“A diamond is forever.” The slogan, popularized by the giant De Beers, is faltering. After more than one hundred and thirty years of existence, the company is to be sold by its parent company, the British multinational Anglo American, which owns 85% of it (alongside Botswana). The operation comes at the worst possible time, as De Beers is struggling to find buyers for its stones and is posting declining results.
Cyclical factors are at play – inflation and economic uncertainty are weighing on sales in both Asia and North America – but they only tell part of the story. In the long term, competition from synthetic diamonds could pose “structural demand problems,” warns a note from Jefferies. Because while lab-grown stones have been around for decades and are the norm in industrial tools and electronics, technological gains and industrialization are leading them to compete with natural diamonds in their reserved domain: jewelry.
Indistinguishable from stones extracted in mines, they are presented as an alternative that is already two to four times cheaper and whose prices are falling every year. Counterintuitively, this is the trend that De Beers is counting on. The company no longer produces synthetic diamonds for jewelry, via its subsidiary Element Six, and plans to increase marketing campaigns to anchor the value of natural diamonds, which are rare… and therefore more precious and whose value will not tarnish.
Enough to suggest a war of narratives, while laboratory stones communicate their “ethical” character, without mining. A symbol: the 675 million euro factory of the American company Diamond Foundry, which is due to open at the end of the year in the Spanish village of Trujillo, is supported by the actor Leonardo DiCaprio. Whose role in the film Blood Diamondin 2006, popularized the issue of “conflict diamonds,” or “blood diamonds,” and shook the industry.
You are reading an article from L’Usine Nouvelle 3734 – September 2024
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Source: www.usinenouvelle.com
