Millennials, Don’t Follow the Trend of Buying Lab-Created Diamonds

Lab-created diamonds are super trendy, as they are conflict-free and don’t support warlords, undemocratic systems, cartels, and smugglers. In a word, a lab-created diamond is THE perfect alternative product for conscious millennials. Generation Y strives to make the world better, safer, healthier, and fairer, which leads to some really great trends and awesome ideas. But once you take a closer look, you’ll see that lab-created diamonds are not that great. Although they are popular and the idea of buying blood-free diamonds is really good, this trend is negatively impacting the lives of hundreds of thousands of people all over the world. Knowing and understanding that is of great importance, as voices from those countries are hard to hear in the US. Those people demand that we not stop buying their naturally mined diamonds. But these voices are going unheard.

The Industry’s Role in This Trend

Like most trends, the trend of buying synthetic diamonds began somewhere between San Francisco and Los Angeles, where financially strong consumers worried about the impact of buying diamonds in countries dominated by violence and oppression. Voilà, a solution was found in creating diamonds in a lab, and the fact that tons of money could be made with them was an even greater discovery. Inspired by the added bonus of being able to make piles of money, start-up companies began their work. Big campaigns were rolled out, educating people about the benefits of buying lab-created stones instead of natural diamonds. Great trends require a lot of marketing, and since it’s never been so easy to reach and influence people, so-called influencers got to work spreading the message through social media, blogs, and fair-trade fairs. The smell of easy money was so strong that it overpowered the need to look more closely into the topic and discover any possible adverse effects. It sounds easy: putting an end to buying natural diamonds from unknown sources will stop all the crime and oppression and make the world better. Voices saying otherwise were just ignored. Lab diamonds are great. Period.

This is what the industry wants people believe. And if it were so easy to solve the world’s problems, we’d say go for it. Unfortunately, it’s not that simple. Stories from all over the world prove that this trend is going in the wrong direction, but they are not shared and promoted with big money, as they would ruin business for start-up companies that run big campaigns for lab diamonds. No dirt needs to be moved, no shafts need to be blasted, and the production of lab-created diamonds doesn’t need an ingenious infrastructure and facilities as big as small towns. Margins are tremendously high, and the whole process can be done anywhere in the US or in tax-privileged countries. It is the BIG money made from lab-created diamonds that makes us believe that those stones need to be bought while critical-thinking parts of our mind get tricked by the power of marketing.

The demand is so high that even De Beers, which is the world’s largest diamond trader, just recently announced it would become part of this trend by launching its so-called LIGHTBOX diamond program. The pressure on the industry is so strong that one big company after the other is following this trend, although the idea behind lab-created diamonds has never been part of their company philosophy.

Voices Demanding That People Keep Buying Natural Diamonds Are Overpowered

Tamay Rostan, a highly respected industry insider and expert from redollar.com, refers to a touching story from Sierra Leone, where a pastor and his mining crew discovered a massive diamond. The unearthed stone was one of the biggest stones ever found.

Emmanuel Momoh, a pastor from Sierra Leone, is running a small-scale diamond-mining operation with the concept of sharing profits with all involved miners. The discovery of the enormous 706-carat rock has changed the life of a whole small town, although the operation was under the radar of the government and not licensed by the local mining department. Technically, the operation was illegal, which was the reason why the pastor and his mining team got only a 40% cut of the proceeds, as the remaining 60% were considered public property. Despite knowing that the operation was not permitted, the pastor handed the diamond over to the government. The diamond underwent grading and was finally auctioned in New York, getting the pastor and his miners a whopping 39-million-dollar check. The money was shared between all miners, with higher stakes for the miner who unearthed the rock and the pastor.

Most of the money was reinvested in the small town for building up infrastructure and put into a community development fund. The money received made it possible for some young miners to attend school and upgrade the living standards of their whole families. In a statement, Pastor Momoh asks diamond buyers not to stop buying naturally mined diamonds, as miners from all over the world depend on purchases from the United States, Europe, and Asia. He was quoted as saying, “If people stop buying our diamonds, our communities are going to face strong poverty and rising crime rates.”

