Natural or lab-grown? Shine on a divided diamond industry as Taylor Swift’s vintage ring sets trend

3 weeks ago 10

Veteran jeweller Ronnie Bauer says Taylor Swift’s vintage-style engagement ring is classic and will probably start a trend, like Princess Diana’s sapphire sparkler.

“I don’t think we could call it understated,” Bauer, the vice president of the Australian Jewellers Association, said of Swift’s enormous solitaire ring, which features an old mine cushion-cut diamond.

Bauer said it was no surprise Swift had a natural diamond ring rather than a lab-grown one. Natural diamonds were “always” the more glamorous option, he said.

The diamond industry is at an inflection point as laboratory-grown diamonds challenge the dominance of natural ones, particularly among price-sensitive and environmentally conscious young people, according to consultancy McKinsey & Company.

Lab-grown diamonds have the same physical and chemical properties as natural diamonds, yet are much cheaper. They take weeks or months to grow, as opposed to millions and millions of years.

“These are diamonds, they are not imitants,” said Bauer. “The difference is one is mined out of the ground, and one is produced.”

Ronnie Bauer, vice president of the Jewellers Association of Australia.

There are no lab-grown diamonds at Bauer’s antique jewellery business, Klepner’s, in Melbourne’s CBD, which opened in 1889. But Bauer is familiar with the charms of synthetic diamonds – even his daughter wears a lab-grown diamond ring.

“These days the youngsters say, ‘I don’t want to put the money into a diamond, I want to put the money into a house’,” he said.

Perth man Travis Ricciardo follows the diamond market for both professional and personal reasons. When the mining podcaster got engaged, he bought a $5000 lab-grown diamond ring for his partner.

He said his fiancee and female friends mainly preferred lab-grown diamonds, for environmental, social and governance reasons.

Natural diamonds at Ronnie Bauer’s 136-year-old jewellery shop in Melbourne’s CBD.

“There’s a perception that a lab-grown diamond is more ethical; I don’t know if that’s true,” Ricciardo said.

The diamond industry has historically been “lightly or inconsistently” regulated; however there have been calls for tighter regulation and increased transparency, McKinsey said.

The United Nations-backed Kimberley Process aims to eliminate conflict diamonds – such as the rough diamonds used by rebel movements or their allies to finance armed conflicts aimed at undermining legitimate governments.

Ricciardo said the price difference between natural and lab-grown diamonds had narrowed.

Taylor Swift and Travis Kelce are engaged. The singer’s engagement ring features an old mine brilliant-cut diamond.

“I paid about [$5000] for the diamond ring for my fiancee, and it would have been maybe $500 more expensive had I gone for a natural,” he said.

“Because most of the cost was the jewellers’ time and effort, the overheads they had. And then there’s the gold element, the gold price has gone up massively.”

He said lab-grown diamonds would probably increase the size of the overall diamond market by offering a cheaper alternative to people who otherwise couldn’t afford one or spend as much.

Synthetic diamonds have become so popular that the Natural Diamond Council – representing the world’s biggest diamond producers, including one-time monopoly holder De Beers – has vowed to spend 1 per cent of rough diamond revenues to promote natural stones.

Vintage jewellery at Klepner’s Jewellers in Melbourne’s CBD.

The council is also fighting the notion that lab-grown diamonds are greener.

More than 70 per cent of laboratory-grown diamonds are mass-produced in factories in China and India, it said.

“The manufacturing process is energy-intensive requiring sustained temperatures upwards of around 2000 [degrees Fahrenheit, or 1093 degrees Celsius] and large amounts of water to cool reactors.”

So, what is the future of diamonds? Or will the Swift effect ensure demand for years to come?

Exhibitors sell diamonds at a trade fair for synthetic diamonds in China’s Henan province.

A few scenarios could come to pass, McKinsey said in its 2024 report. “First, lab-grown diamonds could take over the majority of the market outside niche luxury segments, similar to collecting classic cars or luxury vintage items,” the company said.

“Second, the price of lab-grown diamonds could drop so low they effectively become fashion accessories that no longer compete with diamonds.

The sapphire and diamond ring worn by the late Princess Diana on her engagement to Prince Charles in 1981.

“Related to this point, assuming consumers cannot tell the difference between natural stones and lab-grown diamonds, all diamonds could simply go out of fashion, lose their appeal, and are no longer seen as a must-have for engagement rings.”

Bauer said the geologist who discovered diamonds in Australia, Ewen Tyler, once made a quip about lab-grown diamonds.

“He said, ‘If you buy a lab-grown diamond, you don’t really love her’,” Bauer said. “It was such a funny moment. It’s not true. But I think it’s old school.”