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Why do lab grown diamonds cost so much money?

BY Priya Raj

10th Jul 2023 Fashion & Beauty

Why do lab grown diamonds cost so much money?

Given that they're not as rare as natural ones, why are lab grown diamonds so expensive? Priya Raj explores the reasons behind the price tag

Lab-grown diamonds accounted for 10 per cent of diamond jewellery sales in 2022, unsurprising when they are (mostly) priced parallel to natural diamonds without the rarity tag attached.

Sceptics of lab diamonds and other synthetic diamond alternatives oppose these innovations with the age-old “it’s not an investment” argument. It’s a fair point in terms of rarity, natural diamonds are rare, and lab diamonds just aren’t. That being said, why are lab diamonds so darn expensive?

What are lab diamonds?

At first glance, lab diamonds look, feel and sparkle the same as—or even better than—natural ones. They can only be differentiated from natural diamonds with the use of special tools, even to the most trained naked eye.

Lab diamonds are made by one of two processes which mimic the conditions of how a natural diamond is created. These are: CVD (chemical vapour disposition) or HPHT (high pressure high temperature). A natural diamond is a piece of carbon which has been subject to high levels of (you guessed it) pressure and temperature, and so the latter process is self-explanatory.

"At first glance, lab diamonds look, feel and sparkle the same as—or even better than—natural ones"

Both processes start the same, with a "diamond seed"—another word for a small particle of carbon. HPHT has been around for decades, whereas CVD is a new technology and accounts for the recent lab diamond boom. CVD involves lower pressures and temperatures than HPHT. Carbon gas is pumped into an incubator where the diamond seed sits. These carbon fragments crystallise and deposit onto the diamond seed—and the lab diamond is born.

How are lab diamonds priced?

Lab diamonds are generally priced at a fraction of natural-mined diamonds, but still are by no means cheap. This is due to lab diamonds not being priced based on rarity (unlike natural diamonds) but rather the four C’s: colour, cut, clarity and carat.

"Lab diamonds are generally priced at a fraction of natural-mined diamonds, but still are by no means cheap"

Given that they are man-made, lab diamonds have been engineered to be, in jeweller lingo, "white and clean". This means they are usually never below a “G” on the colour scale, which refers to how much yellow discolouration is in the stone, with D being the best colour grade.

In regards to clarity, lab diamonds are never lower than a “VVS2”, which is about four points below the best—"flawless". Cut refers to the shape of the diamond, whereas carat references the size, and the bigger you go, the more it’ll cost—whether lab created or mined.

Diamond shopping - why are lab-grown diamonds so expensive

The diamond shopping experience also contributes to the price

The way that fine jewellery and other luxury goods are priced is relatively simple, and though no secret, might be shocking. Every glass of champagne while you browse, every "free gift" and every after-sales service is carefully included in your price.

The same goes for the bonus social-innovation programmes that likely enticed you to make your purchase in the first place! The reason that jewellery brands often have some form of philanthropy under their belts is that the margin between the cost of the jewellery versus the price allows them the luxury to splurge on their CSR (corporate social responsibility) activities.

Corporate social responsibility

Krish Himmatramka, founder at ethical and lab diamond brand Do Amore explained his idea for his "water project" came about before the brand itself. “The decision to sell diamonds to fund the social impact project at Do Amore stems from a deeply personal journey and a desire to make a meaningful difference in the world,” he explained.

Krish was an oil and gas engineer before quitting it all to be an entrepreneur. “What struck me deeply was the stark contrast between the difficulty of drilling for oil and the ease of accessing clean water,” explained Krish. Though revitalised with the idea of creating a non-profit tasked with providing accessible clean water to all, he quickly had to rethink his approach due to the existing players in water philanthropy. “I decided to take a different approach [instead].

"[Thinking] what if I could sell something with high-profit margins and high volume so that every time I sold something, I could make a massive difference without having to charge anyone any extra at all,” says Himmatramka. That’s exactly what he did, and to date, the company has provided over 14,000 people with access to clean water.

"Luxury is finding alternatives for finite materials"

Despite these wins, the luxury market, particularly fine jewellery lovers, hasn’t responded well to the widespread adoption of lab diamonds. Some say it cheapens the industry and takes away the allure and exclusivity of diamonds. This, in some ways, is true, but we need to be asking those few, why is inclusivity a bad thing?

Though, as of now, lab diamonds aren’t technically an investment (they are unlikely to be sold for as much as is paid for them), who knows what the future holds? Luxury is finding alternatives for finite materials, whether this is Hermès adopting a leather made of mushrooms, an electric Ferrari, or the biggest players in the jewellery industry adopting lab diamonds. Change is not only likely, it’s inevitable

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