Not Buying Natural Diamonds Results in Poverty & Crime

Voices demanding that people continue buying natural diamonds from countries where people are treated unequally are overpowered by the belief that we consumers from faraway countries know what’s best for them better than they do. People like Emmanuel Momoh are not naïve and know full well that some money will flow into activities that support crime, but some of the money will also support local miners, their families, infrastructure, and medical care. The money will help get youth back in school and out of poverty and crime. Nonetheless, consumers from the West won’t like to hear that some money going into criminal channels is better than no money at all going to the communities.

Diamond experts from all over the world demand stronger regulations, and international pressure on certain countries makes diamond mining on a small scale at least legal to fight smugglers and cartels, as they usually provide the infrastructure for selling the unearthed diamonds. International voices are also asking governments to put sanctions in place if human rights are not being respected and people are getting persecuted.

Conscious millennials and their ideals bring great enrichment to our society. Their demand for making our world better needs to be supported as well as possible, but we should not forget that the lives of people living thousands of miles away from our jewelers’ showcases are much different than ours. They live by different rules, and none of us can imagine how it really feels to starve or drink water of poor quality. What would you want if you were in those local miners’ position? Would you ask the West to stop buying your mined diamonds to make the world better, or would you beg for them to keep on buying your stones?

Diamond Prices Affected By the Lab Trend

Most experts are certain that lab-created diamonds will impact prices of natural stones in the long run if the trend is not going to stop. While large natural diamonds will gain in value, smaller natural diamonds will face a price drop. Most diamonds mined in small claim operations are small, which means that the remaining mines will get paid even less compared to what they have been paid in previous years. Thus, the shrinking demand for natural diamonds will not only lead to lower prices, but it will also reduce the possibilities to sell very small diamonds at all.

This trend will also help diamond investors make huge profits over the next decades, as some people and investment enterprises specialize in buying really big diamonds. Those operations are likely to become very successful, as reduced mining efforts will reduce the supply of natural big stones. Very wealthy people will continue to buy only natural diamonds, as they know about their substantial value and a lab-created stone is absolutely no alternative for them.

Divorces & Financial Troubles

While the wealthy are buying more jewelry than ever before, the middle class has bought less jewelry over the last two decades. Only engagement rings are unaffected by the drop in jewelry sales, as people will always keep buying a beautiful diamond ring for the woman they love. But the trend of buying lab-created diamonds has changed the buying behavior of millennials. More and more people tend to choose a synthetic stone over a naturally mined gem with no awareness of what it will mean when it comes time to estimate the “asset” they’ve bought. The desire to buy a BIG diamond is greater than the consideration of buying a real asset. A couple with a $5,000 budget can either buy a natural 1- to 2-carat diamond or a 4- to 5-carat diamond created in a lab. And since size matters, some decide to go for that BIG stone, ensuring envious glances from family, friends, and coworkers.

Millennials, Don't Follow the Trend of Buying Lab-Created Diamonds 1GIA diamond report

Not everyone takes into account that good times can quickly change to bad times when money is needed for medical treatments or avoiding a foreclosure, which is why synthetic stones are hot sellers; people don’t consider that putting a lab-created diamond ring on the market means facing tremendous disappointment. A lab-created engagement ring has almost no value, and a $5,000 investment can result in selling an engagement ring for the scrap-gold value to a gold-buying operation or giving it away on eBay for very little money. This is a serious concern and not just a hypothetical; smart buyers should consider that before buying a ring with a lab-created diamond. By choosing a naturally mined diamond, you help yourself and, even more importantly, continue helping miners all over the world making at least a more or less dignified living. Think about that next time you visit your jeweler and are deciding between buying a naturally mined diamond and a lab-created diamond.

Melissa Thompson writes about a wide range of topics, revealing interesting things we didn’t know before. She is a freelance USA Today producer, and a Technorati contributor.