Pandora A/S (NASDAQ:PNDZF), the world’s biggest jewellery marker by volume will no longer used mined diamonds in its products.
Towards the end of announcement launching what it called a lab-created diamond collection, the company stated: “going forward, mined diamonds will no longer be used in Pandora’s products.”
Shares in the Danish company rose 7% in Copenhagen on the news.
How much of an impact the move will have on the wider diamond industry remains to be seen.
Pandora has traditionally focussed on the more affordable end of the jewellery market, and last year only put mined diamonds into about 50,000 of the 85mln items it manufactured.
Pandora argued that younger generations are more concerned about sustainability, but it’s also true that younger people are more constrained by price.
The higher-end diamond jewellery makers, like Tiffany & Co are taking a different approach.
It’s now possible to provide customers with details of newly sourced, individually registered diamonds that trace a stone’s path all the way back to the mine.
And at the mining end Lucara (TSE:LUC), the well-established Canadian mid-tier with operations in Botswana, has been trialling a similar track and trace feature for rough diamonds called Clara [https://claradiamonds.ca/].
Nevertheless, the squeeze is very definitely on the miners, given that global diamond sales fell 15% in 2020, as several years of weak demand were exacerbated by lockdowns and economic uncertainty. Production of rough diamonds fell 20% in 2020 and prices declined by 11%.
That being said, diamond sales and prices have somewhat recovered this year, with De Beers reporting strong sales, and making its own noises about ongoing demand from young people.
Pandora has also pledged to stop using newly mined gold and silver, and plans to make its entire operation carbon neutral within four years.
Currently, laboratory-grown diamonds account for roughly 5% of the market.