In this article, we will list 10 cheap alternatives to diamonds for engagement rings. If you want to skip our discussion about the global diamond industry, go to 6 Cheap Alternatives to Diamonds For Engagement Rings.
Diamonds are one of the most expensive and arguably the most popular precious stones in the world. However, until very recently, their prices were artificially manipulated through a monopoly in the global supply chain.
In the late 19th century, a massive diamond discovery in South Africa prompted a diamond rush when mining businessmen rushed to have their share in the bounty. Cecil Rhodes was the most eager of these businessmen as he bought as many diamond-mining claims as he could. These properties eventually became De Beers Consolidated Mines Limited.
De Beers had a strategic focus on monopolizing distribution and eventually managed to convince just about all of the world's rough diamond suppliers to sell through Dee Beer's channel. This led to De Beers eventually gaining control of the global diamond supply, which gave it the power to influence prices. This distribution channel operated under Diamond Trading Co. (DTC) and gave De Beers complete control and discretion to distribute the majority of the world's diamonds.
In the second half of the twentieth century, new world-class mines were discovered in Russia, Australia, and Canada, and it became increasingly difficult for De Beers to control the global supply. The biggest risk to the survival of the De Beers cartel was for these new world-class mines to begin selling directly to the market, bypassing them altogether. As a result of this development, De Beers' market share, which was 90% at its peak, began to fall.
It is worth noting here that the majority control of the De Beers since the 1920s had been with the Oppenheimer family, which also founded Anglo American Plc. Today Anglo American Plc owns majority stakes in De Beers and the majority of Anglo American Plc shares are owned by institutional investors such as BlackRock, Inc. (NYSE:BLK). It is an American multinational investment company and the world's largest asset manager with $10 trillion in assets. BlackRock, Inc. (NYSE:BLK) currently owns 8.7% of the outstanding shares of Anglo American Plc. In addition, the second largest shareholder after BlackRock, Inc. (NYSE:BLK) holds about 7.7% of the outstanding shares.
Circling back to the De Beers monopoly, it got its greatest hit when the company lost control of Argyle Mine which was then one of the largest diamond-producing mines in the world by volume. Soon, other mines followed suit in the next few years and new world-class mines in Canada started selling independently of De Beers. Eventually, in 2000, the company announced a shift in its strategic initiative with a focus on independent marketing of the De Beers brand.
In 2001, several lawsuits against De Beers were filed in US courts. These suits alleged that De Beers unlawfully monopolized the supply of diamonds and conspired to fix, raise, and control its prices. These lawsuits also alleged the company's false and misleading advertising. Eventually, in 2012, the US Supreme Court imposed a $285 million settlement on the company with an agreement that it would refrain from engaging in certain acts that violate federal and state antitrust laws.
Today, the global diamond market was worth $504 billion in 2021. However, the diamond market is showing signs of slowing down. It is expected to grow at a compounding annual growth rate (CAGR) of only 4.6% between the period of 2022 and 2026, by the end of which, it will sit on $661 billion. Global diamond reserves stood at 1.4 billion carats as of January 2021.
Today, Russia is the world's largest diamond supplier, as its diamonds accounted for 1/3rd of global diamond production in 2020. More recently, the market has experienced a significant downturn. The price of rough uncut diamonds has decreased by as much as 35% over the past year. In addition, wholesale and polished diamonds also saw a 20% decrease in their overall prices.
Lab-grown diamonds, on the other hand, are gaining momentum, particularly for engagement rings. They are more affordable, compared to natural diamonds, and are considered more environmentally friendly. The younger generation, in particular, shows a preference for these diamonds. The market for these diamonds was worth $19.3 billion in 2020, and it is expected to reach $50 billion by 2030, growing at a CAGR of 9.4% during this forecast period.
Moving forward, current geopolitical conditions may affect the natural diamond market negatively. Russian sanctions imposed by the United States (the largest consumer of finished diamonds) in the wake of the Russia-Ukraine conflict will have a significant impact on the market since the country produces 1/3rd of rough diamonds.
