UNLESS YOU ARE A STUDENT OF RUSSIAN history and landscape, chances are you are not very knowledgeable about the Sakha Republic. But there is one aspect of this federal Russian republic located in the Siberian region you may be familiar with—diamond mining. Sakha is home to the Mir mine, an open pit diamond mine that at 525 metres deep, enjoys the dubious distinction of being one of the largest excavated holes in the world. So big is the mouth of the mine that the airspace above it is restricted as it is feared that the downward air flow can suck in helicopters.
History cautions us about true beauty—that it almost always comes at a great cost. Aerial shots of the Mir mine that seek to convey the depth of the excavation, but only manage to hint at its devastation, even as the town of Minry perches precariously at its edges, indicate the true cost mankind is paying for one of its most precious stones—the diamond.
Manish Jivani of the Surat-based Anand International brings up Mir mine in a conversation with Open. He is making a point about the environmental impact of diamond mining, and this is the first example he cites. Jivani is no crusader. He is an integral part of the diamond trade that operates out of Surat, India’s hub for diamond polishing and processing. Three years ago, he diversified into laboratory-grown diamonds (LGD)—he still works with natural diamonds—and since then he has tried to educate himself about the problematic origins of diamonds. “The need of the hour is to come up with environment-friendly solutions, even for diamonds.” His workshop in Surat uses Compressed Vapour Deposition (CVD) technology to create lab-grown diamonds.
Seven million carats of lab-grown diamonds were produced in 2020 worldwide. 1.5 million carats of these were made in India, already the nerve centre for the international diamond business. Legend has it that 14 out of 15 of the world’s diamonds come to India, be it for cutting or polishing. The country is now looking to establish itself as a leading player in the LGD business. Polished LGD exports, according to the Gem & Jewellery Export Promotion Council, stood at $558.71 million from April 2020 to January 2021, a growth of 57 per cent over the previous year. The bulk of LGDs produced by Jivani are exported, but he says there is a distinct uptick in interest as well as demand inside India now.
You know the old joke about how a diamond is just a lump of coal that did well under pressure? The truth is diamonds are not formed from coal. Diamonds are created when carbon atoms, deep within the earth, are subjected to a lot of pressure from the weight of rocks and high temperature. All these chemical reactions took place billions of years ago; indeed, diamonds are believed to be older than dinosaurs. The diamonds that are mined today are the ones that have been brought to the surface by deep volcanic eruptions that took place when the earth was considerably hotter than it is today. It is a whimsical process, one that takes place in fits and bursts, involves alchemy of a kind beyond human comprehension. And now we are told it can simply be recreated in a lab?
LGDs are not a new phenomenon. They have been around since the 1950s when General Electric created the first batch. They have been used in industrial processes since the 1970s. However, rapid advancements in technology, particularly the CVD, which has been improved upon over the last couple of years, have meant that better quality diamonds can now be created in a lab, but at a cheaper rate. Under the CVD method, a “seed”—slither of a diamond—is placed in a sealed chamber filled with carbon gas and subjected to extremely high temperatures. It can take up to a couple of weeks for a diamond to be “formed” under this method. The Antwerp World Diamond Centre had commissioned a report on the global diamond industry in 2018, which reported that the cost of producing a single carat of LGD is between $300-500 as opposed to $4,000 a decade ago. A CVD produced diamond is usually classified as Type IIa (2a), considered to be the purest category of diamond.
As more and more lab-grown diamonds are produced, the price tag, industry observers predict, will fall. Lab-grown diamonds are here to stay, but in the fashion jewellery category
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“Chemically, physically, optically, a lab-grown diamond is a real diamond. The naked eye cannot differentiate between the two. And more and more consumers are making an informed choice about purchasing one,” says Parag Agrawal, co-founder and CEO, Fiona Diamonds. Fiona started in 2004 when Agrawal was looking at business opportunities in the diamond industry. They started out with moissanite, often referred to as a diamond simulant. The label introduced lab-grown diamonds in 2010, importing the stones from outside. “There was little awareness, but over the years, there has been a sea change,” Agrawal says. The key to turning over jewellery consumers in India, says Agrawal, is to assure them that the product they are buying has a lifetime of value. “We offered buyback from day one. And that went a long way in reassuring the customer that they are putting their money into something worthwhile.” For here is the clincher: lab-grown diamonds don’t exactly come cheap. Yes, the price difference between an LGD and a natural one is anywhere between 10 to 30 per cent, but even then, it is still a substantial amount. “This is not a stone that caters to people who can’t afford diamonds. A natural 2-carat solitaire may cost around ₹ 15 lakh, but an LGD will also come with a price tag of ₹ 5 lakh. Consumers make a choice for the latter because they feel they get more in terms of value, and second, they are making a greener choice,” he explains.
