Impact of Argyle closures on jewelry value!
Recently Natural Diamond Council (NDC) highlighted the subject of Argyle closures! Talk about a rock-solid investment: the value of an Argyle pink diamond has appreciated by 500 percent over the past 20 years, outperforming all major equity markets. And the stones have just become even more valuable: earlier this month, the Argyle Diamond Mine in Western Australia, the source of 90% of the world’s pink diamonds, was depleted and closed.
It’s important to note that pink diamonds aren’t just coveted just for their beauty, but also for their rareness. While it’s believed that the pink color is a result of a twist within the stones’ original atomic lattices during formation over a billion years ago, geologists still face many mysteries regarding their production phenomena. Whatever the cause, the result is a beautiful stone, soft pink to deep saturated pink and violet in color, that boasts the inherent sparkle of a diamond.
When Sotheby’s sold a 14.83 carat vivid purple pink diamond sourced by Alrosa in Geneva on November 11, 2020, it fetched a record price of $26.6 million. The largest diamond of this color to ever come to auction, an occurrence like this won’t likely happen again anytime soon.
“Pink diamonds, perhaps more than any other colored diamond, have captured the imagination of collectors for centuries,” explains Gary Schuler, Worldwide Chairman of Sotheby’s Jewelry Division. Pink diamonds, he pointed out, represented five out of the ten most valuable diamonds ever sold at auction.
“These exceptional sales, all realized in the last decade, are a testament to the growing appreciation and awareness of the great scarcity of these natural treasures around the world. And with the supply of these beautiful stones becoming ever more limited; they are likely to continue to become even more prized.”
“The Argyle mine’s closure,” Schuler explains, “will undoubtedly affect the balance of the supply and demand of colored diamonds and ultimately their market value.”
Long before the mine’s closure, Argyle’s precious pinks were hard to get a hold of-especially those gems over one carat in size. While the mine produced over 865 million carats of rough diamonds in its 37-year lifespan, only 0.13 percent of the cache were pinks of high enough quality to be offered in the annual Argyle Pink Diamond Tender; an entire year’s worth of Argyle pink diamonds over a half-carat in size could fit in the palm of your hand.
With so few precious pinks, the Argyle mine offered its annual cache of stones (usually around 60 diamonds) to an exclusive group of 100 invitation-only dealers, collectors and jewelers who were invited to place them for sealed bids. A suspenseful process, it proved the only equitable way to distribute the highly desirable stones amongst a big group of would-be buyers around the world.
One of the Argyle mine’s longtime buyers is L.J. West, a New York jeweler that began bidding on pink diamond tenders in 1990. His company purchased a rare four carat vivid pink (the largest pink offered in a tender), a few days after 9/11, when the market was uncertain, recalls Scott West, an owner of the company. Since that time, the prices have skyrocketed, and he expects that trajectory to continue.
“Because Argyle pinks are both beautiful and rich with history and significance, I think these diamonds will captivate the imaginations of collectors for generations, especially after the closing of the mine,” says West.