Is it okay to propose to your sweetheart with a diamond that was made in some drab office park?

See Forget the ring: Lab-grown diamonds are a scientist’s best friend by Sarah Kaplan of The Washington Post. It provides not just some of the economics of the industry but also some insights on the techniques of the process and the scientific uses of these lab created diamonds.

One of my classes this week read a chapter about cartels in the book The Economics of Public Issues. It included a short discussion about De Beers and what has happened to their monopoly power in the diamond market. It declined over time as more countries started mining diamonds (they once had a 90% market share and it is now 31%). They also faced anti-trust issues for the ways they tried to control the market (see additional link at the end).

But now lab-grown diamonds are starting to have an impact as well. Here are excerpts from the The Washington Post article:

"At a drab office park in a Washington suburb, in an unmarked building's windowless lab, Yarden Tsach is growing diamonds.

Not rhinestones or cubic zirconia. Diamonds. Real ones. In a matter of eight weeks, inside a gas-filled chamber, he replicates a process that usually takes billions of years in the bowels of the planet. Carbon atom by carbon atom, he creates nature's hardest, most brilliant and — if decades of advertisements are to be believed — most romantic stone."

"Until the middle of the past century, all of the world's diamonds originated more than 1 billion years ago in the Earth's hot, dark interior. Tremendous temperatures and pressures forced the carbon atoms there to link up in a flawless, three-dimensional lattice that would prove incredibly strong and equally effective at bending and bouncing light. The result was a crystal — a gem in the rough that, once cut and polished, would dazzle with unmatched radiance.

Yet getting those stones up to the surface has required an enormous — and sometimes bloody — effort. The environmental impact of diamond mines is so sprawling that it can be seen from space. The humanitarian cost of some gems is also staggering: children forced to work in mines, “blood diamonds” sold to finance wars. The Kimberley Process, which certifies diamonds as “conflict free,” was established in 2003 to stem the flow of these stones into the global market."

"Traditional diamond producers say only a small fraction of diamonds are suspect these days because of steps they've taken to ensure that mines are socially and environmentally responsible. They push back against the appeal of lab-grown stones, suggesting the man-made versions aren't on par with those dug out of the ground. The most recent ad campaign from the Diamond Producers Association, which features hipster couples frolicking amid gorgeous nature scenes, is called “Real is Rare.”

Their argument is unspoken but clear: No one should propose to a sweetheart with a gem that was made in some drab office park."

"Scientists have been creating diamonds since the 1950s, mimicking the conditions deep within the Earth by heating carbon to extreme temperatures while squeezing it in a hydraulic press. But it took them several decades more to cultivate large gem-quality stones. These were still not as large or as clear as the best traditional diamonds, and most were colored yellow or brown from the nitrogen required to stabilize the growing process. Still, the traditional diamond companies were on edge.
“Unless they can be detected,” a Belgian diamond dealer told Wired in 2003, “these stones will bankrupt the industry.”

Today, nearly a dozen companies worldwide produce diamonds that are all but indistinguishable from mined stones"

"Sales of lab-grown stones make up about 1 percent of the global commercial diamond market, but a 2016 report from investment firm Morgan Stanley suggested that proportion could jump to 7.5 percent by the end of the decade. In one unlikely scenario, analysts said, lab diamonds might become so ubiquitous that the entire traditional market collapses.

After all, that market depends on sentiment and scarcity. The combination is what made De Beers's famous “a diamond is forever” campaign so potent. It turned diamonds into the ultimate symbol of eternal love, stones that were to be treasured and never — perish the thought — resold. The genius strategy has helped to ensure diamond companies control supply.

But lab-grown jewels shatter the illusion. They can be made on demand, in a matter of weeks, and they cost an estimated 10 percent to 40 percent less than a gem that comes out of the ground. Technology being what it is, it's likely they'll get even cheaper."

Here is the additional link:

De Beers – Rulers of the Diamond Industry:The Rise and Fall of a Monopoly by William Yu of The University of California at Berkeley