Diamonds, long revered for their brilliance, scintillation and rarity, have experienced a transformative shift in production due to recent technological breakthroughs. While mother nature meticulously crafts natural diamonds within the Earth's mantle over billions of years, cutting-edge laboratories are now able to fabricate lab-grown diamonds by replicating these geological conditions in controlled settings. This innovative approach has led to a surge in the popularity of lab-grown or ‘CVD’ Diamonds. CVD or Chemical Vapour Deposition is the commonly used name for lab-grown diamonds and is named after the process used to produce such diamonds.
Nevertheless, some individuals harbour reservations about embracing these man-made gems, as they deviate from conventional romantic notions. On the other hand, natural diamonds have been the gold standard for centuries, offering a sense of trust and satisfaction to those who choose them. Regardless, it is a fact that lab-grown diamonds remain virtually indistinguishable from their natural counterparts, presenting the world of luxury with a compelling alternative.
In this post, we explore the unique features of CVDs, take a closer look at how CVD diamonds are made, and the supply and demand concerns surrounding them - all to help you make an informed decision about your purchase.
What is a Lab-Grown Diamond?
Lab-grown diamonds, also known as synthetic, man-made, or cultured diamonds, are produced in a laboratory setting. Using advanced technology, these labs can replicate the natural processes that occur in the earth to create rough diamonds from diamond seeds, resulting in a diamond that is chemically and physically identical in its composition to a natural diamond.
Lab Grown Diamonds are produced using 2 different methods:
- High-Pressure High-Temperature (HPHT)
- Chemical Vapor Deposition (CVD).
The HPHT method creates diamonds by mimicking the high pressure and temperature conditions within the Earth’s mantle, where natural diamonds are formed. CVD is a newer method which involves crystallizing carbon-containing gas onto a diamond seed in a vacuum chamber. CVD is a favoured process since it eliminates the need for high pressure, and the temperature requirements do not exceed 1400 °C – as opposed to HPHT, which requires a temperature of over 2000 °C.
Lab-grown diamonds have the same chemical, physical, and optical properties as natural diamonds because they share the same elemental structure and chemical composition. It is impossible to differentiate between CVD diamonds and natural diamonds without specialized equipment like a spectrometer or a microscope, which can detect the differences in the crystal structure. In gemmological laboratories, scientists analyse various factors, such as diamond growth and strain patterns, trace elements, inclusions, and fluorescence, to identify the origin of the diamond. Additionally, all lab-grown diamonds are required to be disclosed as such when sold and must be certified by recognized gemmological institutions such as GIA or IGI.
How are CVDs Created?
The CVD process involves creating diamonds from hydrocarbon gas mixtures. It involves placing a thin slice of a diamond seed in a sealed chamber and subjecting it to high temperatures ranging from 800 °C - 1400 °C. This causes the gas mixture to break down and carbon atoms to accumulate on the diamond seed in a very specific arrangement, eventually forming a diamond crystal. Once the rough stone is processed, it undergoes cutting and polishing and eventually makes its way to a jeweller. In contrast to the natural diamond formation process, which takes billions of years, lab-grown diamonds can be created in a matter of weeks. However, the growth time can vary depending on the colour and size of the diamond. For instance, it may take about one month to grow a 1-carat CVD diamond.
The CVD Dilemma: Weighing the Pros & Cons
CVD diamonds have their own set of advantages and disadvantages that buyers should consider before making a purchase. On the positive side, CVD diamonds are often more affordable than natural diamonds, with recent price differences for certain qualities going down to 10% of an identical natural diamond as per the diamond Rapaport. This is due to their production process that eliminates costly mining expenses and reduces supply chain costs – in addition to the absence of a rarity factor. CVD diamonds are also more environmentally sustainable compared to natural diamonds, as they are grown in a lab setting, which somewhat reduces the environmental impact of mining.
CVD diamonds have their own set of downsides as well. One major issue is their value depreciation over time. Since lab-grown diamonds can be produced in large quantities, there is a lack of a rarity factor - leading to widespread availability. This leads to another consequence – which is that CVDs seldom have any resale value. Sellers are usually not willing to buy-back their lab-grown products, and in the off-chance that they are willing, the buy-back value will almost certainly be lower than the customer’s original purchase price. As such, these stones cannot be considered investment-grade (unlike natural diamonds), and can neither handed down to future generations as family heirlooms. Finally, the socioeconomic impact of CVDs, relative to mined diamonds, is very limited. While natural diamond mining has created employment opportunities at all levels of the supply chain, the production process of CVD diamonds is highly automated and requires very limited skilled labour. This may limit the direct economic impact on local communities.
Demand & Supply Dynamics: CVDs are Depreciating Assets
Lab-grown diamonds are increasing in popularity and this growth is expected to accelerate due to several factors like sustainability concerns, affordability, and advancements in technology. Since CVDs are produced in large quantities without many supply limitations, their value is touted to decrease in the coming years owing to simple principles of demand and supply - consequently impacting their resale value. Natural diamonds, on the contrary, have historically not just held their value, but have gradually appreciated in time due to their rarity and limited supply.
Falling historic prices of LGDs (Lab-Grown Diamonds). Includes proxies for large & small-sized LGDs, as well as an index to proxy the market. (Source: Edahn Golan)
Although CVD diamonds come with a lower price tag, they may not fetch much value at a later date. As this technology continues to evolve, and more players enter the lab-grown market, supply will inevitably increase – potentially without an upper cap. This inherently means that with time, as the market for lab-grown gemstones matures, there will be an inevitable price depreciation for these products. On the other hand, natural diamonds are a better investment as they are scarce and will always remain in limited supply since these are limited in nature and are formed over billions of years. Consequently, natural diamonds tend to hold their value better over time. Despite the increasing popularity of lab-made diamonds, many consumers still value the traditional significance of natural diamonds, ensuring that there is a continued demand for them in the market.
The decision between lab-made and natural diamonds ultimately boils down to your preferences. While lab-made diamonds offer affordability and certain ethical advantages, natural diamonds continue to hold a special place in the hearts of many due to their rarity, history, and timeless appeal. Whether one chooses a natural or a lab-grown diamond, the most important factor is making an informed decision from an ethical retailer – ensuring that your purchase is not just well thought-out, but also satisfies your individual need.
