The bi-annual Dubai Diamond Conference, which took place on 11 November at the JAFZA One Convention Centre in Dubai, United Arab Emirates, addressed several issues impacting the diamond industry.
Two seemingly contradicting issues stood out for me.
The first one, which was championed by the Dubai Multi Commodities Centre (DMCC) executive chairperson and chief executive Ahmed Bin Sulayem, was the need to embrace lab-grown diamonds, while the second matter was a push to raise $100 million to help the Natural Diamond Council (NDC) to market natural stones.
I call this contradictory because advocates for the generic marketing of natural diamonds are, to some extent, concerned about the threat of synthetic diamonds, while at the same time, the DMCC boss wants the industry to embrace lab-grown stones instead of shunning them.
Bin Sulayem said that while lab-grown diamonds are banned, especially in Africa, he does not see them as a danger to natural stones.
“While we compete, there is a need to cooperate; competing is not about pitting natural diamonds against lab-grown diamonds... this is about being positive about the product, driving fulfilling narratives and growing overall demand,” he said.
“Other industries have faced similar challenges and today it is our chance to learn and adapt. Firstly, I don’t see it (lab-grown diamonds) as a threat, I see it as an opportunity for the diamond cutters to continue [creating] employment.
“Look at India, I know it's shunned in Africa but the time will come when lab-grown diamonds will be part of buying a gift that convinces someone to get married.”
While the DMCC head saw this business opportunity, one delegate from Africa who spoke to me on condition of anonymity, was not happy about this saying how could he say that at a conference dominated by delegates from the natural diamond industry.
The delegate said diamonds are a source of foreign currency in most African countries and they will not wait and watch while synthetic diamonds dig into the market share of natural stones.
McKinsey & Company cited a report by the Knot, a global marketplace for wedding vendors, which noted that 46% of engagement stones in 2023 were synthetic diamonds, compared with 12% in 2019.
The report further states that lab-grown diamonds are considered environmental, social, and governance (ESG)--friendly alternatives to natural stones.
With the option to purchase large stones for low prices, LGDs could be increasingly attractive for younger buyers in Western countries, while buyers in China lean toward natural stones, reads the report.
Promoting natural stones
It was not surprising at all that some delegates sought to push back the idea of making peace with lab-grown diamonds.
At the last session of the conference heard that the natural diamond industry needs a budget of $100 million for category marketing.
The aim is to raise $65 million per year for the NDC apart from its current budget of $35 million, which will lift the annual budget to $100 million it had before Alrosa’s exit in February 2022.
NDC is currently receiving funding from De Beers, other mining companies and a few trade partners.
The conference saw DMCC, Antwerp World Diamond Council (AWDC) and India’s Gem & Jewellery Export Promotion Council (GJEPC) promising to consider funding campaigns of the NDC to promote natural diamonds.
DMCC’s desire to fund NDC to promote natural diamonds might appear a contradiction since Dubai was a leading distributor of lab-grown diamonds.
However, the centre can argue that there is no contradiction rather they are just good at identifying business opportunities.
Bin Sulayem said lab-grown diamonds were not only being used for jewellery but were also being consumed for the technology industry.
“It is the number one semi-conductor material and from what I know, the natural diamond industry does not want to compete with the technology industry,” he said.
“You can use it to support natural diamonds... you can play with it, and it hasn’t been explored yet properly.”
De Beers’ Element Six recently announced a partnership with Lightsynq, a new quantum interconnect start-up founded by Harvard PhDs and former research leads at the AWS Centre for Quantum Networking.
Lightsynq is building faster and more robust solutions to scale quantum computing, unlocking several factors of computational capabilities in sectors such as chemistry and cybersecurity.
The diamond miner said Element Six’s engineered synthetic diamonds will enable the solutions to create complex quantum connections.
It said as synthetic diamond paves the way towards novel applications for advanced technologies in high-value markets, Element Six will continue to focus on commercialising synthetic diamond-enabled technology solutions, working in partnership with its global network of partners.
The reality is that one cannot wish the lab-grown diamonds away as they are here to stay.
Perhaps the approach taken by DMCC to embrace both natural and lab-grown diamonds is viable.
McKinsey & Company observed that both natural-diamond and lab-grown diamond industry participants have the chance to benefit from consumer demand if they can play into their differentiating factors, whether rarity, price, or volume.
“As customer behaviour and preferences continue to evolve, strategies addressing upstream levers will likely be critical to build necessary digital infrastructure, implement traceability standards, and align brand values with customers’ changing needs,” reads the report.
“These strategies will also need to consider the growing market share and dropping prices of lab-grown diamonds, which have emerged as a strong competitor to natural diamonds, and the supply volatility and increasing regulation of the diamond industry.”
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
