According to Dreamtime stories from the Traditional Owners of the land, the Gija and Mirriwung people, a great barramundi once lived near the site of the Argyle Diamond Mine in the East Kimberley region of Western Australia.
Three older women once tried to catch the fish with spinifex nets, but she leapt over them and through the gully, shedding her scales in the process.
It is these scales that are said to make up the coloured diamonds found at the one-of-a-kind mine, which operator Rio Tinto has now closed after 37 years of operation and producing more than 865 million carats of rough diamonds.
Almost the entire world’s supply of rare pink, red and violet diamonds came from Argyle, which at its peak accounted for a quarter of the worlds diamond supply.
The mine will now begin a five-year decommission period before being returned to the Traditional Owners.
The closure of the mine has raised questions about the future of the rare pink diamond market, with many expecting a boom in prices as supply bottoms out.
Pink diamonds are the rarest in the world, accounting for a tiny fraction of global production, Argyle produced 90 to 95 per cent of them, despite the fact that just 0.1 per cent of the mine’s gems were pink.
This, along with the fact that Argyle is the only location where pink diamonds have been extracted regularly, helps to explain why they are the dearest diamonds in the world, costing between 10 and 15 times as much as an identical white diamond.
The price for pink diamonds varies based on its quality and tone, with less intense pink diamonds potentially going for $10,000 while the best of the best can fetch more than $700,000 per carat.
You will be lucky to find anything over a carat, however, with 99 per cent of all pink diamonds being under 10 carats.
At the end of 2020, an extremely rare purple-pink diamond mined in Russia sold for $36 million, with the stone weighing 14.83 carats, the largest pink diamond with its colour grading to go under the hammer.
“The lucky buyer could well profit from prices soaring for pink diamonds in the coming years thanks to increased rarity,” Tobias Kormind, Managing Director of 77 Diamonds said in a statement at the time.
For now, however, Rio Tito has shut up shop, signifying and end of the era not just for the company, but for diamond mining in Australia.
“Fifty years ago there were very few people who believed there were diamonds in Australia – even fewer could have foreseen how the Argyle story would unfold,” Rio Tinto Chief Executive of Copper & Diamonds Arnaud Soirat said at the mines closure.
“Today Argyle’s influence stretches into many spheres and over many continents and I am very proud to acknowledge all those people who have contributed to the discovery and development of the mine and the production of some of the finest diamonds the world has ever seen.”
Worth the price of admission
Due to the rarity of pink diamonds, Rio Tinto conducts a secretive annual Argyle Pink Diamonds Tender, meaning the top-quality gems never reach open market.
Last year the tender broke records, with Rio Tinto reporting double digit price growth, also claiming the value of Argyle pink diamonds sold at the tender has appreciated over 500 per cent over the past two decades.
The tender usually features around 50-60 stones a year, about one per cent of the mine’s annual pink diamond production, with about 100 jewellers and collectors invited to view the gems while on their global tour
This year’s is set to be the last, with many expecting new records to be broken as bidders try to buy something from the last Argyle tender.
It might be no surprise then that pundits are expecting prices to rise in the future.
“From the perspective of an industry, this is a dramatic event. 99.9 per cent of all the pink melee in the world is coming from one mine only,” the research team from the non-for profit organisation The Fancy Color Research Foundation (FCRF) said.
“Pink diamond melee has an important role when designing high-end jewellery and luxury watches.
“Once new goods will no longer enter the market, it will create a sudden void and it looks like the implications will be powerful.”
According to FCRF, pink diamonds are growing in value more than any other colour, with values rising 116 percent between 2010 and 2019, despite a 0.9 per cent dip between Q4 2019 and Q4 2020.
“The demand for Natural Pink diamonds remains consistent while the offering decreases year after year,” the researchers said.
“The closure of the Argyle mine affected the demand on polished Argyle goods, as they are quite different from most pink diamonds coming from the rest of the world. The vast majority of the pink Argyle diamonds unearthed are very small and fall under the category of melee goods.”
Investor interest increases
Terry Hunt is a Senior Consultant for South Perth-based Soklich & Co, specialises in diamonds like the Argyle Pinks, and he has noticed demand for pink diamonds is strong, whilst future supply is low.
“Basic common-sense suggests there is only one direction for prices to go,” he said. International finance experts all agree that Argyle Pink Diamonds represent a high-performance investment.”
While they do not predict or speculate on future price movements, the FCRF recommended examining similar well known price models of natural luxury ‘commodities’ that are not unearthed anymore, such as rubies from Burma or natural pearls.
Hunt said he has two approaches to pink diamond jewellery, one is to have bespoke, custom pieces made on commission, and a standard collection that uses smaller, more affordable, lower grade stones.
“The exclusive nature of this unique gem is extremely important to our clients,” he said.
“The background to the stones; being a natural product, ethically mined, from a project that has included the local Traditional landowners and community as partners is increasingly important.”
Hunt said they have seen a move towards investors wanting hard tangible assets.
“We are dealing with investment clients daily, both as private investors and as clients investing with Self-Managed Super Funds,” he said.
“It really is the case that you can find investment opportunities costing as little as a few thousand dollars, right up to the multi-million-dollar range.”
Where do I get my pinks from now?
Chairman of the Diamond Guild of Australia Michael Neuman told the ABC in early 2020 that there hasn’t been a new viable diamond mine discovery on the scale of Arygle for decades, and the ones currently in production will likely become economically unviable in the next 50 years.
“To my mind, that means it’s extremely unlikely that another regular source of pinks will ever be found, because the conditions required for the formation of pink diamonds in nature are so freakish,” he said.
The pink colouring is caused by a distortion in the diamond’s crystal lattice, created by intense heat and great pressure from all directions after the stone’s formation.
Alrosa, a mining company occasionally will discover a stunning pink diamond in its mines in Yakuita, in Russia’s Artic region and the Williamson diamond mine in Tanzania one produced a 54.5 carat pink diamond which was presented to then-Princess Elisabeth and Prince Phillip upon their wedding in 1947.
It is unlikely a new source of pink diamonds will be found for some time, which is where the thriving lab-grown diamond sector might come into play.
Even De Beers joined the market in 2018 with the creating of Lightbox, a fashion jewellery subsidiary.
Lab-grown diamonds are identical to mined diamonds and have increased in popularity over recent years.
Continued advances in technology have contributed to double-digit growth in production and lower retail prices for lab-grown diamonds in 2019 and 2020, according to Bain & Co’s The Global Diamond Industry 2020–21 report.
Once lab-grown shy, major jewellery retailers are now adding lab-grown diamonds to their product range, with the price differential between natural and lab-grown fancy colour diamonds being particularly striking—up to 10 times.
In 2020, Bain & Co reported that lab-grown diamond production reached six to seven million carats, with 60 per cent manufactured in China using high-pressure, high-temperature technology. Chemical vapour deposition technology is gaining share, with India and the US emerging as major production centres.
Despite growth in the sector, consumers are still not fully convinced.
Bain & Co reported lab-grown diamonds still evoke mixed associations, with most consumers deeming them artificial and affordable.
De Beers found similar responses in their bi-annual lab-grown diamond tracker.
The research showed that consumers differentiate natural diamonds from lab grown diamonds by attributing to them the key category territories of “authentic” (60 per cent vs. 6 per cent); “romantic” (41 per cent vs. 6 per cent); and “would make me feel special” (37 per cent vs. 3 per cent).
47 per cent of consumers dispute the idea that lab-grown diamonds are real, according to the survey of 5,000 Americans.
What will happen to the pink diamond market is up in the air, but one thing is for certain, we will likely never see a mine like Argyle in our lifetime.