De Beers enters commercial synthetic diamond market

WINDHOEK De Beers Group yesterday made a U-turn on its stance on synthetic diamonds with the launch of a new company called Lightbox Jewellery through which it will market commercial synthetic diamonds as of September this year. This is in stark contrast to the group's well-known stance on lab grown diamonds, which it has in the past opposed due to consumers being misled and due to the unregulated pricing of the synthetic stones. De Beers has however produced synthetic diamonds for industrial purposes through its Element Six business, which has been a world-leader for more than 50 years in lab-grown diamond technology.

During an exclusive telephonic interview with De Beers' Director for Partnerships, Alessandra Berridge, based in Johannesburg, and the group's Head of Public Affairs David Prager, based in London, New Era learned that the lab-grown diamonds will retail from US$200 for a quarter-carat stone to US$800 for a one-carat stone. This is about 75 percent less than the current market price of similar synthetic stones. To provide some perspective, a natural one-carat diamond can easily fetch a retail price of US$6000.

According to Berridge, De Beers has informed producer nations like Namibia, Botswana and South Africa, of the new development and assured these partners that the entrance into the synthetic diamond market will not affect their operations, be it mining or value addition, in any way. Our core business is and will remain natural diamonds. We remain heavily invested in the natural diamond industry and we see synthetic diamonds as complimentary to our existing business, she said. She added that De Beers has key projects around the world and that the new development will not change the Group's approach to the diamond business. She noted that the global demand for diamonds was about US$82 billion last year and that De Beers aims to satisfy that demand by supplying mostly natural diamonds.

Meanwhile, Prager noted that De Beers has long been opposed to synthetic diamonds being used to mislead customers looking for the real thing and the Group has consistently questioned the pricing of artificial diamonds. We can do better (than our competitors) and we see this as an opportunity to give consumers a great looking product in the colour they want at a favourable price, said Prager. He continued that Lightbox will be managed totally separately from the De Beers business and that the group remains committed not to feature its name anywhere on the Lightbox products so as not to confuse the consumer.

Lightbox will transform the lab-grown diamond sector by offering consumers a lab-grown product they have told us they want but are not getting: affordable fashion jewellery that may not be forever, but is perfect for right now, said Bruce Cleaver, CEO of De Beers Group, in a media statement. Our extensive research tells us this is how consumers regard lab-grown diamonds, as a fun, pretty product that should not cost that much, so we see an opportunity here that has been missed by lab-grown diamond producers. Lab-grown diamonds are a product of technology, and as we have seen with synthetic sapphires, rubies and emeralds, as the technology advances, products become more affordable. After decades of R&D investment, we are able to offer consumers a better price today. While it will be a small business compared with our core diamond business, we think the Lightbox brand will resonate with consumers and provide a new, complementary commercial opportunity for De Beers Group.

We have learned from our research that there is a lot of confusion about lab-grown diamonds � what they are, how they differ from diamonds, and how they are valued. Lightbox will be clear with consumers about what lab-grown diamonds are and will offer straightforward pricing that is consistent with the true cost of production, added Steve Coe, General Manager, Lightbox Jewellery.

We will introduce more designs and colours as the range evolves, and the technological efficiency of our proprietary production process means we will always offer Lightbox at accessible prices, Coe explained.

A subsidiary of De Beers, Lightbox will be the only jewellery brand to source lab-grown diamonds from De Beers Group's Element Six business. Any Lightbox lab-grown diamonds of 0.2 carats or above will carry a permanent Lightbox logo inside the stone. Invisible to the naked eye but easily identified under magnification, the logo will clearly identify the stone as lab-grown and serve as a mark of quality and assurance that it was produced by Element Six.

To support Lightbox, the Beers Group is investing a total of US$94 million over four years in a new Element Six production facility near Portland, Oregon, adding to Element Six's existing UK-based facilities. Once fully operational, the plant will be capable of producing upwards of 500 000 rough carats of lab-grown diamonds a year.

Source: New Era Newspaper Namibia