Lab-grown diamonds have increased in awareness and popularity over recent years, but to many, they’re still a bit of a mystery. Most people understand that lab-grown diamonds are grown in a lab through a process that replicates how mined diamonds are created in the earth. But after that, it can all get confusing, especially when considering why they’re so different in cost. So, we’ve broken down all the information you need to know about the cost of lab diamonds vs. mined diamonds and tips on making the best choice for your preference.
Lab Diamonds vs. Mined Diamonds:
What Exactly Is a Lab-Grown Diamond?
Lab-grown diamonds are just like mined, natural diamonds except for where they are grown. Lab-grown diamonds are real diamonds and are the same, both chemically and visually, as mined diamonds. They have the same sparkle, have a variety of the same types of color, clarity, and carat weights, and can be cut into all of the same shapes. They are also just as hard and durable as mined diamonds.
Through a precise scientific process, lab-grown diamonds are created by replicating a mix of high pressures, temperature conditions, and use of gases to drastically speed up the process of natural diamond creation underground. This process uses half the energy of diamond mining and results in a beautiful rough diamond, which is then cut and polished just like a mined diamond.
In a general comparison, lab-grown diamonds can typically cost 50-70% less than natural, mined diamonds. This percentage difference is based on a few factors. For one, the demand for mined diamonds remains much higher than for lab-grown diamonds and the market has a regulated supply, preventing too much supply from reaching the market at once and lowering the price. Also, the diamond mining process has been around for a very long time and doesn’t often experience innovations.
For lab-grown diamonds, their awareness is much lower but they’ve been fast increasing in popularity. The process to make them has also gone through repeated innovations and technological advances that have drastically reduced the production costs. For example if you’re considering an excellent cut H color, nice SI1 clarity, 1 carat diamond, the natural, mined version would cost around $6,100 while the lab-grown version would cost around $2,300 for comparable if not better quality.
These numbers reflect prices as of 2021. (To browse current loose diamond prices, we invite you to try our loose diamond selection). While we do not speculate on nor project future diamond prices, there are a few reasons to believe that lab diamond prices could hold steady from current levels. First, lab-grown diamonds are still real diamonds, and for that reason, contain an inherent value reflected in their cost. Second, they are expensive to cut. Diamonds are so hard, it requires specialized equipment and very well-trained cutters to produce a properly cut, beautiful diamond. Third, even though the process could continue to see innovations, it must still be overseen by diamond-growing experts and with the use of expensive machinery. And finally, with demand for lab grown diamonds increasing exponentially, and energy and raw material prices rising, this could put upward pressure on cost of production.
Benchmark Diamond Pricing
For mined diamonds, there is a market-wide industry standard for how prices are determined. Establishing a baseline diamond price combines looking at color and clarity gradings and carat weight, and referencing that information with the Rapaport List – an international benchmark used to set diamond prices per carat that is updated weekly based on the state of the market.
There is no such list or industry standard formula for how lab-grown diamonds are priced. This is why a decade ago, a 1 carat lab-grown diamond was much more expensive than one you would purchase today. Mainly through the process of technological innovation, equipment developed to be more efficient and savings was passed on to consumers.
Today, lab-grown diamonds are produced by many manufacturers and the cost to produce a diamond will vary based on many factors. These factors include the quality of equipment, method of production (CVD vs. HPHT), level of expertise of the staff overseeing the diamond growth, and skill of the diamond cutter. Because of this, there is often a great range of pricing when researching and it can be harder to identify a high quality lab-grown diamond. For this reason, it’s really important to partner with a jeweler who sources lab-grown diamonds from reputable manufacturers.
It’s still the early days of the lab-grown diamond market, and prices are a steal compared to natural diamond prices. The market doesn’t yet have uniform pricing and may not for some time still. In the natural diamond market, three companies set the baseline price on top of which international market prices rise and fall based on supply and demand. In the lab-grown market, this phenomenon does not exist and will vary from producer to producer based on the factors covered above.
Much of reaching a uniform pricing model will be based on what transpires over the coming years. Like any modern technology, prices have significantly come down from the earliest days of creating lab-grown diamonds five to six years ago. Back then, a 1 carat investment-grade, lab-grown diamond was only slightly less in price than a natural diamond, and it wasn’t easy finding 1 carat, or larger, lab grown options. Today, the discount is substantial, and one can easily find beautiful lab-grown diamonds in sizes as large as 7 carats.
The lab-grown diamond creation process is facilitated in a lab with human oversight. The natural process that takes hundreds of years in the ground is exactly replicated over a few weeks in a lab. Therefore, all the same natural versions of mined diamonds appear in the form of lab diamonds – those overseeing the process can’t simply intervene to consistently create only the most optimal types of diamonds. This is why lab diamonds can appear in all different sizes, shapes, carat weights and levels of clarity as when they come out of the earth. Also, more established and experienced growers have the know-how to grow nice diamonds, whereas newer companies will need time to learn how to produce the same quality. And diamonds from both places will still find their way into the market.
