De Beers, the company behind the iconic slogan “Diamonds are forever,” is now betting on lab-grown diamonds for an unexpected purpose: industrial use. While its luxury jewelry business faces challenges, its industrial diamond division is thriving.
The company’s research arm, Element Six, has become a leading supplier of synthetic diamonds for industrial applications. These lab-grown stones are used in cutting tools, abrasives, and drilling equipment, rather than in jewelry. Element Six’s success marks a significant shift for De Beers, which recently exited the lab-grown jewelry market after a six-year attempt.
From Jewelry to Industrial Tools
Element Six, headquartered in London, operates a research site in Oxford, England, where it produces synthetic diamonds under extreme heat. Unlike gem-quality diamonds, which are prized for their clarity and brilliance, industrial diamonds are valued for their hardness and durability. Approximately 80% of mined diamonds are already used for industrial purposes, as they often lack the quality needed for jewelry.
Element Six now generates much of its revenue by supplying diamonds for drilling and mining operations, where they enhance the performance of tools. “Lab-grown diamonds for jewelry are very different from those used in industrial applications,” Element Six CEO Siobhán Duffy told The Times. “The engineering and price points are tailored to meet specific industrial needs.”
Challenges and Opportunities
Despite its success, Element Six faces challenges. Its primary customers are in industries like oil, gas, and automotive manufacturing—sectors often referred to as “sunset industries” due to their declining growth. Additionally, the company competes with manufacturers in China and India, where lab-grown diamonds are produced in large quantities.
However, the rise of artificial intelligence (AI) has opened new doors. Synthetic diamonds can handle high levels of heat, making them ideal for use in advanced electronics. This potential has sparked fresh interest in Element Six’s products, positioning them as a key player in the tech industry.
A spokesperson for Element Six told Fortune that synthetic diamonds represent “a significant growth opportunity for De Beers Group.”
A Changing Diamond Industry
De Beers’ parent company, Anglo American, recently announced plans to spin off the diamond business. Anglo American, a Fortune 500 Europe member, owns 85% of De Beers and aims to focus on its core operations in copper, iron ore, and crop nutrients.
The decision comes as the diamond industry faces headwinds. Demand for natural diamonds has declined due to economic uncertainty and shifting consumer preferences, particularly among younger generations. Lab-grown diamonds, which are cheaper and perceived as more sustainable, have gained popularity, especially among Gen Z and millennials.
De Beers, once a dominant force in setting diamond prices, has repeatedly slashed prices to attract buyers. However, this strategy has done little to reverse the broader decline in demand for natural stones.
The Rise of Lab-Grown Diamonds
Lab-grown diamonds have become a preferred choice for younger consumers, who value affordability and sustainability. A slowdown in luxury spending and changing attitudes toward marriage have further reduced interest in traditional diamond jewelry.
While De Beers’ jewelry business struggles, its industrial diamond division offers a glimmer of hope. By focusing on the practical applications of lab-grown diamonds, De Beers is adapting to a rapidly changing market—one where diamonds are no longer just about luxury, but also about innovation and utility.
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