Why Savvy Investors Include Argyle Pink Diamonds
First no one even heard of them. Then everyone did. Once their rarity became known, pink diamonds quickly became the darling of smart investors the world over. Their ravishing pastel hues and lingering mystique holds sway over the most jaded of collectors keeping them an attractive investment.
As fascinating as natural fancy pink diamonds are, their place of discovery is even more remarkable, providing insight into why investors took notice. Over 90% of the world’s supply of fancy pink and red diamonds hails from the remote barren landscape of the Kimberly region in Western Australia. Nothing was there, except the rarest diamonds in the world.
2.02ct Argyle Diamond
Argyle Mine’s Unique History
Evidence of prehistoric volcanic activity proved this vast terrain, later named Argyle Diamond Mine, was diamond rich. In its heyday of 1994, the world’s 4th largest diamond producer by volume yielded 42 million carats. To everyone’s amazement, most of the gem-quality diamonds were brown. Today we call them champagne, or chocolate, even cognac diamonds. Clever marketing turned these previously cast-asides into the must-have-diamonds of the late 1990s.
Argyle didn’t need help selling the pink, purple, red, or even blue crystals coming from this deposit. They were rivetingly gorgeous straight from the ground. Pinks in particular were so captivating that both investors and collectors became enthralled by them with a fervor that’s never waned. Yet, after nearly 40 years of robust production, the mine lies silent. Workers have gone home, and Argyle’s charmed history has morphed into a legend. November 2020 saw the last rough coming up from the mine which had thrilled collectors for decades.
Leibish Argyle Diamonds
Exclusively for the Privileged Few
Argyle held an invitation-only sale (a tender) annually for their finest pinks and reds. Very few dealers were privy to the elite offerings which operated by sealed bids. Color diamond specialist Leibish Polnaur, founder of LEIBISH, has been on Argyle tender’s exclusive short-list for years. The last 2 sales were exceptional. After 37 productive years, mining became untenable to continue, which was expected to happen. While it wasn’t a total surprise, when the end came, buyers realizing it was their last chance to grab these rare works of art, triggered a buying frenzy.
Argyle’s Swan Song
The end of an era with no other region producing pink diamonds made the last 2 sales both melancholy and highly anticipated. “We bid on all stones, since the goods will become super rare, in high demand, and expensive,” reflected LEIBISH executive Shmulik Polnauer at the time. Polnauer estimated that asking prices for 2020’s tender was 15% higher than the previous year. So, LEIBISH upped its bids “20% and more”, ensuring the company secured lots. That bold move resulted in 16 of the 62 most alluring pink and red diamonds going to LEIBISH. They acquired 50% of the 1-carat dazzlers, more than any other buyer.
LEIBISH struck with that same focus at Argyle’s final tender, acquiring more pinks and reds which allowed LEIBISH to satisfy its customer’s appetites for the scarce beauties. Sensing the time was right, LEIBISH debuted its finest red stone, the Red Dragon Diamond from the Argyle Pink Diamonds Signature Tender, 2020. The prized 1.09ct Fancy Purplish Red Radiant diamond exhibits exceptionally rare VS2 clarity. “It’s difficult and painful to reconcile with the fact that the Argyle mine, Rio Tinto, has closed forever,” said LEIBISH founder Leibish Polnaur. Given this stark reality, investors commend LEIBISH for its foresight in carefully curating the finest pink diamonds of this post-Argyle era.
1.73 carat, Fancy Intense Pink Diamond
“New Source” Proves Premature
Recently, trade journals reported a pink diamond found at Finland’s Latuoyueji Diamond Mine (Lahtojoki). It’s the first important diamond mine outside of Russia, claiming a proven reserve of 2.25 million carats (in 2017) with an estimated mining life of 9 years.
While the fanfare is exhilarating, it should be viewed with caution. “First of all,” Polnaur points out, “the images appearing in the Lahtojoki pink diamond report are actually Argyle pink diamonds from Australia. It’s entirely misleading to compare a relatively minor diamond found in Finland, to those from the mega-sized operation of Rio Tinto.” So far, it does not measure up to the illusion created around the few stones extracted from the initial sampling, Leibish points out.
Demand Drives Value
While Argyle mine was winding down, demand for fancy color diamonds was exploding. Pragmatically, color diamonds are considered valuable investments by those who can afford them. Their small size to high value ratio makes them the ultimate discreet, portable investment. And with an emerging middle class in India and China, these markets became only 2nd to the US in demand for diamonds.
Rising Prices tell the Story
The rarest sub-set of diamonds is the fancy color niche, showing a huge chasm in price variances. A VS1 1-ct clear diamond might be valued around $5,000 whereas the same size and quality yellow diamond can be $10,000. The price disparity widens even greater with rarer diamond colors. If their soaring values aren’t enough to woo investor-collectors consider this; these rarities can be worn by the owner while enjoying their portfolio’s growth.
Fancy pink diamonds remain the diamond market's darling. The upward trajectory of their prices tells the story best. With pink diamonds prices rising appreciably in the past 12 months, the average return on investment yields 30%, according to Australian Diamond Portfolio Pink Diamond Index (ADPPDI). This activity accelerated rapidly with the closing of Rio Tinto’s Argyle mine in late 2020.
Chart clearing shows the regular ascension in value year over year for decades.
Investors Remain Bullish on Argyle Diamonds
Since Argyle opened the mine in the 1980s, its diamond prices have never declined, even while hardships descended upon the global economy.
With Argyle mine now closed and no other reliable source known for rare pink diamonds, they will continue be valued for their finite supply, which is one of the reasons they are so in demand. Rarity has a direct relationship to the price of any fancy color diamond. And with pinks, its rarity remains guaranteed, thus establishing them as a sound investment. Over the past 11 years or so, the market has witnessed many pink diamond prices increasing by as much as 367%, making them an intelligent investment, and one that clearly points to continued growth. ▼
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