The closure of Rio Tinto’s Argyle mine in Western Australia has been touted for many years but by the end of 2020, after almost 4 decades of production, it will finally come to pass. This will of course have a profound effect on the coloured diamond market, which comprises just 0.01% of the overall diamond market by volume but almost 10% of it by value. Throughout its lifespan the mine has produced more than 90% of the global supply of pink diamonds. Earlier this month the largest ever vivid purple-pink diamond, the 14.83 carat ‘Spirit of the Rose’ went under the hammer at Sotheby’s Geneva, fetching an eye watering $20 million. Pink diamonds were first discovered in India in the 1600s, but that supply has long since been exhausted. With the closure of the Argyle mine, production is now limited to two of Alrosa’s mines in Russia, including Yakutia – the mine of origin for the 27.85 carat rough that went on to become the Spirit of the Rose after being delicately cut and polished. So rare are pink diamonds that they only form 0.001% of Alrosa’s annual output by volume. Although Argyle pinks are usually quite small, it is their fantastic depth and tone of colour that makes them so special. Throughout the life of the Argyle mine, pink diamonds have only comprised a mere 0.13% of its rough diamond output and a whole year’s output of cut and polished pink stones over 0.5 carat would fit inside a single Champagne flute!

Even obtaining pink diamonds from the Argyle mine is not a straightforward process! The most valuable stones produced by the mine are sold via sealed bids in the annual Argyle Pink Diamonds Tender. Only 100 specially invited collectors and jewellers are allowed to bid for these special pink diamonds. Those remaining stones are offered to fourteen distributors, who then supply thirty-five “select retailers” around the globe. Patrick Coppens, Rio Tinto Diamond’s General Manager of Sales and Marketing, stated that “currently there are no other consistent sources of pink diamonds and even if another deposit of pink diamond bearing ore is discovered it would take on average 10 years for a mine to proceed from discovery to production.” Boodles are one of the Argyle’s ateliers in London and they have recently purchased the highest valued pink diamond in the company’s long history, a pear cut, 10 carat stone produced by the Williamson mine in Tanzania. They are mounting the stone into a ring they intend to sell for £3.5 million, capitalising on the increased demand for pink diamond jewellery across the board. Boodles have seen a three-fold increase in pink diamond jewellery sales in 2020 versus 2019, a figure made all the more extraordinary by the fact they are currently operating in the teeth of a global pandemic!

According to Rio Tinto, the price of the Argyle Pink Diamonds Tender has risen five-fold since 2000. Most industry commentators agree that there is a premium attached to stones of Argyle provenance. Five of the ten most expensive diamonds ever sold at auction were pink diamonds and indeed the highest price ever attained by a diamond at auction was the 59.60 carat “Pink Star,” which fetched $71.2 million at Sotheby’s Hong Kong in 2017. The market had long expected the closure of the Argyle mine but most people thought this would not be at least until the end of 2020, if not beyond. It seems that the 2018 announcement by Rio Tinto that the mine was to close within two years prompted a flood of demand that in fact hastened the end of production.  In the words of a Rio Tinto press release it placed pink Argyle diamonds “front and centre of coloured diamond collectors’ minds”. Although demand for pink diamonds is truly global, the Asian market is by far the largest single driver. It is clear that fund managers and investors have seen pink diamonds as ‘treasure assets’ that must and almost certainly will continue to rise in value as more than 90% of their production has now ceased.

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