There has been much discussion and debate in Antwerp this month regarding the recent Federal Trade Commission (FTC) warnings that have been sent to lab-grown diamond companies in America.
To the naked eye, a lab grown and a real diamond might look similar, but the two have a few different characteristics. Natural or real diamonds were formed around 150 km to 200 km below the earths crust over 3 billion years ago making these stones more unique, while synthetic diamonds are grown in a laboratory.
Letters have gone to eight companies – including the Leonardo DiCaprio-backed, Diamond Foundry – stating the clear messaging they need to use in all their advertising and marketing to ensure consumers are not confused or mis-sold laboratory-grown diamonds when believing they may be purchasing mined diamonds.
From ensuring they use “clear and conspicuous” disclosure by using phrases such as ‘laboratory-grown’, ‘laboratory-created’ or ‘[manufacturer]-created’ with the word diamond, to using detailed #hashtags in their social media posts to make it clear they are not mined diamonds, while this is a positive result for the diamond mining industry there are important lessons we should take onboard from the FTC’s attempts to clarify the consumers’ position.
Firstly, it is clear that the laboratory-grown diamond market is not going anywhere – in fact it is continuing to grow especially with the socially-conscious millennial generation who are looking for what they believe to be eco-friendly, sustainable alternatives to mined diamonds. How we respond to this is will be one for the whole industry to take a role in…
Secondly, transparent sourcing is vital if we want to address the concerns of the next generation of consumers who want to know where our mined diamonds are coming from. They look to make intelligent, researched purchases with a clear understanding of the processes and the origins, and with a lot of false assumptions about the industry and a chequered history that we are still having to answer to, today a mined diamond needs to be more than just a stone or a piece… it needs to be the whole journey right back to the mines and the miners themselves.
Thirdly – and most importantly – it is this story that we have to tell as a diamond mining industry. We need to remind (or re-educate?) the new generation of clients just how far we have come as an industry and the positive impact we are making on mining communities. With my own family-leased mines in Sierra Leone, I have seen first-hand how the investment and education we are bringing to the area is having a long-term positive impact on all members of the community. And with the strict regulations we now have in place and the Kimberly Certifications that govern all international diamond mining operations, we are able to show our clients how their investment has a far wider impact that goes beyond what any ‘men in white coats’ could achieve.
And finally, if we are talking about investment, the spotlight that this latest action from the FTC has had on the lab-grown industry is flagging up concerns about the long-term investment potential for these manufactured diamonds. So new to the market, we don’t know how strong the re-sale value will be on these stones – the market’s opinion on this is next to nothing - so while they may be on an average 30% cheaper than mined diamonds, as a long-term asset are they really worth it?
And again, this is part of the all the stories we in Antwerp and other diamond centres of the world will have to start telling with a little more clarity.