Mined diamonds experience an exponential price increase with each full carat. This price jump is based on the level of quality of the diamond’s attributes – specifically the gradings for cut, color, and clarity. For example, D/E color natural diamonds represent only 1% of all diamond supply, which makes them exponentially more expensive from a supply perspective. This is not the case for lab-grown diamonds. While they will certainly increase with each full carat or color grade, you can expect to not see as huge of jumps in price as you will with mined diamonds.
1.75 carat oval diamond
2 carat oval diamond ring
Most people dream of the diamond in their engagement ring in terms of a full carat size. Someone seeking a 2 carat diamond engagement ring is always going to be much more likely than someone seeking a 1.77 carat diamond engagement ring. But it’s these ‘special’ sizes that can deliver a really beautiful diamond without the full price hit of the traditional full-carat diamond sizes.
These special sized diamonds are known by a few different terms: off-size, just-shy, and in-between, to name a few. These are the carat weights that exist in the realm between full sizes and they will be less expensive than taking the leap to the full carat weight. While it may seem like these diamonds are mistakes in cutting, these are intentional sizes and carat weights. This is the case for a couple of reasons.
First, while diamond cutters do try to cut diamonds for whole carat weights, their priority is to produce an excellently cut diamond. To do that, they are working around the attributes that are presented in each rough diamond they are to cut. Maximizing the optimal color, clarity, and cut qualities in each diamond, as well as trying to preserve carat weight, produces the most valuable diamond. And if that means it’s better to cut a 1.10 carat diamond instead of a 1 carat, or a 1.94 carat diamond instead of a 2 carat, the diamond cutter will do just that.
Second, offering variations on traditional sizes is good for the diamond market. The pricing of full carat sizes can exclude a lot of buyers who simply don’t have the budget for the full carat size of their dreams. Intentionally offering more options of diamond sizes and carat weights means that more people can afford diamonds with high quality color and clarity attributes that are the most appealing.
Lab-grown diamonds function in much the same way as these off-size diamonds. Lab-grown diamonds are real diamonds and cut just like natural, mined diamonds. They exhibit the same fire, scintillation, and brilliance, and are crafted into the same shapes and sizes as their natural counterpart. There is nothing structurally or optically that differs about a lab-grown diamond, and it is much more cost-friendly, just like the off-size diamonds.
While carat weight is quite important when determining cost, it may not be as important to you when choosing a diamond you love. Diamond carat weight and size are often used interchangeably, but they are different measurements for a diamond – lab grown or mined. Carat is the measurement of the weight of the diamond. The size refers to how that weight gets distributed in the cut to create a larger or smaller looking diamond.
A heavier carat weight can indicate a bigger looking diamond, but that is not necessarily a given. Depending on how the diamond is cut, a smaller carat diamond can look bigger than a larger carat diamond. Important characteristics to consider for this visual look of a diamond are proportion and dimensions. These will give you a much clearer picture of how big a diamond will look from a ‘face-up’ angle.
The importance of carat weight all comes down to personal preference and how you intend to set the diamond. There are many ways to set a diamond so that it appears larger, including using a thinner band, split shank, or halo setting. And most people are unable to tell a size difference from the look alone unless they are viewing two differently sized diamonds side by side.
In the photo shown, the emerald cut diamond on the left weighs 1.5 carat, whereas the marquise cut diamond on the right weighs 0.75 carat. Substantial savings could be had by going the route of a marquise shaped diamond without sacrificing on look.
Diamond Certification & Resale Value
It should also be noted that just as with mined diamonds, high quality lab-grown diamonds will be accompanied by a grading certificate proving the validity of their features. Investment-grade mined diamonds and lab-grown diamonds are graded to the exact same specifications. Therefore, they will each be accompanied by grading reports from independent laboratories such as the IGI (International Gemological Institute) and the GIA (Gemological Institute of America), with the IGI being the standard for lab-grown diamonds.
Despite being graded to the same standards, the resale market for natural diamonds and lab-grown diamonds is not equal. All resale value would depend on initial cost of acquisition, and a benefit of natural diamonds is that some retailers – ourselves included – offer a trade-in policy for natural diamonds. This policy can be offered because 50 years of natural diamond pricing history shows us that future diamond prices will likely hold steady or go up.
There isn’t yet enough knowledge or history for lab-grown diamonds for retailers to offer trade-ins, or for standardization in a resale market, because no one knows where lab-grown diamond prices are heading. That being said, we find that most people view their engagement ring from the expectation of keeping it forever, so they want to get the best that their money can buy. In these terms, a lab-grown diamond is an excellent choice for a beautiful ring.
Whether choosing a mined diamond or a lab-grown diamond, the end result should be the same – you should love your diamond. Determining your priorities and viewing a variety of diamonds in person is what we always recommend to choosing a diamond for your engagement ring that will delight you year after year.