Lab-grown versions of the gems have upended the traditional diamond industry, snatching customers and market share in a relatively short span of time. That’s threatening an industry which a small handful of diamond companies have long dominated.   

While the diamond industry’s stronghold may be on shaky ground, it might not be doomed to failure after all. 

Gem Diamonds, a London-listed miner, saw an uptick in diamond sales during the first half of 2024 to $77.9 million, up 8.8% from the same period last year.

During this time, the company sold nearly 5,000 more carats, a unit to measure the weight of diamonds. Gem Diamonds sold 11 diamonds worth more than $1 million each, generating $29.5 million in revenue in the first six months of the year, it said in its latest earnings published Tuesday. 

“There has been an increase in volume of ore treated through the plant during H1 2024, which has been a result of improving plant stability and operational efficiencies. This has resulted in higher recovery of diamonds and increased sales for the period,” a company spokesperson said. Gem Diamonds continued to “stay abreast of developments in the diamond market,” the spokesperson said when asked about how the company is coping with the rise of lab-grown stones.

The report comes at a time when rough diamond prices have dipped due to a confluence of different reasons, from lackluster spending appetite to the popularity of cheaper alternatives. 

The diamond industry has suffered high-profile setbacks that have added to its tensions. For instance, De Beers, the dominant British company that once controlled 85% of diamond mining, has faced volatile diamond prices because customers favor lab-grown variations. Last month, the group said it would slash production as it grapples with its future after being sold by commodities giant Anglo-American.      

That’s not all—younger shoppers seem to be falling out of love with natural diamonds. Lab-grown diamonds now account for nearly a fifth of all diamond sales globally. The bad reputation attached to their sourcing is one reason prompting customers to switch. But it’s been accelerated by the pricing of lab-grown alternatives (sometimes as much as 80% lower than real diamonds) amid high inflation, making it a more value-for-money purchase for cash-crunched buyers. 

Jewelry companies have started to recognize this trend. Pandora, for instance, pivoted to lab-made diamonds in 2021 and has seen its business flourish since. The company’s CEO Alex Lacik told Bloomberg on Tuesday that people will buy more lab-grown diamonds in the next 10 years than natural ones as “consumer perception swings really fast.” That’ll deal yet another blow to the traditional diamond market.

There may also be a broader shift underway as shoppers look to gemstones such as rubies and sapphires for their engagement rings.   

The rise of lab-grown gems

Overall, the global market for lab-grown diamonds is estimated to reach $59.2 billion by 2032, more than double its value in 2022, according to Allied Market Research data. The volume of lab-grown diamonds being cut and polished while fetching a fraction of the natural stone’s pricing means it presents a longer-term change for the industry.

Meanwhile, other companies, such as De Beers, have experimented with offering real and synthetic diamonds hand-in-hand but ultimately saw that the economics of pursuing a business in lab-grown alternatives didn’t make sense. 

It’s going to get quicker and possibly cheaper to start making lab-grown diamonds in bulk—and that’s not great for the existing diamond market. But the growing delta between these two gems could open up new opportunities.    

“We are getting to a pivot point where the profitability of retailers selling lab-grown is a lot less than it was in the previous three to five years,” Paul Zimnisky, an independent industry analyst, told the Financial Times in July. 

“This could be a catalyst to returning to natural diamonds. Retailers aren’t loyal to lab-grown or natural diamonds, they’re loyal to making money.”

Only time will tell what this means for companies like Gem Diamonds, which exclusively mines real gems.  

Update, August 13, 2024: This article has been updated with a comment from Gem Diamonds.