LGD-LED BRANDS IDENTIFY their customer as a young, upwardly mobile person with an ethical sense of style. It is not very different from how traditional jewellery brands look at the same segment. Both agree that the consumer now shops for jewellery as a lifestyle component rather than just to mark a momentous occasion. More women now buy jewellery for themselves, whether to mark a promotion or just as a treat, as opposed to being gifted pieces. “People celebrate moments now. There is more jewellery being purchased now than it was till even a few years ago, but it is meant for themselves and not to be seen simply as an heirloom,” says Richa Singh, managing director, Natural Diamond Council. A consumer today wears an expensive stone casually, says Singh, because she’s also carrying a bag of the same value. “The pedestal that we placed fine jewellery on, it’s not there.” But she also cautions that this is not to be confused with a desire to replace what is authentic and natural. “The triggers for purchasing jewellery have been replaced, but there is always some emotional value attached to what people purchase.”
The modern diamond market has been completely shaped by one company: De Beers. In India, however, our association with the stone goes back centuries. It was one of the first homes of the stone and some of the world’s most magnificent diamonds in existence were mined here. Culturally, gold is still our first love, but the relationship with precious gems has been equally enduring. But the emphasis has now shifted from over-the-top to utility. And the purchase of jewellery, just like everything else, is backed with intense research.
“Minimalist designs with a repeat value are what the customer wants. My clientele are people who know what they want,” says Vandana M Jagwani who started Vandals, an LGD-driven brand in 2020. Jagwani comes from a traditional jewellery family, and her decision to get into lab-grown stones was even more intriguing. “A lab-grown diamond is a real diamond, it is not a simulant. I realised that it wasn’t getting an entry into the market, people did not want to sell LGDs. But I wanted to bring value to the consumer; you can delay something but you can’t deny it,” she says. Of course, the price point is something people enjoy, she says, but “we have to remember, it is still a diamond.” The real challenge for LGDs, according to her, remains educating the customer for a wider reach. “But we also need some level of co-ordination between different brands so that the market doesn’t get spoilt. We do our own branding, but I also believe that we need to hold hands and not compete.”
The proponents of LGD frown at the suggestion that theirs is a more “affordable” diamond. But according to Shalabh Goyal, managing director, Balaji Gems and Jewels, equating LGDs with luxury is also a bit of a stretch. “People say you can’t differentiate between LGDs and natural diamonds. But then, you can’t even tell a cubic zirconia apart from a diamond most of the time. Does it mean people will buy that?” According to Shalabh, jewellery and gems work around the principle of luxury. In the case of diamonds, while the stone is not rare, its supply has been controlled for decades now and a narrative has been built around its exclusive nature. “The whole idea behind a piece of jewellery is how it makes you feel. And no LGD is going to give you the confidence that a natural gem will. What comes out of the earth is a miracle of nature. A lab experiment, no matter how perfect, is never going to match up to that.”
IN A REPORT RELEASED in October, Paul Zimnisky, one of the world’s leading diamond industry analysts, estimated the size of the LGD market to be almost $2 billion. “The figure is estimated to grow to almost $4 billion by 2025,” the report states. But here is the twist in the tale: as more and more lab-grown diamonds are produced, the price tag, industry observers predict, will fall. Lab-grown diamonds are here to stay, but in the fashion jewellery category.
“In 1992 when the moissanite came in, people said it was the end of the road for diamonds. Then cubic zirconia became the rage in the late ’90s, and again the death knell was sounded for diamonds. Similarly, there was a time when the silk sari coming out of Surat was seen as the death knell for silk saris, but both silk and diamond have continued to thrive. Gems and jewellery will hold their value. Eventually, clear definitions emerge as do clear market categories, and we believe everyone will find their space,” says Sachin Jain, managing director, De Beers India. The diamond market in India, he says, is on the brink of “exploding.” “Till even a few years ago, the purchase of diamond was a slightly mystical experience, but there has been a change in consumption patterns. Now, it is an everyday jewel.” But the growth that Jain predicts, he specifies, is only for the “natural” market.
Stung by the criticism around blood diamonds in the first half of the 21st century, the diamond industry has been trying to clarify the chain of supply of diamonds for its consumers. In India, too, blood diamonds and mining excesses are concerns of a consumer when she sets out to buy a stone. “When you buy a forever mark diamond, it comes with a unique inscription at the heart of it which identifies the mine it has come from, its evaluation, etcetera. For the Indian consumer, buyback remains the most integral of considerations when it comes to jewellery purchase. Even when it is an impulse buy, jewellery for Indians is an asset.” And even though LGD brands offer buyback value, lab-grown diamonds are still not considered the real deal by the larger market as such, and this has the potential to make prospective customers wary.
But even as big jewellery brands eye the new entrant warily, they are aware that the consumer is rapidly evolving and is of a fickle nature. So, De Beers launched Light Box a few years ago, a brand that works with only lab-grown diamonds. In Surat, there has been a distinct uptick in the number of traders involved in LGD production, but most remain reluctant to talk. Interview requests by Open to different manufacturers went unacknowledged. Jivani says that’s because it’s still early days. “India has managed to establish itself in the field, now we need to go all out. We have the potential to beat China, our closest competitor. The pandemic has heightened the consumer’s desire to shop more meaningfully. LGDs fulfil that demand.”