Al Cook, CEO of leading diamond producer De Beers, has called on diamond-producing countries to bolster the marketing of natural diamonds as lab-grown diamonds squeeze market share.
Speaking during the Investing in African Mining Indaba in Cape Town this week, Cook described synthetic diamonds as being grown in a “microwave in China” as opposed to natural diamonds produced from the earth’s crust.
He said selling synthetic lab-grown diamonds was similar to selling posters of the Mona Lisa at the same price as the real Mona Lisa. “What we have at the moment is a really interesting situation, where the price of lab-grown diamonds has slumped. Why has it slumped? It is slumped because the production of lab-grown diamonds is unlimited. In three weeks in a microwave in China, you can produce a lab-grown diamond,” he said.
“The price of lab-grown diamonds has tumbled to the extent that you can buy 20 (of them) for the price of one natural diamond because people still understand that the production of natural diamonds is extremely rare.”
Cook said the industry needed to tell the story of the difference between natural and synthetic diamonds, and how the former uplifts countries that mine the stones. “The difference between a natural diamond created over a billion years, bringing tremendous good to countries like Botswana and Angola, comes at an extraordinary cost, with extraordinary delicacy brought out of the ground.”
He said ethical diamond producers such as Namibia, Botswana, and Angola needed to work together to more effectively market diamonds, especially to the younger generation.
“I think particularly Generation Z has a growing desire for authenticity. They have had enough of the synthetics; they want the real thing. This is a great time to deliver the real thing. For the first time in human history, we can tell them where the diamonds are from.”
The price of diamonds has fallen on a combination of factors, including geopolitical risk, the increase in lab-grown diamonds, consumers under financial pressure, and calls for more ethically sourced stones.
Miguel Vemba, director for mining operations at Angola’s state-owned mining company Endiama, said the industry was no longer aggressively marketing natural diamonds — saying De Beers’ “diamonds are forever” campaign, for example, was no longer being marketed. “We stopped creating the demand, we oversupplied the market in an uncoordinated fashion. This is the end result of what we got. It is the same as the frog in a boiling pan, this is the outcome of our actions, but we can course correct,” he said.
Botswana's minister of minerals Bogolo Kenewendo concurred the diamond industry had lost its edge when it came to marketing.
At the Invest In African Mining Indaba, her government and De Beers, which have enjoyed a 50-year production and sales agreement, said this week they had concluded a new deal after five years of talks. “The Botswana story is so good, particularly for the younger generation that is worried and concerned about the environment and societal impacts, that is concerned about governments.
“I was born in a government hospital that was financed by diamonds, went to a government school financed by diamonds, and went to university in Botswana, in the US, and in the UK that was all financed by revenue generated through diamonds. While it is a luxurious product, it is life to many in Botswana.”
Kenewendo said the industry needed to adapt to new conditions. “The industry is going through changes; we have to adapt in order to survive; have to figure out how to navigate these changes that are happening, particularly the rise of synthetics.”
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