We will also see interesting incorporation of technology in the diamond supply chain in the near future. Diamonds change hands 20 to 30 times from being mined to reaching the end consumer market, making it extremely difficult to know where they originated. However, it is becoming critical to know the origins of the diamond because of Russian sanctions and the presence of lab-grown diamonds. The diamond industry is turning to technology for this solution.
Blockchain technology is known for its transparent and immutable ledger. It is being used as a tool to track every step of the intricate journey from the diamond's origin to the end consumer. De Beers, for example, has integrated a blockchain platform into their code of origin inscriptions by including a QR code tag. This tag can be scanned to open a multimedia information pack verifying that the diamond is natural rather than lab-grown and identifying the country of origin.
Despite the recent downturn in the diamond market and fall in prices, they are still one of the most expensive precious stones. Even lab-grown diamonds are out of budget for many young individuals. However, the good news is that there are many suitable and much more affordable alternatives to diamonds for engagement rings. With that backdrop, let's look at the 10 cheap alternatives to diamonds for engagement rings.
10 Cheap Alternatives to Diamonds For Engagement Rings
To curate our list of the 10 cheap alternatives to diamonds for engagement rings, we gathered a list of the alternatives through threads on public forums such as Reddit and Quora. However, the prices of 1 carat of each of these materials can vary significantly depending on the quality and cut. So, for each of the materials, we used trusted online sources to determine the average price of 1 carat of the material by looking at at least three quotes of a decent quality cut. For our research, we also repeated this process for diamonds and found the price of a per carat of naturally grown diamond with decent quality to be $4,000. Then we sorted remaining of the materials according to their price. The lower the price, the higher the alternative ranks on our list. Note: prices of certain gemstones can vary quite significantly, so we did our best to present a reasonable quote based on our research.
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10 - Sapphire
Average Price Per Carat: $3500
Sapphire is 10th on our list of 10 cheap alternatives to diamonds for engagement rings. It is one of the most popular alternatives to diamonds because of its hardness. Sapphires rate 9 on the Mohs hardness scale, whereas diamonds are slightly ahead at 10. They come in a variety of colors, with blue being the most well-known and common. Other color options for Spahires include yellow, pink, green, teal, and white. One caveat with sapphires, as compared to diamonds, is that they require more maintenance, like re-polishing, over time.
9 - Ruby
Average Price Per Carat: $3000
Ruby is 9th on our list of cheap alternatives to diamonds for engagement rings. These are considered classic yet bold gemstones, which may not be as hard as diamonds but still are quite durable. Some of the countries of origin of Ruby include Myanmar, Thailand, Mozambique, Afghanistan, and Sri Lanka. A ruby engagement ring can range from $1,000 to $6,000 depending on the quality and weight in carat of the gemstone. The color of ruby can vary from deep red to pinkish red with 'pigeon's blood red' being the most desirable one.
8 - Alexandrite
Average Price Per Carat: $2500
Alexandrite is one of the cheap alternatives to diamonds for engagement rings. It is a rare and valuable gemstone that is known for its unique color-changing properties. Its color can be lovely green in daylight and change to purplish red in incandescent light. This gemstone was discovered in Russia in the 1830s and became a favorite of the aristocracy of the country at the time. The stone has a hardness of 8.5 on the Mohs scale, making it slightly less durable than Ruby. It is essential to note that Alexandrite gemstones vary significantly in their qualities and can cost up to $70,000 per carat. However, a decent quality stone can will be available for $2,500 per carat.
7 - Emerald
Average Price Per Carat: $2000
Emerald is 7th on our list of the 10 cheap alternatives to diamonds for engagement rings. These gemstones have a unique and vibrant color that makes for an eye-catching ring. However, they have a Mohs rating of 7.5, so they need significantly more maintenance and care compared to diamonds.
