Diamond Mines Are Drying Up Globally
Every year in Vegas there is a JCK Jewelry show which is attended by thousands of people from all around the world. Two days before the JCK 2018 show launch on June 1st, De Beers, a company having a monopoly on rough-diamond production for most of the 20th century shocked the industry. They reversed their long-held position and announced that a new subsidiary, Lightbox Jewelry, will begin selling lab-grown diamonds at 50%- 75% lower prices than mined ones. Mined and lab-grown diamonds are chemically identical and distinguishable only by laboratory equipment.
Dried Up Diamond mining pit in the town of Aykhal, Yakutia, Russia
The supply of mined diamonds has been decreasing over the past few years due to high demand. De Beers warned in 2014 that mined-diamond production will begin a permanent decline in 2020 if new mines are not found. Bain Capital, in its diamond-industry report from last year, said that some of the world’s biggest mines are expected to run dry by 2030. Since diamond mining has maybe a total of 30 years left, some experts say, De Beers is looking to position itself as the leader in both mined and lab-grown diamonds
Sales on LightboxJewelry.com begins tomorrow and they are offering one-carat and smaller solitaire studs and pendant necklaces in soft shades of blue, pink and white. The company is not selling engagement rings and will avoid the bridal market, which accounted for 27% of sales in the mined-diamond jewelry market and totaled $22 billion in 2017. While a one-carat mined diamond can cost anywhere from $1,000 (for a low-grade stone) to more than $20,000, an equivalent lab-grown stone from existing producers goes for $1,900 to $6,000. Lightbox’s diamonds sell for $800 per carat—This figure is based on production costs, not mined-diamond prices. Incidentally, lab-grown diamonds have gotten considerably cheaper since the Lightbox announcement at JCK Las Vegas. Zimnisky predicts that the lab-grown diamond market will increase to $15 billion a year by 2035, up from $1.9 billion today.
We are living on the edge of an era where we will witness depletion of a lot of natural resources that have been available to us for millions of years. Depletion of natural resources is a major shifting force in every economy. It will be interesting to see how De Beers manages to shift the mindset of the consumers to buy lab-grown diamonds as it slowly and steadily decreases its production and sales of mined-diamonds. In order to dominate the lab-grown diamond market, they have implemented a cost-differentiation strategy and are planning to beat the current market of lab-grown diamonds. With less than 12 years left for all the diamond mines in the world to dry up completely, a lot of global companies will now be seen riding on this new wave of manufacturing & selling lab-grown diamonds and flourish their businesses nationally & internationally.
