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How the diamond industry lost its sparkle
The explosion of lab-grown stones from China has shaken up the sector, leaving established players struggling for relevancehttps://archive.is/k9JD2
It takes the Earth more than a billion years to forge a diamond. Feng Canjun can grow one in the space of a week.
On a sweltering summer afternoon in Zhengzhou, capital of the central Chinese province of Henan, Feng’s Jiaruifu diamond factory hums with energy. Inside, 600 machines, each larger than an African elephant, simulate the crushing geological pressure and diabolical heat deep in the Earth’s surface, where diamonds grow.
The machines can turn out three-carat diamonds, the size of a large engagement ring, in just seven days.
“We can mass-produce diamonds,” Feng says, proudly pointing to the rows of machines. He has another two factories working around the clock. “Currently, I produce about 100,000 carats a month,” he adds.
Over 70 per cent of the world’s lab-grown diamonds for jewellery — many destined for the ring fingers of newly engaged couples — originate in a Chinese factory, with Henan at the centre of the synthetic trade. “Essentially, we dominate this industry,” says Feng
For the natural diamond industry, Feng’s factories and others like them have been devastating. The explosion of lab-grown diamonds on the international jewellery market has coincided with a slump in demand, sending the price of smaller natural diamonds to their lowest levels in a decade.
Marty Hurwitz, head of the Grown Diamond Trade Organisation, says lab-grown diamonds have “been a massive disruption. People in the industry at first didn’t believe it and, second, couldn’t accept it.
De Beers, the storied diamond company founded by Cecil Rhodes, has been put up for sale by its owner, London-listed Anglo American. Anglo American values the unit at $4.9bn in its accounts — but falling sales mean it could fetch far less. First-round bids from potential buyers are due next month.
Last year, De Beers’ revenues were just half of what they were in 2022. Other miners such as Alrosa, Rio Tinto and Petra Diamonds have seen similar declines in their diamond businesses.
