Gem quality diamonds are rare, but among the rarest of all diamonds are pink diamonds. The principal supply of pink diamonds comes from one source, Rio Tinto’s Argyle mine in Australia. These gems are naturally desirable for some of the finest jewelry or as pure investment, and new uses for the stones unique composition – such as in Magnetic Resonance Imaging – are being discovered. Larger pink stones such as the Graff Pink or the Princie Diamond are often snapped up by private investors, prestige jewelry makers or investing consortiums and are removed quickly from the market.
Why So Rare
It is the chemical structure of the diamond lattice that makes it so rare. Diamonds are made from carbon bonded together in a crystalline lattice structure that does not absorb any light. This is one of the reasons that diamonds reflect light and appear to have an inner fire. Colored diamonds have areas where the carbon atoms in the lattice may be missing or contain a different element. When enough of these defects are present, such as boron for blue or nitrogen for yellow, the stone will take on a dominant color.
The Argyle mine is one of the world’s biggest suppliers of diamonds, producing 80 percent brown diamonds, 15 percent in yellow shades, 4 percent white, and less than 1 percent in the rarest red, pink, green, and blue colored diamonds. Diamonds are supposed to be the superlative hard substance, but due to the more complex arrangements of their atomic structures, some colored diamonds are actually harder than regular diamonds and in industrial uses are often used to cut other diamonds. Argyle diamonds have other unique properties too, including the fact that 70 percent of Argyle diamonds will fluoresce blue under ultraviolet light and bluish white under x-rays. It is because of these light-sensitive qualities that diamonds are finding their way into more scientific and industrial research.
The Argyle mine's fabulous pink diamonds will also be decidedly rarer after the mine ceases production in 2020 or 2021. Demand, however, is not slacking off. As individual investors snap up nearly all of the annual diamond tender, prices are soaring. It remains to be seen how much of the current Chinese stock market troubles will affect the fortunes of these coveted stones, though those with high net worth are putting millions of dollars into rare stones as a stable asset class.
As an alternative investment, pink diamonds are increasing in value year-over-year. The average cost per carat in 2002 was $13 thousand and just 12 years had an average of $78 thousand per carat. High demand and rarity for all colors of diamonds have pushed total appreciation up between the years 2006 to 2014 by a total of 154.7 percent. Even if you do not have a Bentley budget, small investors can still tap into the market for these beautiful stones as an alternative to traditional stocks, bonds, cash and commodities. Working with a reputable appraiser and jeweler is a vital step in diversifying your portfolio with these high demand stones.
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