Lab vs. Natural Diamonds: Which is the Better Choice?

The price disparity between lab-grown and natural diamonds has continued to widen. As technology and manufacturing techniques for lab-grown diamonds have advanced, the cost of producing them has decreased significantly. Meanwhile, the prices of natural diamonds have increased by an average of 4.3% per year since the 1960s.

Reselling either type of diamond—natural or lab-grown—at the original purchase price is difficult. Lab-grown diamonds, in particular, are not ideal for those prioritizing long-term value retention, as natural diamonds tend to hold their value better. However, lab-grown diamonds are an excellent choice for those looking to save money upfront.

Example of Price Differences:

• 1.01 Carat Round Cut Natural Diamond: $6,300  (see example)
• 1.02 Carat Round Lab Diamond: $636 (see example)

Markups and Resale Value

Buyers will face a markup on both natural and lab-grown diamonds, typically around 20%, plus sales tax. When reselling, jewelers generally purchase diamonds below wholesale prices.

For example, a mined diamond purchased for $6,300 might resell for approximately $4,000, leading to a loss of around $2,000—more than the total cost of the lab-grown diamond. A lab-grown diamond, on the other hand, might resell for around $500. While the percentage loss is higher, the actual dollar loss is significantly smaller.

Value vs. Size

Some buyers prefer to sacrifice carat weight for a natural diamond. For instance, one might choose a 0.5 carat natural, GIA-certified diamond for $1,000 over a 1 carat lab-grown diamond at the same price. While the resale value of the natural diamond might retain $700 compared to around $100 for the lab-grown one, is saving an extra $600 worth having a diamond half the size of what you originally wanted? For many, the trade-off in size outweighs the potential difference in resale value.

Jewelers and regular buyers cannot distinguish between lab and natural diamonds with a physical inspection. However, now we have access to special tools to verify a natural diamond.

Lab-created diamonds are aesthetically and chemically identical to natural diamonds. However, their primary distinction lies in their origin and production time—lab-grown diamonds can be created in a matter of weeks, making them far more affordable and theoretically unlimited in supply.

Many proponents of lab-grown diamonds argue that there is no longer a need to extract diamonds from the earth, as science and technology now offer a more efficient, environmentally friendly alternative. Lab-created diamonds are touted as being ethically produced and sustainable, appealing to consumers who prioritize responsible sourcing.

However, the rise of lab-made diamonds has disrupted the natural diamond industry, prompting strong resistance from traditional diamond miners. These miners assert that diamonds from the earth are inherently more valuable and, crucially, "real" in a way that lab-grown diamonds are not.

This division has sparked a broader debate within the diamond industry, as enthusiasts of natural diamonds maintain that these gems hold a unique value that cannot be replicated in a lab. The result is an ongoing conflict between growers and miners over the essence of what defines a diamond.

A lab-created diamond is usually grown by placing a diamond 'seed' into a special chamber with high pressure and heat. The room often mimics the natural process by which the diamonds are formed. Watch this video for more insights. 

The first stage of lab-grown diamond production is crystallization, during which the diamond seed matures over a period of five to ten weeks. Once matured, the diamond is cut, polished, and graded by a professional grading lab. A controlled chamber is filled with ultra-pure carbon-rich gases, such as methane, to create gem-grade diamonds. These gases are heated to high temperatures, causing the molecules to break apart, allowing individual carbon atoms to separate. These free carbon atoms then settle onto a diamond substrate, gradually forming layers and producing a rough diamond crystal, ultimately resulting in high-quality type II gem-grade diamonds.

In recent years, diamond growers have experimented with different techniques and process modifications, incorporating various chemicals during the initiation stage. These process variations include:

• Low-Pressure Chemical Vapor Deposition (LPCVD)
• Plasma-Enhanced Chemical Vapor Deposition (PECVD)
• Ultrahigh Vacuum Chemical Vapor Deposition (UHVCVD)
• Microwave Plasma Chemical Vapor Deposition (MPCVD)

High-Pressure, High-Temperature (HPHT) Process

The HPHT process simulates the natural conditions under which diamonds form deep within the Earth’s crust. Specialized machines can generate pressures of around 60,000 atmospheres and temperatures nearing 2,500 degrees Celsius. The growth cell used in this process contains all the essential ingredients for diamond formation, including a catalyst mix of powders and metals, pure graphite, and a diamond seed.

Three primary tools—Bar Press, Belt Press, and Cubic Press—are used to apply the necessary heat and pressure during the HPHT process. Laboratory technicians place the growth cell in the center of the HPHT chamber, where it is subjected to a consistent temperature of approximately 1,300 degrees Celsius and around 50,000 atmospheres of pressure. The catalysts in the cell react to these extreme conditions, melting the solid ingredients and allowing the graphite to dissolve.

