Lab-grown diamonds face new labelling rules in Russia amid rapid expansion

Russia is set to introduce new rules governing the sale of laboratory-grown diamonds from September 1, requiring sellers to clearly distinguish synthetic stones from natural diamonds in a move aimed at protecting consumers.

The regulations, approved by the Russian government back in late May, prohibit sellers from describing stones of “non-natural” origin as diamonds. Instead, such products must be labelled as “cut synthetic diamonds.”

The new requirements apply to all precious stones covered under a specific federal law, including rubies, sapphires, emeralds and alexandrites.

Under the rules, sellers will also be banned from using terms that could mislead buyers about the origin of synthetic stones, including descriptions such as “natural,” “genuine,” “real,” “mineral” and similar wording.

The regulations will also prohibit the use of the international 4C system for gemstone quality assessment for these stones, while stone weight will have to be displayed only in grams rather than carats.

Synthetic stones gain ground

The new rules come as laboratory-grown gemstones continue to gain market share globally. Bloomberg previously reported that Chinese synthetic diamond manufacturers benefited from the artificial intelligence boom, as demand increased for lab-grown diamonds used in cooling technologies for advanced computer chips.

Synthetic rubies, sapphires and emeralds already account for 70% to 90% of mass-market jewellery products, while synthetic alexandrites represent 99.99% of the segment. In higher-priced jewellery categories, the share of synthetic colored stones is lower, estimated at around 20% to 40%.

Synthetic diamonds currently make up between 25% and 50% of newly supplied retail jewellery items in the mass-market segment by unit volume, with their share expected to continue increasing and potentially exceed 90% of new supplies in the future.

Tougher consumer protection

According to the Russian government, these measures are introduced in an effort to strengthen consumer protection. The Ministry of Finance previously warned that unclear terminology allowed sellers to present jewellery containing synthetic stones as comparable to natural diamonds and sell them at similar prices despite significantly lower production costs.

The wholesale price of synthetic diamonds in some categories has already fallen below $70 per 0.2 grams (one carat), compared with more than $4,000 for a natural diamond of the same weight.

The difference between synthetic and natural diamond prices can therefore reach 98%, highlighting the growing challenge laboratory-grown stones pose to the traditional diamond market.

The diamond industry in Russia holds significant global importance, as Russia stands as the world’s largest producer of diamonds, accounting for about 31 % of global production.

ALROSA, a state-owned company, plays a pivotal role in this industry, responsible for mining approximately 90% of Russia’s diamonds. It is also ranked as the single largest diamond mining company in the world by volume.

By Nazrin Sadigova