond is made of the same stuff in your pencil, your barbecue and your tyres: carbon. Natural diamonds form about 150 kilometres underground, under enormous heat and pressure, over roughly one to three billion years.
And in the early 20th century, a company called De Beers dominated the supply of diamonds. Founded in 1888 in South Africa … De Beers controlled around 80-90% of the world's rough diamond supply for most of the 20th century.
How? De Beers would restrict supply of diamonds to manufacture demand. And in 1938, the diamond making giant hired a famous American ad agency with one brief: convince people they needed diamonds.
In 1939, De Beers' diamond sales were sitting at $23 million.
By 1947, "a diamond is forever,” became the slogan of the century.
By 1990, 80% of first-time brides received a diamond ring (up from 10% in 1940).
Because if diamonds are forever, you don't resell them. De Beers had built a marketing campaign that suppressed a secondary market.
And by 2022, diamond sales grew to its peak of $6.6 billion.
Where we're at today:
The diamond machine ran perfectly for 80 years… until scientists figured out how to grow chemically identical diamonds in a laboratory.
So now, diamonds can be grown in labs that are physically, chemically and optically identical to a mined diamond. Even a standard geologist can’t tell the difference.
And like all new technologies, the lab-grown diamonds were also expensive at first. But then, the cost of these diamonds collapsed.
The wholesale price of a one-carat lab diamond fell from around $3,410 in January 2020 to under $900 by the end of 2024.
Now? Lab grown diamonds are 80 to 90% cheaper than an equivalent natural stone. And by 2025, around 52% of diamonds purchased were lab-grown. That same year, De Beers posted a $511 million EBITDA loss.
And retailers are already following the money. Pandora (the world's largest jewellery brand) dropped natural diamonds entirely and pivoted to lab grown... helping its sales grow.
Where to from here:
The diamond industry crisis is what happens when a product's value is almost entirely constructed…and not inherent.
The brutal irony is that lab-grown diamonds are as real as mined diamonds.
So, if you bought a diamond engagement ring, or received one, you’re now sitting on an asset that has lost significant value.
There's also a real human cost in what's unravelling: the economies of Botswana, Namibia and Angola are largely built around diamonds. The slowdown in mined diamonds means job cuts, the production slowdowns and slower royalty revenues.
The winners? Pandora, Signet, lab-grown retailers with low-cost bases… and anyone selling the machines that grow diamonds.
The losers? Miners, the economies that depend on them, and everyone who bought a natural diamond as an "investment."
Because while they always said that diamonds are forever, it turns out, the monopoly wasn't.
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