Once the graphite dissolves, a cooling phase begins, enabling carbon atoms to accumulate on the diamond seed, gradually forming a rough diamond crystal. After the growth cycle is complete, the cell is removed from the HPHT chamber, and the rough diamond is prepared for cutting and polishing.

The HPHT process requires precise control over environmental factors to produce a high-quality gem-grade diamond. Any fluctuations in pressure, temperature, or other conditions can lead to imperfections, inclusions, or incomplete growth. Only when the process is finished and the HPHT chamber is opened can growers assess the diamond's clarity, size, and color.

If it looks like a diamond and sparkles like a diamond, there is a high chance it is a diamond—the following chart offers a comparison between the physical properties of lab-grown and mined natural diamonds.

While lab-grown diamonds are chemically identical to natural diamonds, their key distinction lies in rarity. Natural diamonds, especially those above one carat with high gem-quality, remain scarce, which drives their value. Lab-grown diamonds, on the other hand, are not rare, making them more accessible.

Lab-grown diamonds are not a replacement for natural diamonds but offer an affordable alternative for those who cannot afford mined stones. However, several myths perpetuated by natural diamond enthusiasts should not dictate one's choice. Here are some common misconceptions:

Myth 1: Natural diamonds are not rare.

Contrary to this belief, gem-quality diamonds with the finest color and clarity grades are indeed rare. The global supply of such diamonds has been dwindling for decades, particularly for stones over one carat, which are becoming increasingly scarce.

Myth 2: Natural diamonds harm the environment and fund terrorism.

This myth originated with DeBeers in the 1960s, intended to combat competition from small-scale artisanal miners in Africa who bypassed their system. While diamond mining has historically funded conflicts in certain regions, this issue is not unique to diamonds. Many other resources used in modern products have similarly financed conflicts. Moreover, the environmental impact of diamond mining is minor compared to large-scale agriculture, and it serves as a vital economic driver for many African countries, providing stable jobs and income.

Myth 3: Lab diamonds are not synthetic.

Lab-grown diamonds are, in fact, synthetic diamonds, though the term "lab-grown" was intentionally promoted to make them more appealing to consumers. Roughly 70% of these diamonds are produced in China. The diamond-growing industry resisted the term "synthetic" because it was deemed less attractive to buyers, but it accurately describes the nature of lab-created diamonds.

Myth 4: Lab diamonds are more ethical and eco-friendly.

While lab diamonds are perceived as more ethical, 70% are produced in China, a country with a poor human rights record and a heavy reliance on coal-fired power plants. Studies have shown that the carbon emissions required to create lab-grown diamonds are comparable to, if not the same as, those of mined diamonds. Additionally, lab diamond production still involves mining for resources, such as coal for power plants and raw minerals for the necessary equipment.

Myth 5: Jewelers profit more from natural diamonds.

Contrary to popular belief, jewelers do not make higher profits on natural diamonds. Margins on natural diamonds are typically slim, while lab-grown diamonds can be significantly more profitable due to their dramatically lower wholesale prices—up to 90% less than natural diamonds.

Myth 6: DeBeers has a monopoly on diamonds.

While DeBeers once held a near-monopoly in the 1980s, this is no longer the case. Over the past 25 years, their market share has dropped to around 29%, with other companies now controlling large portions of the diamond mining industry.

In summary, while lab-grown diamonds provide a cost-effective alternative, they do not come without ethical or environmental complexities. Understanding the full picture is crucial when making an informed decision between natural and lab-grown diamonds.

Competition between lab-created and mined diamonds will always exist, with several factors potentially favoring lab-grown diamonds.

One key advantage is the significantly lower price of lab-grown diamonds compared to mined ones. Although both types of diamonds undergo similar cutting, inspecting, and polishing processes, the methods of acquiring them differ considerably.

Mined diamonds typically involve a longer supply chain, requiring the involvement of miners, large corporations, dealers, cutters, polishers, and retailers to bring the raw diamonds to market.

In contrast, lab-grown diamonds bypass the mining process, resulting in a shorter supply chain. Another reason that might favor lab-grown diamonds, though debatable, is their ethical production. Mining diamonds has faced scrutiny in recent decades, with concerns that it may fund conflicts between armed groups in vulnerable regions.

For those concerned about avoiding conflict or "blood diamonds," lab-grown diamonds offer a potential solution. However, acquiring a natural diamond with a certificate verifying its origin and ethical mining practices is also possible.

Environmental considerations further enhance the appeal of lab-created diamonds. Like other forms of natural resource extraction, diamond mining can lead to land degradation. While many diamond mining companies are making efforts to reduce environmental impacts, lab-grown diamonds still pose fewer environmental risks. They require less energy to produce in a controlled laboratory setting than the energy-intensive process of extracting natural diamonds. Moreover, technological advancements may further reduce the energy consumption of lab-grown diamond production, driving down both environmental impact and cost.

In conclusion, lab-grown and natural diamonds will likely continue to hold distinct roles within the fine jewelry industry, complementing rather than replacing one another.