24 Oct 2019 12:12

Trutnev wants Alrosa to develop lab-grown-diamond expertise, company has no such plans

SOCHI. October 24 (Interfax) - Deputy Prime Minister and Presidential Envoy to the Far East Federal District Yury Trutnev, who supervises Alrosa , said the company should develop its expertise in the sphere of lab-grown diamonds and adopt international standards for marking them; Alrosa, in response, reiterated that it is not planning to expand into the lab-grown market and that it considers its focus on natural diamonds a competitive advantage.

Trutnev said at the Russia-Africa forum that lab-grown diamonds have played a large role in the market's supply crisis this year.

"The issue isn't that not many people are selling them; there'll definitely be more people selling them. The issue is that the diamond has always been sold as a legend - not as a physical object, but as an object of supreme value. When an artificial stone of the same quality appeared, the pedestal under this legend took a hit, and we need to take this into account," he said.

De Beers, the world's biggest diamond miner by revenue, reacted very well, Trutnev said, by launching the Lightbox project last year, in which pieces made with lab-grown diamonds are sold at standard prices.

According to Trutnev, De Beers entered a promising new market and protected its main market, natural diamonds, in part by introducing marking for its lab-grown diamonds.

"I think this is the correct direction to move in," he said.

"I don't know whether Alrosa should produce artificial stones. In my opinion, probably yes, because this is a close, competitive market, this is new technology. And given that today lab-grown diamonds are already beginning to surpass natural ones in a number of ways, continuing not to participate in this market, waiting for even bigger shocks, seems to me to be not very far-sighted," Trutnev told journalists later.

If Russia and Africa's major producers could facilitate the adoption of international standards for marking lab-grown stones, "we would be defending this business," definitively separating the markets of natural and artificial stones, he said. Such legislation would be in some ways analogous to copyright law.

Having a system of marking regulated on the level of international legislation is of fundamental importance, Trutnev said.

At the same session at the forum, Alrosa head Sergei Ivanov said that diamond miners feel pressure from lab-grown stones in certain categories but that this is not the only reason for the crisis in the diamond market.

"Alrosa is closely following the development of the lab-grown market, including the development of technology for creating these stones in laboratory conditions, marketing initiatives in this market, and means of detecting such diamonds. The company also draws attention to the development of the Lightbox project and believes that this is a successful example of an initiative to delineate the markets of lab-grown and natural diamonds. Following the launch of the project, prices for lab-grown diamonds fell significantly, bringing them closer to the 'expensive fashion jewelry' class than to luxury products," an Alrosa representative said.

"However, the company does not have plans to create or acquire a business for producing or selling lab-grown diamonds. Alrosa was, is, and remains a producer of high-quality natural rough and cut diamonds, mined in accordance with all standards of social and environmental responsibility. What is more, we consider this our competitive advantage," the representative said.