Lab Grown vs Mined Diamonds – how will lab grown diamond affect the value of mined diamond trade in the long term?

Lab Grown diamonds is one topic which is not going away from the news or diamond trade discussion for the last few years.

Since the big announcement in early June by De beers that they are creating their own lab grown diamond jewelry line and then the second big announcement by US Federation Trade Commission’s (FTC) decision to remove the word ‘natural’ from its definition of diamonds they are thousands of articles discussing as to how this will affect the natural diamond trade.

So, in today’s blog post, I wanted to discuss what are lab grown diamonds really are, how to check for lab grown diamonds and finally my personal opinion on how lab grown diamonds will affect the overall natural diamond trade.

WHAT ARE LAB GROWN DIAMONDS?

In simple layman terms, Lab grown diamonds are the same as natural diamonds.

They both have same in
a) Chemical composition (pure carbon)
b) Crystal structure
c) Physical property (hardness & durability)

But, they are man-made and not formed inside the earth like natural diamonds.

HPHT

The process of making natural diamonds usually takes billions of years. The environment occurs deep inside the earth’s curst through ‘high-pressure high temperature’ (HPHT).

Coal and graphite, like the diamond, are also pure carbon. Yet, they both were not exposed to the same HPHT environment. That is why these pure carbon elements didn’t form and become a diamond.

So, for all the science geniuses out there who don’t want to spend their hard-earned money on a diamond. Why not propose to your girlfriend with a nice piece of coal or graphite?

THE MAKING PROCESS

In the 1950s, General Electric created machines that simulate the same environment (HPHT). This created the first lab grown in their labs. But, this process required very expensive equipment and a lot of energy. Also, the final results were not satisfactory. Most lab grown were either too ‘yellowish’ or ‘brownish’ in color.

There is now a newer and cheaper process called ‘CVD’ (Chemical Vapor Deposition). It has been in the market in the last 5 to 6 years.

Initially, CVD lab grown diamonds had the same issues like old HPHT diamonds. By producing only brownish color diamonds. But, after a lot of trial and error, producers have found ways to fix the issue. Most of the CVD diamonds now look almost colorless. Thus, are impossible to detect without sophisticated machinery.

If you would like to read more about both processes I recommend checking this GIA article: https://www.gia.edu/gia-news-research-improved-quality-identification-challenges

HOW TO CHECK FOR LAB GROWN DIAMONDS?

What is synthetic diamond? - Image of synthetic rough diamonds
Rough Lab Grown Diamond sold by Surat Dealer – © Jenu Jewel

Unlike synthetic color gemstones, lab grown diamonds are a lot more difficult to detect. Most don’t have any internal inclusions, eye visible indicators and most are very clean.

GIA has actually been proactive in trying to detect lab grown diamonds. It has a strong incentive to do so as they don’t want to lose their money-making business. Grading ‘natural diamond’ is GIA’s largest cash cow or bread earner.

GIA actually do have the most to lose if they cannot detect lab grown. The lab business is all people’s trust, thus detecting lab grown is very important.

Update in April 2023, there are rumors in the market that some lab grown diamonds cannot be detected as they are trying to make them ‘grow’ the same way natural diamonds.  If this is true this will hurt the trust in the business and hurt the ‘natural’ diamond business.   We will continue to check regarding this issue and will keep our blog readers updated.

BIG LABS CHECKING PROCESS

After testing hundreds of samples, GIA have found the following characteristics how lab grown diamonds differ from natural diamonds?

  • Large labs like GIA use spectral analysis, which can distinguish whether the diamonds were created by CVD or are natural diamonds.
    • Spectral analysis can see what exactly is the chemical composition of a diamond.
  • Grain patterns are different between natural and lab grown.  All diamonds have graining but the ‘pattern’ seen in nature is different from man-made ones.
  • Ultraviolet reaction is also different between lab grown and natural diamonds.  These can be seen by GIA’s DiamondView

HOW WILL LAB GROWN DIAMONDS AFFECT THE NATURAL DIAMOND TRADE?

There is a lot of panic in the natural diamond trade as lab grown diamonds have the exact same property as natural diamonds.  While it is true they are ‘near’ perfect substitutes, they are important differences.

We do have to remember that there is an ‘unlimited’ supply for lab grown diamonds as carbon is an abundant substance everywhere, which is how diamonds are made of.

While natural diamonds are limited to what is being mined or existing in the market.

BIG ISSUE – UNLIMITED SUPPLY

So based on a simple economic principle, when a resource has unlimited supply there is actually no limit on how low-priced it can be.  As any person or lab can produce an additional unit.

Lab grown diamonds have this issue while natural diamonds don’t.  Thus, lab grown diamonds in the long-term won’t have any value, while natural diamonds will keep theirs.

