THE launch of the De Beers synthetic diamond brand Lightbox was a positive development for the diamond industry because it demonstrated there was no store of value in synthetics compared to the naturally occurring product.
This was the view of Eira Thomas, CEO of Lucara Diamonds who in an interview at The Northern Miner’s Canadian Mining Symposium in London in May said synthetic diamonds nonetheless played an important role.
“I’m actually really excited about it,” said Thomas. “I think it was a very positive development for the industry.
It clearly serves to differentiate the two markets. The synthetic diamond market is not the same as the natural diamond market and they can co-exist.”
De Beers launched Lightbox a year ago to a mixed response from analysts. Some said De Beers would effectively strengthen the appeal of natural stones to the consumer, while simultaneously flooding the synthetics market. This might depress pricing for synthetics. Other analysts thought Lightbox might confuse the market.
So far, it looks as if De Beers has pulled off a marketing coup.
“The reality is that a synthetic diamond that you would have purchased maybe five years ago for say, $5,000 would be worth less than U$800 today. So less than a cellphone,” said Thomas. “So there’s no store of value in a synthetic diamond.
“Rather, synthetic diamonds are filling a niche around fashion jewellery and we see it almost as an entry level opportunity for consumers,” she said.
“That’s how we see synthetics and natural diamonds playing together in this market. And because the cost of synthetics has come down so dramatically, those diamonds can never be resold for what they were purchased for. De Beers is clearly standing up and making a statement that this is the case,” said Thomas.
Lucara operates the Karowe diamond mine in Botswana which yielded the Lesedi la Rona diamond, a 1,111 carat stone – the largest found since the Cullinan diamond. It was sold to Graf Diamonds in 2017 for $53m.