However, the company’s own business in precious stones has been in jeopardy following mining giant Anglo-American’s decision earlier this year to spin off the business and with the rising popularity of lab-grown diamonds among Gen Z.

De Beers tried its hand at growing a lab-grown diamond jewelry business for six years before ditching it earlier this year. But a segment of that failed attempt has flourished—and it has nothing to do with jewelry. 

The London-headquartered company’s research division, Element Six, makes synthetic stones for industrial uses. That business has taken off in recent years, making Element Six the largest Western supplier of such diamonds, the Times reported.

Its research site, based in Oxford, England, can generate the extreme heat needed to mint artificial diamonds, which are then used as cutting tools or abrasives. About 80% of mined diamonds are already used for industrial purposes, as they might lack the quality to become gemstones that can be set into jewelry.

Element Six now makes much of its money by supplying diamonds for drilling or mining purposes, where they’re used to sharpen and improve tools. 

“When it comes to lab-grown for jewelry it is very different to the price points in the industrial space because it’s a different proposition and it’s different engineering that underpins your end product,” Element Six CEO Siobhán Duffy told the Times.

While the research division has flourished in its niche, it faces some unique challenges. For one, its use is primarily in sunset industries like oil and gas as well as car manufacturing. It also has to grapple with competition from China and India, which make lab-grown diamonds in abundance. 

Amid the AI boom, Element Six has found fresh interest in its creations. Diamonds can inherently handle high levels of heat, which can help power electronics, potentially amplifying the stone’s use.

An Element Six spokesperson told Fortune that synthetic diamonds present “a significant growth opportunity for De Beers Group.”

The love for lab-grown diamonds

Anglo-American, a member of the Fortune 500 Europe, owns 85% of De Beers and is on a restructuring drive, which will include shedding the diamond business.  

The move will help the mining giant focus on its core business of copper, iron ore, and crop nutrients. It also comes at a time when the diamond business has suffered for years due to macroeconomic uncertainties following the pandemic and waning interest in the natural stone amid growing love for lab-grown diamond jewelry.

De Beers has a huge sway on diamond prices as it’s still a significant player in the market. However, it has repeatedly cut diamond prices in the hopes of attracting more buyers, painting a gloomier picture of the future.

Gen Z and millennials have been key drivers of lab-grown diamond adoption, as it’s typically cheaper and considered more sustainable than the original stone. A broader luxury slowdown and a change in the mood music around marriage among the younger generation have further driven shoppers away from splurging on diamonds.