Timeless radiance of natural diamonds makes for sound investment

Over the past eight years, the diamond landscape has witnessed significant shifts. Laboratory-grown diamond (LGD) prices have witnessed a dramatic nosedive, jeopardising their long-term investment potential. When laboratory-grown diamonds first appeared in commercial quantities, they were viewed as a slightly more affordable alternative to natural diamonds.

In 2016, a one-carat synthetic diamond was priced roughly 10% lower than its natural counterpart. However, by the close of 2022, the price differential had dramatically expanded to as much as 80%, depending on the manufacturer.

The growing price divide is further undermined by the largely unsubstantiated sustainability claims of lab-grown diamonds. The manufacturing process for these diamonds, which spans just a few weeks, is alarmingly energy-intensive, requiring temperatures akin to 20% of the sun’s surface.

The process, especially in the case of a principle technique used in India for creating lab-grown diamonds known as Chemical Vapour Deposition (CVD), is significantly energy-consuming, largely due to the use of plasma microwaves, which demand substantial power. Additionally, over 60% of the world’s lab-grown diamonds are mass-produced in China and India where 63% and 74% of grid electricity is generated from coal, raising questions about the ‘eco-friendly’ claims by most manufacturers.

Analyst Paul Zimnisky and a three decade-long study by Bain and Company reveal an illuminating trend - the costs of lab-grown diamonds have plummeted by over 74% in the past six years, while natural diamond prices, though fluctuating at times, have over the long term exhibited a consistent annual increase of three per cent.

The enduring investment value and sustainability of natural diamonds has been reaffirmed by NDC’s ‘Diamond Facts’ report. This comprehensive report dispels misconceptions surrounding the diamond industry, and at the same time, showcases how natural diamonds have stood the test of time, offering a profound, valuable, and ethically responsible choice for consumers.

Richa Singh, Managing Director, NDC India and Middle East, emphasises the need to educate consumers about the true sustainability and financial aspects of their diamond choices.

She states, “Amidst the shifting dynamics, one thing remains crystal clear: natural diamonds possess an enduring value and timeless elegance that make them the right choice for the conscious and investment-minded consumer. Their inherent rarity, sparkling beauty and emotional significance mean that they are the only luxury products that can be worn every day and enjoyed, and yet appreciate in value over time.”