Debswana finally admits to concern over synthetic diamonds
The synthetic diamonds topic has been one uncomfortable topic for mining giant Debswana and the Government of Botswana. An economy largely dependent on the allure of a shining stone millions of years old from deep underground remains at risk as the quality of laboratory manufactured diamonds continues to grow.
It was a topic that did not feature in the presentation about ‘Securing the Sustainability’ of diamond production into the future given by Debswana Managing Director, Balisi Bonyogo at the Resource Sector Conference last week.
When it was put to him that technology behind synthetics is growing in leaps and bounds, Bonyogo said “Like any other company, you get worried about emerging substitutions or anything that can take you out.”
While he played down the concern about the synthetics, Bonyogo stated that in collaboration with De Beers, 50% shareholder of the company, they have adopted a ‘detect and defend’ against synthetic diamonds, “We do so to keep the so called synthetic diamonds out of the mix, they do not belong in the mainstream. What we are selling is not stuff that comes from the laboratory, we are selling stuff that has billion years behind them. I’m confident that in the next foreseeable future synthetic diamonds will not disturb what we are doing even though people are trying so hard to produce them.”
He said the allure of a mined diamond remains genuine to women all over the world and shall remain so in his view.
Despite Bonyogo’s assurances, research institute, Botswana Institute for Development Policy Analysis (BIDPA), warns against synthetics in their 2014 research paper, ‘Synthetic Gem Quality Diamonds and their Potential Impact on the Botswana Economy’.
The research conducted by former BIDPA researcher Professor Roman Grynberg, Margaret Sengwaketse and Masedi Motswapong warns that taking into consideration the rapid growth of synthetic diamonds in the past 20 years, “there is reason to believe that given the market conditions prevailing in the mined gem quality diamond industry, synthetics do constitute a serious threat to the industry.”
The research states that De Beers’ inability to affirm its position against synthetics exposes Botswana to an uncertain future. “While a joint venture with De Beers in the production of synthetic gem quality diamonds may mitigate a part of the loss that Botswana would suffer as a result of the widespread use of synthetics in the jewellery industry, this cannot compensate for the loss of economic rents in the mined diamond sector that might result,” reads the research report.
The research shows that shortage of mined diamonds depends largely on consumer acceptability, which could grow to represent approximately one third of the gem quality market by 2018.
“The excess demand for mined diamonds may well be the factor that finally precipitates a substantial entry of synthetics into the jewellery market and may well be associated with long term decreases in price.”
The BIDPA researchers say this is possibly the lighting spark for synthetics as they could become more acceptable to consumers.