One of the biggest man-made diamond manufacturers in the country is going out of business.
According to multiple reports, including from the Financial Times, WD Lab Grown Diamonds, the second-largest U.S. producer of synthetic diamonds, has filed for bankruptcy.
The outlet described the situation as “the sector’s first big casualty of a burgeoning glut of fabricated gemstones.”
In short, WD Lab Grown Diamonds fell victim to the rapidly growing industry it played a role in pioneering.
It’s an untimely, if not entirely foreseeable, result of an industry that appears to have grown too big, too fast, ironically enough, in the name of sustainability.
The Times notes that traditional diamond miners had long predicted that the industry would collapse under itself.
South African-based De Beers Diamond Consortium, for example, has long argued that overproduction would push manufacturers into accepting losses as the price for synthetic diamonds cratered.
It’s all basic Econ 101 stuff involving elementary concepts like supply and demand. If supply outpaces demand, prices will tend to come down — sometimes to unsustainable levels.
Adding credence to that, the Financial Times noted that synthetic “diamond prices for a single carat have crashed more than threefold in seven years as manufacturers continue to flood the market”
Would you rather have a natural diamond over a synthetic one?
Yes: 92% (24 Votes)
No: 8% (2 Votes)
There is one other core issue worth addressing here: This is bad news for climate change and green policy advocates.
While the two may seem unrelated, it’s worth noting that a big push for synthetic diamonds was based on the “green” aspect of it.
Namely, green advocates feel that diamond mining and making is wildly destructive to the planet, so this alternative method was a welcome change for them.
In a 2021 press release, WD Lab Grown Diamonds bragged about a new certification which allowed the company “to use the claims of ‘Certified Sustainable’ and ‘Certified Climate Neutral’ on their high-quality, As Grown diamonds.”
“We are tremendously proud and humbled to be the first company to achieve sustainable diamond certification,” Sue Rechner, former company CEO, said in the statement.
She added: “This accomplishment reflects our wholehearted commitment to safeguarding the environment, protecting the human rights of workers and communities, and providing reassurance to the modern consumer with fully traceable, guaranteed conflict-free product.”
“Safeguarding the environment” and “protecting the human rights of workers and communities” sounds great and all, but it clearly didn’t translate to the one thing many companies need to survive: sales.
Is this a lack of consumer interest in green products, even ones that are wildly underpriced? Or are other manufacturers squeezing out the American companies, as one diamond analyst suggested to the Financial Times?
Paul Zimnisky told the outlet that “it’s getting very difficult for anyone to compete with the Chinese and Indian producers” in the current market.
One thing China and India have in common? They’re not nearly as unhealthily obsessed with climate change as the West is.
Which is all to say: There’s mounting evidence that free market forces just don’t care about “green initiatives,” no matter how much the left tries to force it down people’s throats.
There’s always the possibility that customers just aren’t that interested in budget-priced diamonds — long viewed as a symbol of status and wealth — when it comes time to give them as gifts or for marriage proposals.
But if a company that’s vocally bragged about its “sustainability” initiatives is being put out of business by companies that don’t care nearly as much about green policies — that should speak volumes to the left.
