Can Diamonds Made In A Lab Replace Natural Ones? | Rise And Fall

It might seem like diamond jewelry has been around forever, but it's only relatively recently that gems like these have been a girl's best friend. But this massive industry doesn't exactly have a flawless reputation. For years, diamonds have been linked to conflict and corruption. And now consumers can buy ones grown in a lab for a fraction of the cost. So is this the future of diamonds? Or will the glamour and romance of natural diamonds last forever? It took billions of years for diamonds to form beneath the Earth's crust before they were discovered in India. Cutting and polishing brought the rough stones to life and gave them value. Diamonds soon adorned nobles and royals, and were prized by India's colonial rulers, the British. For centuries, it was thought that India was the only source of diamonds, until gold miners accidentally discovered some in Brazil. But it was an event in South Africa around 1867 that changed the game forever. The story goes that a 15-year-old boy discovered a 21-carat diamond on a riverbank. No one expected to find diamonds in that area. This discovery sparked a rush of prospectors to the region. There's something like 50,000 people who suddenly appear in the middle of essentially nowhere. One of them was Cecil Rhodes. That's the same Cecil Rhodes who has been the subject of protests in recent years because of his colonial legacy. Back in the 1880s, he created the De Beers Mining Company, a name that would soon become synonymous with diamonds. The company bought out its competitors and eventually controlled the Kimberley Mine, also known as the Big Hole. By 1888, miners had extracted $450 million worth of diamonds, more than $13 billion today. And by the early 1900s, De Beers controlled 90% of the world's diamond production. That meant it could also control the price. Here's how it worked. De Beers created what was called a diamond syndicate in London. It sold rough diamonds to the syndicate, which could limit the global supply to inflate prices. The syndicate is absolutely key to a highly profitable industry. That's why diamonds remain so high in price. It will ride up really until present day times. And while Rhodes and others amassed enormous wealth, Black South African miners earned about $5 per week in 1888. They also worked in dangerous conditions and were forced to live in unsanitary mining compounds, where disease was an even bigger threat. Production rose to 15.2 million carats in 1950 as prospectors discovered diamonds in countries like Angola and Sierra Leone. You may have to sort through a truckload of earth before you find one, but just one decent-sized diamond could set you up for life. But most of these mines were controlled by European companies. In other words, it was foreigners who were reaping all of the rewards. And demand kept rising. But diamond engagement rings still weren't that popular. In fact, only 10% of American brides had one in 1940. An ad campaign from De Beers soon changed that. The message was clear. If you loved someone, only a diamond would do. Essentially what De Beers did is said, we want to approach everybody, not just the Elizabeth Taylors of the world. We want to approach people that are middle class. It worked. Five decades after the campaign started, 80% of brides were engaged with a diamond. And get this, De Beers was not only telling couples what to buy, but how much they should spend. How else could two months' salary last forever? And in the late 90s, two months of an average salary was almost $5,000, or more than $8,000 today. But behind all the romance, another story of diamonds was unfolding. More and more unregulated mines were beginning to feed diamonds into the market. And in countries like Sierra Leone, militia groups used diamonds to fund brutal civil wars. They were called blood diamonds because a lot of people lost their lives. They were killed, they were maimed, they were injured by rebels who were seeking to control their diamond mining sites. Violent conflict tainted an industry that took pride in an image of purity. Diamond's a pure product. It's not something that we like to have any association with bloodshed or anything of that kind. In 2002, governments and mining companies made an effort to clean up the supply chain. The Kimberley process was established to fight against the use of diamonds in buying arms of war and fueling conflict in those situations where there are rebel movements. But blood diamonds had already attracted Hollywood's attention. That diamond could be priceless. The 2006 blockbuster starring Leonardo DiCaprio put the diamond industry on edge. What is particularly disturbing is it shows the awful period of the conflict. Our goal was not to discourage people from buying diamonds or wearing diamonds. It's really to shine light on the way Western companies do business in Africa. Activists hoped it might make a difference. And we're trying to create a world where people can go in and buy diamonds and know that those diamonds don't have blood on them. Demand didn't really change, but De Beers had other problems. In the early 2000s, the company pleaded guilty to price-fixing. A few years later, it paid almost $300 million to settle class-action lawsuits accusing it of allegedly overcharging for diamonds. De Beers could no longer operate as a monopoly, and its century-long reign as the world's largest diamond producer was coming to a close. In 2014, the Russian company Alrosa became the biggest diamond supplier. Since then, De Beers' revenue has declined by more than half. And now there is another threat to the diamond industry. Diamonds, the ones that are grown in a lab. Unlike moissanite or cubic zirconia, lab-grown diamonds are chemically identical to the ones that come from a mine. There's almost no differences between lab-grown diamonds and mined diamonds. One is just manufactured, and the other one comes from the earth. Diamond Foundry in California has been growing diamonds since 2015. It all starts with a diamond seed. And it can be a mined diamond or a lab-grown diamond that you start the process from. Lasers slice the diamond into thin layers. These seeds go into a plasma reactor that's as hot as the outer layer of the sun. It takes just a few weeks to go from this to this. You can see it's kind of in its rough form, just like you would find in the earth. In fact, if you saw it, it looks like a pebble or stone that you might see on the sand and beach. You wouldn't necessarily recognize it. Jewelers cut and set the gems, which are then sold under the company's brand, Vrae. A two-carat ring like this costs around $4,000. That's less than one month of today's average salary in the U.S. We're creating this absolutely gorgeous piece. It's at a more affordable price point, so it's kind of an accessible luxury. And it's a growing market. In 2010, less than 10% of consumers knew about lab-grown diamonds. But in 2018, consumer awareness had grown to over 50%. Experts estimate the market volume will grow to 19.2 million carats in 2030, as retailers like Pandora are swapping mined diamonds for lab-grown ones. Diamond Foundry says within the next five years, it will produce 10 million carats per year, and not just for jewelry. Diamond has huge implications in cloud computing, 5G, 6G technologies, AI, and electric cars. Even De Beers got in on the action and launched a lab-grown brand in 2018. So what will happen to diamond mines? Global production fell to 111 million carats in 2020. That's because major mines are closing, like this one that was famous for its pink diamonds. And the controversy around supply chain transparency and the legacy of conflict is something mining companies are still trying to escape, especially as studies show that younger consumers care more about ethics. But experts say diamond mining shouldn't be written off just yet. This is an important source of livelihood, but I think in order for African countries to benefit, they should clean up their act so that the natural diamond can compete with the lab-grown diamonds. And diamond jewelry remains popular. Even sales that dipped in 2020 are back in full force. This year, we're already looking at probably around $94, $95 billion. So whether they're mined from the earth or grown in a lab, diamonds haven't yet lost their shine.