To prove my point I want to provide two examples in what is the difference between unlimited supply to limited supply?

EXAMPLES OF UNLIMITED SUPPLY

In history, we have seen an unlimited supply example many times in the currency market.  When a country prints unlimited money, its currency soon becomes worthless.

Famous examples include
a) German Papiermark after World War I
b) Zimbabwe Dollar in the 2010s.

To keep value even for the paper money you do have to limit the supply.

Zimbabwe Trillion_3_CROP
$100 trillion Zimbabwe bank note, couldn’t buy a candy with it.   Credit: Marianian/Creative Commons

Also, another closer example is what happened in the color gemstone trade. Invented in the 1880s (more than 100 hundred years ago), synthetic rubies can be produced in tons.

They are also perfect substitutes for natural rubies.
a) Color (actually better than natural)
b) Chemical composition
c) Crystal structure
d) Physical property.

However, in today’s market synthetic rubies have no value. The only cost is labor for cutting the stones.   While the highest quality unheated & untreated rubies have shot up in value. As they are very limited in supply.

The same can be seen for synthetic VS natural emeralds and sapphires as well.

CONFLICT DIAMOND ISSUE

Now another issue which is worrying, the diamond trade is the conflict diamond issue. The new generation is becoming more aware of how rough diamonds are being sourced and traded.  Also, popular movies like blood diamond helped bring this issue up.

They now want only 100% guaranteed conflict-free diamonds as people don’t want to sponsor these horrible acts.

This is one issue, I do agree with which has to be tackled by the natural diamond trade.   Long term, new technology will catch up and we will soon be able to trace natural diamonds.  For example, recently ‘nanoparticle’ technology was introduced in Zambian emeralds’ rough.

Once diamonds can are traceable, the trust will come back in the natural diamond business.

Therefore, long-term I do believe natural diamonds will be a better investment. The natural diamond trade has nothing to worry about lab grown diamonds taking over.

Avoid buying conflict diamonds - CanadaMark & GIA certificate copy of 1.02 carat, G-color, IF-clarity Diamond

Thai Native Gems – Conflict free diamond clause –

We at Thai Native Gems try our best to check the companies we deal with have a ‘conflict-free’ diamonds clause. Also, we only deal with companies that follow Kimberly Process. We check by looking at the company’s mission statement or manifesto.

As we truly believe in eradicating these horrible acts in the diamond trade. We will with the best of our ability and knowledge not trade or get any conflict or blood diamonds.

_______________

Thai Native Gems Diamond Search & Custom Engagement Ring service:

If you are in the market looking for the best diamond and custom hand made engagement ring.  Contact Us.  Let us know what your budget is and what you are looking for.

From this initial information, we will swiftly find and email you 4 to 5 center diamond options.  Unlike other traditional or online dealers, I am not looking to sell you anything. But will provide you honest, frank and objective opinion in what we think is best in the budget you offer.

This service is free, and there absolutely no commitment to buy any of our suggestions. The only thing you have to do is not respond to our email and you won’t hear from us again! So, you truly have nothing to lose!

How do we compile this diamond list?  Our search process is provided below:

1) We first will contact our local diamond supply network and check if there are any stones that fit your requirement in Bangkok. We have over 50 contacts in Bangkok and will check ALL to make sure we can provide you the best deal.

2) If not satisfied, we will then check online through our extensive global network sifting through over 900,000+ diamonds. and will find you the best diamond. The only setback when choosing the diamond from this global list is, it can take one to two weeks to arrive to Bangkok.

What type engagement rings can you make and how are they made?

1) We usually set our engagement rings in 18k yellow or white gold or 950 platinum settings.  Our rings are all hand-crafted and made by highly skilled Thai craftsmen.

Examples in some of the rings we made you can see on our YouTube channel and shown below:

YouTube Channel PLAY LIST


_____________
Contact us today to get all your wholesale gemstones, diamonds and jewelry needs.  We can Source, Search and Supply anything you require.   
What will you get if you contact us

  • Start a conversation with us at FB.com/ThaiNativeGems/
  • Get wholesale and highly competitive prices of gemstones & diamonds from anywhere through our extensive network of contacts around the world
  • All stones sold by us is verified in house by our GIA Graduate Gemologist or certified
  • We provide personalized service and NOT the same old “One Size Fits All” Approach

You can learn more by clicking here or image below

1 thought on “Lab Grown vs Mined Diamonds – how will lab grown diamond affect the value of mined diamond trade in the long term?”

  1. heneelshah

    Real Diamond Jewellery always charm you. Different -different types of diamond have a unique identity and history.

    This blog is helpful to check synthetic colour gemstones.

Leave a Comment

Your email address will not be published. Required fields are marked *