Lab-Grown Diamonds Fuel De Beers' $2.3B Write-Down: Unengineerable Scarcity
- Rayah Levy, FCD Invest President
- 3 hours ago
- 3 min read
Part 2: Scarcity That Cannot Be Engineered
Several clients and colleagues have followed up on last week’s analysis of Anglo American's third consecutive write-down to De Beers' carrying value, requesting further insight into its implications. As promised, here is Part 2 of my three-part series.
Part 2: Scarcity That Cannot Be Engineered – An examination of colored diamonds’ unmatched positioning as the market pivots away from lab-grown supply floods. Unlike white diamonds—now commoditized by synthetic replication—fancy color diamonds derive their value from immutable geological rarity, vibrant saturation, and hues that no laboratory can authentically reproduce at scale.
Part 3 (Next Week): The Future of Colored Diamond Finance – A strategic outlook on how natural fancy color diamonds will anchor next-generation wealth preservation and portfolio strategies.
I appreciate your engagement and look forward to concluding this series.
Fancy Color Diamonds: A Different Asset, Not Just a Different Shade
Fancy color diamonds—particularly fine pink, blue, red, and green—do not participate in this oversupply story; they live in a different economic universe. Their price behavior over the last two decades has consistently diverged from the broader white diamond market and from many traditional asset classes.
Note: When we refer to white diamonds, we are not including D Flawless diamonds, which are completely colorless and considered in the same investment class as Fancy color diamonds.
Independent data tell the story:
The Knight Frank Luxury Investment Index shows select Fancy Intense Pink diamonds over 3 carats appreciating about 443% between 2000 and 2012, outpacing the Dow Jones, gold, and prime real estate over the same period.
Analyses comparing colorless and colored diamonds over more than a decade found a roughly 318% rise for a 3-carat Fancy Light Pink versus about 130–159% for comparable colorless stones.
The Fancy Color Research Foundation (FCRF) has documented an overall 205% increase across fancy color diamonds since 2005, with pinks up 390.9% and blues up 241.7%, while yellows rose 47.4%.
FCRF also documented a 550.48% increase in 1-carat Fancy Vivid Pink diamonds, 539.91% increase in 3-carat Fancy Vivid Pink diamonds, 497.62% increase in 5-carat Fancy Vivid Pink diamonds, and 480.43% increase in 10-carat Fancy Vivid Pink diamonds, outpacing the Dow Jones at 360.94%, the S&P 500 at 484.41%, and Shanghai at 233.01% since 2005.
Recent years have reinforced the trend: in several periods, fancy color prices have risen faster than many luxury assets and even outpaced the S&P 500 in select categories.
At the same time that De Beers is being written down due to lower long-term pricing assumptions, the segment of natural diamonds defined by radical scarcity and high color saturation has demonstrated resilience and long-horizon compounding.
Structural Tailwinds: Scarcity You Cannot Engineer
The core reason is simple: you can manufacture white lab‑grown diamonds at scale, but you cannot engineer geological miracles.
Several structural forces support fancy color diamonds as a long‑term store of value:
Irreversible supply contraction. Key sources of rare colors, such as the Argyle mine for pinks, have closed, with no comparable replacements discovered.
Microscopic natural supply. Only a tiny fraction of diamonds mined each year qualify as investment‑grade fancy color, and an even smaller subset meets the thresholds of vivid saturation, desirable hue, and top clarity.
Rising global demand for portable, discreet wealth. In a world of capital controls, geopolitical risk, and financial‑system fragility, investors increasingly seek tangible, easily transportable stores of value—a role where high‑value fancy color stones are uniquely suited.
Economists and alternative‑asset analysts have noted that high‑quality fancy color diamonds behave like one of the most concentrated and portable forms of wealth on earth: millions of dollars can sit in the palm of a hand, without systemic counterparty risk.
Please email FCD Invest at info@fcdinvest.diamonds to discuss your personalized long-term investment strategy.
For more information on Fancy Color Diamonds as an investment, please visit our Fancy Color Diamond information page linked here.
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