World Federation of Diamond Bourses

From the office of Ernie Blom,

President,

World Federation of Diamond Bourses

May 30, 2018

Dear President,

I am writing to you following the De Beers Group announcement on Tuesday that it will be launching a new company called Lightbox Jewelry that will begin marketing a new brand of laboratory-grown diamond jewelry under the Lightbox name in September, offering consumers high-quality, fashion jewelry designs at substantially lower prices than existing lab-grown diamond offerings.

I believe this can be seen positively. De Beers' move will further reduce the price of synthetic diamonds. It also illustrates very clearly the difference between diamonds and synthetic stones which can be made relatively cheaply.

De Beers is telling consumers that this kind of synthetic diamond jewelry will be aimed at a different market, rather than the traditional diamond jewelry buyer.

Please see the details of the De Beers announcement below:

"Lightbox lab-grown diamonds will retail from $200 for a quarter-carat stone to $800 for a one-carat stone. The line will bring something new and innovative to the jewelry sector, featuring pink, blue and white lab-grown diamonds in a selection of accessibly-priced earring and necklace designs.

Bruce Cleaver, CEO, De Beers Group, said: “Lightbox will transform the lab-grown diamond sector by offering consumers a lab-grown product they have told us they want but aren’t getting: affordable fashion jewelry that may not be forever, but is perfect for right now. Our extensive research tells us this is how consumers regard lab-grown diamonds – as a fun, pretty product that shouldn’t cost that much – so we see an opportunity here that’s been missed by lab-grown diamond producers.

"Lab-grown diamonds are a product of technology, and as we’ve seen with synthetic sapphires, rubies and emeralds, as the technology advances, products become more affordable. After decades of R&D investment, we’re able to offer consumers a better price today. While it will be a small business compared with our core diamond business, we think the Lightbox brand will resonate with consumers and provide a new, complementary commercial opportunity for De Beers Group.”

Steve Coe, General Manager, Lightbox Jewelry, commented: “Lightbox Jewelry offers consumers something new: sparkle and colors, at a very accessible price. In addition to a deep understanding of what consumers want, Lightbox brings innovation and a commitment to transparency to the lab-grown diamond sector. We’ve learned from our research that there is a lot of confusion about lab-grown diamonds – what they are, how they differ from diamonds, and how they are valued. Lightbox will be clear with consumers about what lab-grown diamonds are and will offer straightforward pricing that is consistent with the true cost of production. We will introduce more designs and colors as the range evolves, and the technological efficiency of our proprietary production process means we will always offer Lightbox at accessible prices.”

Lightbox will launch in the US and will initially be available to US-based consumers through the Lightbox e-commerce website, with retail partnerships to be announced later.

A subsidiary of De Beers Group, Lightbox will be the only jewelry brand to source lab-grown diamonds from De Beers Group’s Element Six business, a world leader in lab-grown diamond technology for more than 50 years. Any Lightbox lab-grown diamonds of 0.2 carats or above will carry a permanent Lightbox logo inside the stone. Invisible to the naked eye but easily identified under magnification, the logo will clearly identify the stone as lab-grown and also serve as a mark of quality and assurance that it was produced by Element Six.

To support Lightbox, De Beers Group is investing a total of $94 million over four years in a new Element Six production facility near Portland, Oregon, adding to Element Six’s existing UK-based facilities. Once fully operational, the plant will be capable of producing upwards of 500,000 rough carats of lab-grown diamonds a year."

In conclusion, I would like to reiterate that I believe that this is a positive development that will further create a differentiation between synthetics and diamonds, and will help set the record straight for consumers by showing them the difference between the products.

Yours sincerely,

Ernie Blom

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