The diamond mining industry has joined forces with China’s largest jeweller to help it promote natural stones, as concerns rise about the threat from lab-grown diamonds.
Hong Kong-listed Chow Tai Fook, which has more than 4,452 stores in mainland China, said it had signed a “strategic partnership” with the industry lobby group the Natural Diamond Council to promote mined diamonds in China.
“The partnership aims to convey the value of natural diamonds to Chinese consumers and enhance their confidence and desire for natural diamonds,” Chow Tai Fook said. It added that the council was aiming to “fully reveal the core values and emotional significance of natural diamonds underlined by their preciousness, rarity, and uniqueness”.
The move is part of a growing marketing push by the diamond mining industry to counteract rising sales of lab-grown stones, which are chemically identical to mined diamonds.
Danish jeweller Pandora said this month it would only sell lab-grown diamonds, a move that was condemned by the NDC and four other industry groups.
The NDC counts among its members the world’s largest miners including De Beers, Alrosa and Rio Tinto. It was launched last year as a rebrand of the Diamond Producers Association.
De Beers suffered its worst year of diamond sales in almost a decade in 2020 as the coronavirus pandemic led to a collapse in demand.
Both the lab-grown and mined industry are looking to capture consumers as the global economic recovery sparks a rebound in luxury demand. In the first quarter of this year, Chow Tai Fook reported its same-store sales in mainland China had risen 141 per cent from a year earlier.
There are two main methods of producing lab-grown diamonds: mimicking their natural formation using high pressure and extreme heat, or via a process known as chemical vapour deposition in which a single-crystal diamond “seed” grows through contact with a carbon-containing gas.
Production of lab-grown diamonds rose from about 2m carats in 2018 to 6m-7m carats last year, according to consultancy Bain. The supply of mined diamonds has fallen from 152m carats in 2017 to 111m carats last year.
More than half of lab-grown diamonds are made in China, according to Bain. China is the world’s largest market for diamond jewellery after the US.
The NDC has been stepping up its pushback against lab-grown diamonds. It complained this year to the US National Advertising Division about the marketing of Silicon Valley lab-grown producer Diamond Foundry.
In response, the NAD recommended Diamond Foundry modify its advertising by “clearly and conspicuously disclosing the origin” of its diamonds.
But the body last month also rebuked the NDC, saying it should “discontinue certain advertising claims comparing mined diamonds with man-made diamonds” — including that mined diamonds had lower carbon emissions.
Diamond Foundry, whose backers include Hollywood star Leonardo DiCaprio, last month chalked up a $1.8bn valuation after a $200m investment by Fidelity.