Australia’s Argyle Diamond Mine, the source of 90% of the world’s pink diamonds, is scheduled to cease operations in 2020. What can this mean for the pink diamond market, the industry as a whole, and investors. Let’s find out.
East Kimberley is a remote region of Western Australia more than 2,000 kilometers from Perth, the state capitol. Open and underdeveloped, there might not seem to be much to recommend this arid region…but under the surface, East Kimberley is home to one of the rarest and most unique treasures in the world: pink diamonds.
Colored diamonds have been admired for their beauty and value for hundreds of years. Within the last few decades, many types of colored diamonds have been growing in value, but one hue of colored diamond has outpaced all others. Since 2005, pink diamond price has increased by an average of 15% per year.
As investors, you are constantly on the lookout for assets that show the greatest stability and potential for high returns. With the price of diamonds increasing exponentially in the last 2 decades, is there opportunity in investing in these colored stones? Can their prices rise even higher? And if yes, how much higher can they get?
In this article we will be looking at:
- How diamond rarity translates to value
- What we can learn about market demand and the industry by examining the Argyle Tender
- Final thoughts on the future of colored diamond prices
This article has been updated for 2019
Despite occupying such an influential position within the diamond industry and the investment market, all mines eventually “burn out”, and unfortunately the Argyle mine is no exception. Its resources are expected to be largely depleted in the very near future, an estimation that can be further supported by Rio Tinto’s 2013 announcement of ceasing operations in 2020.
October 10th marked the day all bidders had to send Argyle their bids for each of the 63 diamonds that were being offered at this year’s annual Tender. As per usual, the stones presented were of exceptional quality and grading, leaving everyone with very positive impressions.
Image credit: Rio Tinto
Perhaps the most noteworthy thing to point out however, is that for the first time in 5 years, a diamond weighing more than 3 carats was offered!